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Infiniti G37, Volvo XC60 and more

Last year was, says Dennis DesRosiers, was a “great year” for dealer profitability, yet if you dig into the estimates from DesRosiers Automotive Consultants, you’ll find that the average return on sales for a Canadian car dealer was a less-than-astonishing 2.0 per cent in 2010.

Dealer profitability was up from a return on sales of 1.75 per cent, but it’s pretty clear that to make a buck selling cars, a new car dealer needs to be pretty savvy.

DesRosiers estimates total net profits were up 21.3 across the entire new vehicle network, even with a decline in the number of dealers across Canada. Net profit per dealer came in at $449,000.

“This number surprises many when we put it on the street (most think it is low), but you have to remember that there are a lot of very small dealers in Canada,” says DesRosiers in a note to clients.

“There are about 700 dealers in Canada who sell less than 500 new and used combined units per store and obviously this biases the number down quite a bit. There are also brands as a whole that have little to no profitability at the dealer level and this biases the number down as well.”

Here at Deals of the Week we are bringing up dealer profits only to point out that buyers are facing some very smart and capable dealers out there. Thus, Canadians dealers are not giving away anything without a real negotiating battle.

Buyers need to research their purchases carefully; they are going up against dealers how coming out of the big recession have tightened up their operations. The only way for a buyer to compete is to focus on the due diligence of the deal. This will pay off in savings.

This week at Deals, we’re looking closely at some very nice discounts on 2010 models. In most cases, buyers will find limited stock on hand, but if you find something you like, you can save thousands.

As usual, Deals of the Week obtained pricing information from www.carcostcanada.com. Here’s a detailed look.

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volvo xc60