How do you calculate the margin on a used car?
The real margin on a used car is not the difference between the buying and selling price. Between them sit transport, repairs, parts, cleaning and fees.
Short answer
- Start from the purchase price of the car.
- Add every expense linked to it: transport, repairs, parts, detailing, fees.
- The total cost is the sum of the purchase and the expenses.
- The margin is the list (or selling) price minus the total cost.
A simple example
Example with round amounts, for illustration only
| Item | Amount (euro) |
|---|---|
| Purchase | 9,000 |
| Transport | 300 |
| Repairs and parts | 700 |
| Detailing | 150 |
| Total cost | 10,150 |
| List price | 11,500 |
| Margin | 1,350 |
What does not belong in the calculation without an accountant
The VAT regime and other taxes depend on the situation of the company and the car. The calculation above is a management one, not a tax one; discuss the tax treatment with your accountant.
How SoftAuto helps
- You add the purchase and each expense directly on the car record.
- The total cost and the margin at the list price update themselves.
- SoftAuto does no tax calculation; it works with the amounts you enter.