How do second hand car dealers make money?

What margin do second hand car dealers look to make in the UK?

• Answer:

  I don't know about the UK, but I think it's not very different from the US. If you look at a Carmax report, you will see a 15% gross margin on a used car that is sold through retail. It's twice smaller for cars sold through their auction. They also earn some money on issuing loans and offering extended warranty. However, after all expenses are taken out, they are left with only 4% of their revenue as net profit. And still, they are twice more profitable compared the leading new car dealership groups like Autonation and Penske.