Industry numbers from dealer benchmark reports, with sources. Last checked 2026-10-23.
Short answer: on the car itself, about $1,400 to $1,650 in gross profit, roughly 5% of the selling price. The average franchised dealer made $1,409 per used car retailed in the second quarter of 2026; the big public dealer groups made $1,634, or 5.4% of the price. Dealers also earn on financing and add-on products: $1,769 per retail sale on average, separate from the car.
| What | Amount | Who measured it |
|---|---|---|
| Gross profit per used car retailed, average franchised dealer, Q2 2026 | $1,409 (down 10% from $1,567 a year earlier) | Presidio-NCM dealership benchmark, Q2 2026, more than 4,000 franchised dealers |
| Same, full year 2024 | $1,399 | Presidio-NCM, via Digital Dealer (Feb 2025) |
| Gross profit per used car retailed, public dealer groups, Q2 2026 | $1,634, a 5.4% margin | Haig Report, Q2 2026 |
| Same, full year 2025 / 2019 | $1,583 at 5.4% / 6.5% margin in 2019 | Haig Report, Q2 2026 |
| Financing and add-on income (F&I) per retail sale, Q2 2026 | $1,769, a record for that benchmark | Presidio-NCM, Q2 2026 |
| Average used-car selling price at new-car dealers, first half of 2026 | $29,281 | NADA Data 2026 midyear report |
| Average used-car retail price, all dealers, September 2025 | $30,016 | J.D. Power, via Auto Remarketing |
Gross profit is the selling price minus what the car cost the dealer, including what it spent fixing it up. It is not take-home profit: salaries, rent and advertising come out of it. These are averages across all used cars; a dealer makes more on some and loses money on others.
The financing and add-on number (finance, service contracts, gap coverage and similar products) is averaged across all retail sales, new and used. It is earned on the purchase, not on the car's price.
A dealer that takes your car in trade has to clean and fix it, then sell it for more than it paid you. So a trade-in offer is roughly:
the price the car will sell for − the dealer's gross profit − reconditioning
On an average $29,281 used car, a 5% margin is about $1,500. Reconditioning depends on the car: a clean late-model car needs little, a rough one can need thousands.
Two things follow from this:
Our trade-in value starts from what dealers near you list cars like yours for, then subtracts a dealer margin of 7.8% of that list price and a reconditioning amount for the condition you pick.
7.8% is more than the ~5% margins above, on purpose. Those margins are measured on the price a car sold for; listings show the asking price, and buyers often negotiate below it. Nobody publishes how big that discount is, so the extra ~2.4 points is our estimate, and it errs toward a lower number rather than promising you an offer you won't get. On a $30,016 listing, 7.8% is about $2,340: about $1,600 of measured dealer gross plus about $700 for the discount off asking. The reconditioning amounts are also our estimate. See every step.
How much profit does a dealer make on a used car? About $1,400 to $1,650 in gross profit per car on average, roughly 5% of the selling price. The average franchised dealer made $1,409 per used car retailed in Q2 2026 (Presidio-NCM, 4,000+ dealers), and public dealer groups made $1,634, a 5.4% margin (Haig Report). That is before salaries, rent and advertising.
Are dealer margins on used cars going up or down? Down. The public dealer groups' used-car margin was 5.4% in 2025 and Q2 2026, against 6.5% in 2019 (Haig Report), and the average franchised dealer's gross per used car fell 10% year over year in Q2 2026 (Presidio-NCM). Income from financing and add-on products is at a record, $1,769 per retail sale.
Why is my trade-in offer so much lower than the dealer's price for the same car? The dealer has to recondition the car and resell it at a profit of a few percent. On a $29,000 car that profit is about $1,500 on average; reconditioning can add hundreds to thousands more. A gap much bigger than those two on a clean car is worth asking about.
Is the dealer's profit the same as the markup on the sticker? No. The sticker is an asking price, and many buyers pay less. Gross profit is measured on the price the car actually sold for, after any discount.
How does Tradein account for dealer profit? We subtract 7.8% of the local dealer list price: about 5% of measured dealer gross, plus our estimate of the discount buyers get off asking prices. We label that part as our estimate.
These are industry averages from dealer benchmark reports, not any one dealer's books. We update this page when new quarterly reports come out. How we estimate your trade-in value.
How we calculate it · Trade-in tax by state · What dealers make · Trade in or sell? · What dealers check · Owe more than it's worth? · When to sell · Selling a car by state · Stop calls & texts