Do car dealerships really make more money selling used cars than new ones?

Yes. New cars come straight from the factory loaded with incentives so the margins are typically small. Don't get me wrong, they make money selling new cars, that's what they're in business to do. However, there is more room for you as a car buyer to negotiate when it comes to used cars. Dealers will often buy cars from auction or get them on trade for much less than they're selling them for, invest in getting them up to par, and selling them for a healthy profit. I highly recommend doing your research and utilizing the different services available to you before buying. We'll be launching Bidzuku in the coming months and if you haven't bought by then I hope you'll consider using our free service to help you better locate the best deal. Good luck!

still not as much as they do servicing them .....so the order of making money is service > used car sales > new car sales ...atleast here in India

Car dealer prices on new cars are much more competitive because every dealer is selling the exact same product that they're getting from the exact same place. You can call 10 dealers and they'll only be able to offer you the exact same thing. Invoice prices are typically public information and there are plenty of websites telling you what typical transaction prices are for the car you want. The only thing the dealers can really compete on in this case is price. Used vehicles are much more difficult to evaluate. Every used vehicle is in a slightly different condition, different age, different mileage, and different history. If you're looking for a 3 year old Honda Civic with 35,000 miles, you're not going to find 10 cars that are exactly the same. You're going to find one with 30,000 miles, one with 40,000 miles, one that needs new tires, one with a different option package, and you have to decide what each is worth. Dealers also buy used cars at different prices and have to do different amounts of reconditioning. Sometimes they'll obtain a car off-lease and have to do nothing to it. Other times someone will be desperate to trade a car in and they may get a lower price. Sometimes they'll buy a car at auction or trade with another dealer. A used car that sits too long and becomes one year older becomes a one-year-older used car. A new car that sits too long becomes last year's model that nobody wants because it's not as new anymore. The dealer is probably doing more work to sell the used car as well. The new car is "new" and doesn't need any inspection or reconditioning. The used car may need a significant amount of work done before it's resold (cleaning, parts replaced, new tires), and there may be hidden problems that nobody finds out about until much later. Sometimes the dealer will get really lucky on a used car - sometimes they won't. Neither party really knows the "fair" price for the used car because it's based on so many quasi-unknowns and market demand (regardless of what everyone thinks about KBB). And the dealers are often much more skilled at negotiating than their customers - and on a used car they get to negotiate on the buy side as well as the sell side. Also note that you'll often be able to get better financing rates on a new car vs. a used car.

Does it really matter what the salesperson makes? Your objective is to find the absolute best value for your money. If your salesperson truly believes he is providing a service for you then go with what you feel comfortable. True sales professionals deserve to be paid ONLY after they have provided EXTRAORDINARY service to you as the customer.

One other thing to remember here is that although the dealer may be making less on a new car than on a used car, they maybe struggling to reach the quotas placed on them by the distributor, so may be more inclined to push the new sale over the used sale