- Margin is the selling price minus everything the car cost you, not the gap between the screen price and what you paid the seller.
- Fees, transport, prep and days in stock are part of the cost. Leave them out and the deal looks better than it was.
- On a typical £8,000 auction buy, the published fee and a regional delivery already add about £1,056 before any work.
What counts as the margin?
The margin is what is left after the car has gone. Start from the price you sold it for. Take off the price you paid, the auction fee if there was one, VAT on that fee if you bore it, transport, prep, and the warranty or advert costs you always add.
The gap between the trade price and the screen price is not the margin. It is the gap before the work.
Write this down per car. A month of "it felt all right" hides the one car that paid for three quiet weeks.
What does an auction car cost before prep?
Take a common case. The hammer is £8,000. On the published standard rate card the buyer's fee for that band is £806 once it is rounded to the pound, and a typical regional delivery is £250. Together that is about £1,056 before anyone lifts the bonnet.
If you are not VAT registered, the VAT on the fee is a real extra cost. If you are, you can usually reclaim it, and the £806 is the figure that matters. The fee guide has the bands. The calculator lets you change the price, the fee and the delivery and see a year of cars. The figures are an illustration, not a quote for your next purchase.
What eats the margin after you own the car?
Prep is the obvious one. Advisories, tyres and a service are costs even when you do the work yourself, because that time is not free.
Time is the quieter one. A car that sits gets a price drop, a second valet, and another month of money tied up. Price it so it can go, not so the first advert looks ambitious.
Over-allowing on a part exchange moves the loss into a different column. The part-exchange guide is the check against that.
How do you protect the next one?
Before you bid or agree a private price, write the retail price you believe, the prep you can see, and the costs you cannot avoid. If the money left is not worth the car, do not buy it to keep the stock list full.
Buying some cars direct from local sellers removes the fee and the hall delivery. It does not remove prep, and it does not remove the need to track what you actually kept.
Common questions
What should I include in the cost of a car?
The price you paid, the buyer's fee and VAT if you cannot reclaim it, transport, prep, and any warranty or advertising you always add. Then compare that with the price you actually sell at.
Is there a normal margin for an independent dealer?
No single figure fits every car. A retail-ready local purchase and an auction car with advisories are different businesses. Track your own cars, and price the next one from those numbers.
Where does the margin usually disappear?
In costs that were never written down: a fee, a delivery, a second set of tyres, or a car that sat until you dropped the price.
See what the fees come to on the auction cost calculator, or try the live demo.
