How much are dealers marking these things up?

Yes. I have no idea what the range is out there (would be nice if a few dealers/former dealers chimed in), but I've seen my trade-in valued at around 80% of what they turn around and ask for it (so 20% *mark-up* from wholesale, but that would be more like 17% below asking price if you do the math from the retail value "down" to the wholesale value.

Of course, dealers also play games. Sometimes you hear guys say "I got a huge value for my trade-in". I usually read that as "yes, I'm sure you did" AND "therefore you paid more than needed on the new car". (thus the net math being about right).

I'd bet dollars to doughnuts that the typical dealer mark-up on used exotics is somewhere in the 15-20% range (with exceptions of course). I'm told that new Ferrari dealer margins can be much larger than that (assuming sale at sticker).

 

I would guess dealer markup on Fcars is $15,000-$20,000 from what they buy a car for/trade in. All depends, some dealers mark their cars up $30,000 and they just sit their....it all depends on the motivation of the seller.

You need to research whichever model Fcars you are seeking and investigate the asking prices.

Best way to help you get a great deal is to post a link on this forum to all of us with a listing you like and we will be glad to chime in about a fair value.

i don't think you will be paying a salesmans mortgage down payment

 

Some cars are consignment cars and the price is set by the owner/seller, not the dealer. However, the dealer is probably making 10-15% on these deals as well.

 

+1. Not every car on the floor has a bank loan attached to it. I would go with 10-20% depending on how long the car has been sitting. Of course there is always the chance that the buyer got raped on the trade in and the car has a 30% markup.

 

I'm aware of some consignment deals where the percentage was more in the 6-8% range. The problem is you don't know when it's 6% and when it's 15%. Also remember that in a consignment deal, the issue isn't the dealer's margin, the issue is getting the owner's agreement to the offer price; the margin or markup is baked into the deal already.

I think the OP's premise "I don't mind a sales guy getting his commission, but I don't want to give him his next house down payment either" has a problem. That's mass production car mentality, when there's a plentiful supply of the same or similar car. In the exotic car market, there are many fewer examples and the histories can be unique. In that case, it's really the seller's problem what the cosignment % or trade-in value is. The buyer's problem is figuring out the lowest price for which that car can be purchased. Whatever price the dealer bought it for or had it consigned to him for is irrelevant as whoever is authorized to approve the deal, will want close to what they think is market value for that car.

 

I looked at trading in my F430 6 months after I bought it. The dealer offered 90% of what I paid, which was very reasonable. I ended up keeping mine. Here is one thing to keep in mind. A dealer has to make his overhead, taxes, rent, insurance, salaries, did I say taxes, etc. The more vehicles they sell the lower the margin can be. However with exotic cars there isn't a huge market, therfore the dealer must make a higher margin per car than the Honda dealership down the street that sells 450 cars a month. Ferrari buyers tend to shop across the country, at least looking at cars and prices. The internet keeps them fairly priced. I ended up buying my car at the dealership and got what I thought was a fair price. I had internet shopped every F430 online at the time.

 

I also shopped every car at the time I was looking. My adventure took me from NJ to Cali. So most definitely cross country.

 

Honda dealership sells 450 cars a month.......where????

 

Is possible =P I know a Honda dealer in CA can do that.
for Toyota it can go by thousands.

 

Assuming their asking price is consistent with other asking prices (i.e. their ask isn't high or low already), then "yes" (at least that is what I do...but I've started at only 5-8% off IF their asking price is already lower than market asking prices...I really try to figure out what actual sale prices are - Hard to do - and then offer that amount...I'm not looking to steal a car nor pay over market...).

 

Not sure of other dealers, but of all the guys I know in the biz, the range is 5-8%.

To the OP - don't worry about markup. If they paid $100k or $140k or $170k for a $150k car, it doesn't matter. What matters is actual market value and what YOU are willing to pay for the car.

 

Thanks for posting...great to see an actual dealer's comments!

I have to ask, how come everytime I get a trade-in offer on my car they list it for ~15-20% more than I get offered? And, I've gotten trade-in/wholesale prices from a few other folks and found the same to be true...(speaking only of authorized Ferrari dealers). Are you talking "netting" 5-8%? Then I agree.

But, (I think) the OPs question is actually trying to get at what is the "mark-up" is between the typical asking price and the typical actual market value/sale price. (thus to help with where to offer below asking). Of course the dealers cost becomes irrelevant (or should anyways if they understand sunk-cost economics)...

 

The 5-8% I was referencing was consignment fees in response to the guess of 10-15%.

In regards to asking prices - it depends on the dealer's philosophy. Some shoot for the moon and take offers, others price their cars to sell. I have some cars in my inventory marked up 25%, and I will get it. I have other cars marked up 5%, and I won't get it.

 

The majority of cars that I see at dealers (Ferrari and independent) are on consignment.

 

Try offering X amount of dollars over their cost, I have done this in the past with success. If you want the security of purchasing from a dealer then there is a premium. The markup you offer should be fair and reasonable. If you made a $100K investment and sat on it for 5 months what would you expect? I think roughly 10% is reasonable. Of course they need to be upfront and open for this to work.

 

very true, better than my advice. However, I believe in being fair both ways - trading and buying. Doing it right brings people back to you.