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How Much Profit Should A Car Dealer Make?
This is a general question. Let's say just an average car.
We all know that the principle of Economics- “Supply and Demand” dictates the market, so there are exceptions.
My question is related to just an "average car".
The reason I ask this question is because I have read many post's to this discussion board, and I am amazed at the perception that people have about buying a car, and what they should pay for a car. It seems that many people lose sight of the fact that, like any business, car dealerships have operating expenses, and balance sheets that they need to “balance” to stay in business.
I have read post's that state that some people travel across country to save a small amount of money to buy a car. It does not seem logical to go through all of the trouble to save a small amount of money. Personally, I would rather buy a car in the State, County, and City that I live in, so that the sales tax dollars generated from the sale of the car stay within my community.
With all of the information that is available to a consumer today, (such as Edmunds.com, and others), there are no secrets as to what a fair price for a car should be, but in reading many of the conversations that people are having, some people seem baffled about the car buying process.
Negotiating the price of the car should be easy, and I think, in my opinion, the dealer should be allowed to make a reasonable profit. In reading many of the posts to this board, it seems that the general public perceives giving the dealer a profit as being “ripped off”.
So, what is a fair profit for a dealer to make when they sell a car?