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      11-01-2011, 12:32 PM   #1
Private First Class

Drives: E90 M3
Join Date: Dec 2010
Location: LA

iTrader: (0)

Dealer Profit on ex-Lease Used Cars?

Hi all,

I am trying to understand how a returned leased car's residual value (as stated in the terms of the lease) relates to the dealer's profit when he sells that car to the second owner. Is the residual value the dealer's cost for the car or is the dealer's cost determined in some other way?

For example, imagine an e90 M3 with a $37k end-of-lease residual value is returned to a dealer. If that dealer then sells the car for $40k, would the dealer's profit be $3k? (Or is the residual value unrelated to the dealer's profit margin?)

Thank you!