BMW AUC margins on a 7 series?
Discussion
I’m looking to get into a 2-3 year old 7 series probably a 745e.
Anybody care to give an informed option on the kind of margin a main dealer might have in a typical used 3 year old 7 series?
Using the usual online valuation tools for “trade valuations” seems to show at least a £6-£7k margin for the cars I’ve been looking at assuming they’re paying similar prices for stock.
Anybody care to give an informed option on the kind of margin a main dealer might have in a typical used 3 year old 7 series?
Using the usual online valuation tools for “trade valuations” seems to show at least a £6-£7k margin for the cars I’ve been looking at assuming they’re paying similar prices for stock.
I've bought and sold 2 used 7's from main dealers both having been about 2 years old at purchase and about 4 at sale.
Having checked them after disposal on the dealer websites after they bought them off me they were typically about £2500 to £3000 above what they paid me.
So if we say £3k and they prep the car for sale and stick a warranty on it, which might cost them £500 to £1000 (?) I think they're only clearing about £2k on the cars plus any finance kick back and add on sales.
Just my experience and this was with BMW dealerships.
Both my cars would have required almost nil prep work with immaculate body work etc if that makes a difference.
Having checked them after disposal on the dealer websites after they bought them off me they were typically about £2500 to £3000 above what they paid me.
So if we say £3k and they prep the car for sale and stick a warranty on it, which might cost them £500 to £1000 (?) I think they're only clearing about £2k on the cars plus any finance kick back and add on sales.
Just my experience and this was with BMW dealerships.
Both my cars would have required almost nil prep work with immaculate body work etc if that makes a difference.
Touring442 said:
From my time at BMW the margins on used cars are around £2000, more if they are bought 'right'.
That was 12 years ago however - I doubt it's improved!
Thanks, I’m looking at a 2019 7 series priced at a shade under £43k, a quick trot round the usual online buyers shows a value of £34k for the same car. BMW have offered me bang on we buy any car money for my p/ex … either their buyer has had a very bad week when acquiring their car or they have a very healthy margin in it hence my question.That was 12 years ago however - I doubt it's improved!
Online valuations can prove misleading if the car is a non standard type of car or there just aren't too many of that model for sale for their algorithms to offer a sensible number.
When I bought my Aston the same online valuers were showing its value as almost £40k less than I was paying for it which spooked me initially.
I could only find about 20 cars of my model for sale in the UK and only 3 in the main dealer network at that time. Every single one of them was at or higher than I was paying so I just accepted that the online tools have their limitations.
Many months later WBAC, Arnold clark etc are still saying its worth £40k less than the ones currently for sale yet my dealer has offered to buy mine for about £30k more than WBAC.
Long winded but if its priced right compared to other similar models similar spec I wouldn't worry too much.
If its a deal breaker ask the dealer to show you what they bought the car in for, some are happy to oblige to demonstrate what they paid and also what they've spent on prep (new tyres, wheel refurbishment etc) and personally I don't think a £3k mark up is unreasonable on that sort of car.
Most high end dealers Aston, Ferrari etc usually look for £10k to £15k as a comfortable margin but may initially chance their arm with higher margin to see if any takers before dropping it down again.
When I bought my Aston the same online valuers were showing its value as almost £40k less than I was paying for it which spooked me initially.
I could only find about 20 cars of my model for sale in the UK and only 3 in the main dealer network at that time. Every single one of them was at or higher than I was paying so I just accepted that the online tools have their limitations.
Many months later WBAC, Arnold clark etc are still saying its worth £40k less than the ones currently for sale yet my dealer has offered to buy mine for about £30k more than WBAC.
Long winded but if its priced right compared to other similar models similar spec I wouldn't worry too much.
If its a deal breaker ask the dealer to show you what they bought the car in for, some are happy to oblige to demonstrate what they paid and also what they've spent on prep (new tyres, wheel refurbishment etc) and personally I don't think a £3k mark up is unreasonable on that sort of car.
Most high end dealers Aston, Ferrari etc usually look for £10k to £15k as a comfortable margin but may initially chance their arm with higher margin to see if any takers before dropping it down again.
Touring442 said:
From my time at BMW the margins on used cars are around £2000, more if they are bought 'right'.
That was 12 years ago however - I doubt it's improved!
Thanks, I’m looking at a 2019 7 series priced at a shade under £43k, a quick trot round the usual online buyers shows a value of £34k for the same car. BMW have offered me bang on we buy any car money for my p/ex … either their buyer has had a very bad week when acquiring their car or they have a very healthy margin in it hence my question.That was 12 years ago however - I doubt it's improved!
Thanks, I appreciate that it’s hard to accurately value unusual or nonstandard cars but the car in question is very much mainstream.
Like you I’ve owned and sold a couple of 7 series via BMW main dealers, one must have been traded on but the other was up for £6k more then the p/ex price.
I’m not on here to criticize dealers making a profit, far from it! It’s more about it being near the end of the month, close to Xmas and wanting to make a few cheeky offers on cars that perhaps have a decent margin in them I order to get a better deal.
Edited by T5GRF on Wednesday 30th November 16:32
Remember, there is also VAT on the margin also included in the sales price. If there was £6k between Trade and Retail, you could easily see £2k for refurb costs and warranty, say £1k in negotiation leaving a £3k margin. £600 of that would be VAT leaving £2.4k as profit.
You can see how it's a tricky game trading prestige cars in a falling market!
You can see how it's a tricky game trading prestige cars in a falling market!
Maxus said:
Remember, there is also VAT on the margin also included in the sales price. If there was £6k between Trade and Retail, you could easily see £2k for refurb costs and warranty, say £1k in negotiation leaving a £3k margin. £600 of that would be VAT leaving £2.4k as profit.
You can see how it's a tricky game trading prestige cars in a falling market!
Yes I understand there is VAT on the margin and refurb costs.You can see how it's a tricky game trading prestige cars in a falling market!
As I said I’ve got no issue with a dealer making a living.
Most BMW dealers will tell you that their margins are tiny, however as I indicated earlier p/ex offers often tend to be closely pegged to the usual online car buyers, if this is the approach used to buying in used stock then for the car I’m looking at they potentially have an £8k margin before VAT etc.
All the large publically traded dealer groups, show the average margin (for new and used cars) in their annual reports, having worked for one these groups in the past, I can support the numbers published are largely correct.
After all prep costs, transport, VAT etc the target margin on used cars is somewhere between 8% and 10% (of the selling price).
Sell for £44k, margin after VAT (£4k), Vat on margin £800, prep cost +/- £700.....so buy price circa £38,500
Spread would therefore be £5,500 +/- on a £38,500 (buy price)
My friend bought a BMW for just over £44k (from a dealer) a few months ago, still multiple years of factory warranty left, perfect condition, went to sell it back last week (same condition, a couple of thousands miles added) and was offered £39k (zero prep required by the dealer).
After all prep costs, transport, VAT etc the target margin on used cars is somewhere between 8% and 10% (of the selling price).
Sell for £44k, margin after VAT (£4k), Vat on margin £800, prep cost +/- £700.....so buy price circa £38,500
Spread would therefore be £5,500 +/- on a £38,500 (buy price)
My friend bought a BMW for just over £44k (from a dealer) a few months ago, still multiple years of factory warranty left, perfect condition, went to sell it back last week (same condition, a couple of thousands miles added) and was offered £39k (zero prep required by the dealer).
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