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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (34432)	5/9/2009 6:11:19 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78730

A good deal of the car dealers profits comes from the service business, which has a 50% gross margin, next comes used car sales and finally new cars. I think the service business is destined to go downhill too with lower new car sales. Why bring your five year old car to a dealers shop when independents shops hourly rate is 30% less and service often fairer? Used car sales have an unbeatable competitor: Craigslist. Cost is zero. In fact most car dealers nowadays advertise their cars in Craigslist as well because that is where people are looking. We sold and bought my wives car at craigslist and saved about 20% from dealers prices and know the guy who drove the care before which in some cases is comforting (in other cases not).