Insane dealership markups on a base model Bronco for a total of 83,000. MSRP 37,965.
What is dealer ship markup?
Car dealer markup is what dealerships add to jack up the price of a car. It’s above and beyond the factory MSRP.
A dealership makes its gross profit on a vehicle from the spread between what it must pay the factory for a car and the amount it collects from a customer at the point of sale. Once a dealership subtracts expenses, such as the salesperson’s commission and so forth, that’s their net profit on the vehicle.
There’s your wiggle room for negotiations on that new car.
When a hot car, such as the Chevy Corvette or Audi R8 goes on sale, that’s where dealers will sometimes mark up a price over and beyond the MSRP.
Car dealer markup gets clearly stated on the window sticker or Monroney label, and it’s all gravy. While a car dealership may only be making a slim profit on each car it sells, it’s probably doing just fine. Most dealership profit is generated behind the showroom and on the used car lot.
Besides having you sign all the paperwork to close your deal, the finance manager will offer to sell you extras like extended warranties, gap insurance, and upholstery protection. Be wary of such additions. Most people do not need these items anyway, including the upholstery protection.