Used cars are much bigger thing in the midwest vs major metropolitan areas.
We still make money, just not nearly as much.
The real profit from used cars is from service charging sales full retail for reconditioning.
And the factory doesn’t shove cars down our throat, even pre-pandemic we had to beg for allocation.
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This is the game of the dealer sucking the profit out before it hits the lot, giant packs and overcharging for recon, less gross to pay out commissions on. Now this thread is sounding like /askcarsales…lol
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Here’s a breakdown of how much an unnamed store I’ve worked for in the past would profit (before expenses)
New Car Sales
$1.1M - $1.3M / month
Used Car Sales
$200k - $400k / Month
Service
$3.0M - $3.5M / Month
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So this is why my local GMC dealer is hiring a new service advisor promising “up to” 120k yearly…
Service Advisors make bank. There were some master techs at my store making ~350k annually.
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Someone explain what that is after SoCal adjustment please!
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Service writers have guaranteed income. All the smart people that bought instead of leasing get crushed once that sled runs out of warranty and have to get their ride fixed. At some point techs body’s are so broken they can’t do the work anymore, so get the money while you can.
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I don’t doubt it
As much as I like to see that in writing, the reality is:
- Not every brand has expensive trucks, C8s, Hellcats, or other high-margin rides that people will make out with the bump sticker while you write it up (not specifically disagreeing with @ethanrs, in general)
- In many dealerships, Used cars is a junk yard used to make new car deals
- Even putting aside COVID inflation, if you own your used car inventory for the right money (which is not the same brain science as being the inventory/allocations person for new cars), then your front-end margins will usually be higher than your new car (in brands like VW and Hyundai where the average FE gross is under $1,000, used can easily have 2-4k on the FE and more on the back)
- More Used car customers than new car customers are an opportunity for making back-end gross. That’s not say they’re all “Get me dones”, but your new car customers are often fishing for the special financing or buy-rate leasing. With used, the rates start a bit higher, and smart F&I departments with multiple banking relationships can usually beat anything but a Navy Federal check, and can make a couple points on every deal.
- Of course, CPO is well worth the cost of the dealer to run it through and get it certified
I had a good friend who was a new car GSM (at a metro-area dealer) spend a year over in Used, it took 3 months of blood-letting to clean up the inventory, and then he crushed the new cars department for the next 9 months, front-and-back.
Like all things, YMMV, but I’m generalizing from what I’ve seen myself, and from the sources who publish their numbers.
Exactly. If you are only using the Used Car department to make New Car deals, you’re doing it wrong. But what do I know? The closest I ever got to NADA school was drinking at the McCormick and Schmick’s next door.
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It’s my personal channel I’ve had since I was a kid. There is no automotive content, it’s just the only place I could link the video without making it a GIF or removing the whirrr sound 
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Did you find that Model S to be especially ludicrous?
Is this an old video? Or do you have the Benjamin Button disease where you’re aging backwards? I thought you were 18 (famous last words)?
I am indeed a minor. That youtube channel is under my gamertag.
Most fun I’ve had, and I’ve firmly changed my views, Tesla makes an absolutely bonkers product. They just need to get their act together. I’ve had the privilege to have been driven, and drive some nice cars, the Tesla has by far been the fastest accelerating one; once I got the guts to do a full throttle mash without my phone.
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But leasing cars from ads doesn’t require understanding MF this and MF that
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