How much profit do car dealers make on new cars in the UK?
Car dealers in the UK typically make a gross profit margin of around 5% to 7% on new cars. While consumer perception often suggests much higher margins, the reality is that high-volume models may offer less than 1% profit, with overall profitability driven by add-ons, finance, and higher margins on used vehicles.
The reality is car dealers make an average of around seven per cent on new cars. Dealer group bosses we spoke to said gross profit on new cars ranged between five and seven per cent. The used car market is a lot stronger with profit margins for dealers around 12 to 15 per cent.
How Much Profit UK Car Dealerships Make in Reality? However, the reality is completely different from what vehicle purchasers believe. The dealers only keep approximately a 7 per cent profit margin when they sell a new car. On the other hand, on used car proceeds, the dealerships hold 12 to 15 per cent profit.
As per the National Automobile Dealers Association (NADA) 2022, car dealership profits on average is $2337 for used cars, and is $1959.2 for new car dealers.
A gross profit margin of over 50% is healthy for most businesses. In some industries and business models, a gross margin of up to 90% can be achieved. Gross margins of less than 30% can be dangerous for businesses with high gross costs.
How much profit do car dealers make on a car sales?
Where do car dealers make the most money?
A: Most dealerships make the bulk of their profits from the Finance and Insurance (F&I) department and service and parts operations — not just car sales. While new car sales bring in revenue, the margins are often thin. Extended warranties, loan markups, and service contracts are where profits grow.
Profitability can vary, but automobile, FMCG, and petroleum dealerships are often considered among the most profitable and can help you build the best dealership business in India.
Ferrari and Porsche, two of the most iconic brands, achieved the highest profit margins in 2023, despite being at the bottom of the year's sales figures.
Average Audi Sales Executive yearly pay in the United Kingdom is approximately £39,903, which is 44% above the national average. Salary estimated from 52 past and present job postings on Indeed.
There is the potential to earn significantly with this job. However, it will depend on the talents of the individual making the sale. Most car dealers earn over £30,000 on average, but some can make over £50,000.
Most car salespeople earn commissions based on the number of cars they sell each month. In this role, your ability to connect with potential customers and close sales can directly impact your earning potential.
How many years should you keep a car before selling it?
So anything between 6 and 10 years may be a decent range which should give you the double benefit of a reduced price and at least a few more years of driving. The older the car, the cheaper it may be, but you'll also have the risk of it breaking down on you – which would mean no profit from selling it on.
Yes, flipping cars is legal in the UK, but it quickly becomes a regulated business activity (motor trading) if done for profit, requiring you to meet legal obligations like paying taxes (Self Assessment/Corporation Tax), getting trade insurance, registering with the DVLA as a trader, and adhering to strict consumer laws (Consumer Rights Act 2015), ensuring vehicles are safe, roadworthy, and as described.
Gross profit margin = ((Selling price − Cost price) / Selling price) × 100. Net profit margin = ((Revenue – COGS – Operating expenses – Interest – Taxes) / Revenue) x 100. If the selling price is $100 and the cost price is $25, the gross profit margin is 75%.
In regard to the sale of the car, the National Automobile Dealers Association points out that only about 30% of a dealership's revenue comes in through car sales. Over 35% of the dealership's profit then comes from finance and insurance as well as service contracts.
As of Jan 16, 2026, the average annual pay for a Lamborghini Sales in Los Angeles is $87,943 a year. Just in case you need a simple salary calculator, that works out to be approximately $42.28 an hour. This is the equivalent of $1,691/week or $7,328/month.
