LOW PROFITS ON NEW CARS
SOURCECar dealers are complaining their profit margins on new vehicles are far too low. That’s according to Earl Hesterberg, CEO of Group 1 Automotive, the giant dealership group, who says new car sales only account for 20 to 25 percent of a dealer’s profits. Putting a dollar-figure on those percents is eye opening. A Honda Fit brings in about $414, a Ford Fiesta, just $255. Service, used-car sales and financing are where dealers make most of their money. It ain’t because they sell new cars.