Front-end gross is the selling price minus the vehicle's total cost (purchase price plus reconditioning, transport and other direct costs). Back-end gross is what you earn on financing and add-ons. Total gross is the two together. Track every cost against the car, or the number will overstate your profit.
The formulas
- Total cost = purchase price + reconditioning + transport + other direct costs.
- Front-end gross = selling price − total cost.
- Back-end gross = commissions or margin on finance, warranties and accessories sold with the car.
- Total gross = front-end + back-end.
A worked example
| Line | Amount |
|---|---|
| Bought at auction | $16,200 |
| Brakes (Main St Auto) | $480 |
| Detail and photos | $160 |
| Safety inspection | $700 |
| Total cost | $17,540 |
| Listed at | $21,900 |
| Front-end gross at list | $4,360 |
If the car sells for $21,000 instead, front-end gross is $3,460. Every costed line matters to that figure.
Common blind spots
- Auction fees, transport and storage left out of the cost.
- Reconditioning paid in cash and never written down.
- Time on the lot: financing and insurance on a car that sits for 90 days eat into gross.
Dealer Garage keeps cost lines on each vehicle and shows the gross at list; see cost tracking.
Beyond one car
Add the gross for every car sold in a month, subtract the monthly overheads (rent, wages, advertising, insurance) and you have an operating profit. Averaging gross per car over a quarter shows whether you are pricing and buying well.
Questions people ask
Is gross the same as net profit?
No. Net profit also deducts overheads such as rent, wages and advertising.
What is a good gross?
It varies by market and vehicle. Compare your own cars over time rather than chasing a single number.
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