re: #1175 Ford_Prefect

The thing I don’t understand is that with the current economy there are going to be dealers closing because they can’t make enough sales to survive. Why not just let things take their natural course? It doesn’t make sense, and it isn’t Capitalism, that is for sure.

One thing I do know about auto dealerships is that they cover the overhead for the entire operation out of the service department, or at least they used to. Whatever they make on vehicle sales is almost pure profit. The salesman are guaranteed only minimum wage - no sales, no commissions. So even if a dealership only sells 20 cars a month they’re still profitable, and they make more on the used car trade-ins than they do on new car sales. Lots of times the profit on the new car is close to zero, but they make it up, and more, when they sell the trade-in.