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What is the average profit margin for a new car dealer, and does it vary significantly between normal and luxury cars

The average profit margin for a new car dealer is around 39%, according to data from the National Automobile Dealers Association (NADA). This means that for a $30,000 car, the dealership's gross profit would be approximately $1170. However, it's important to note that this is just the gross profit, and there are other costs associated with selling a car, such as reconditioning and cleaning up a used vehicle, which can range from $700 to $1000.

As for luxury cars, the profit margin can vary significantly. According to a survey, the average fixed dealer margin on ex-showroom prices for major American automakers is less than 5%, ranging from 2.9% to 7.49% across all categories. Cadillac and Chevrolet offer the best average dealer margins in the USA at 52.2% and 50.7%, respectively. However, these numbers still fall short of international norms.

It's worth noting that the profit margin for new cars is not the only way for dealerships to make money. They can also make money from used car sales, service and parts, and finance and insurance products. Additionally, some dealerships may make more money from selling certain models of cars, such as luxury cars, which can have higher profit margins than other models.

In summary, the average profit margin for a new car dealer is around 39%, but this can vary significantly for luxury cars, with some brands offering higher profit margins than others. However, it's important to note that profit margins are not the only way for dealerships to make money, and they can also generate revenue from other sources such as used car sales, service and parts, and finance and insurance products.

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