First, for a starting point, assume that a dealer is paying a more or less accurate wholesale/auction price. Sometimes they'll pay more, sometimes they'll pay less. But assume the middle ground--exactly what's listed.

So for the sake of arguement, let's say a 95 940 has an "average" book price (wholesale) of 6000. That might be close, maybe not. The retail might be $9500. But "Average" meaning average miles, wear, reconditioning expense, etc., includes cars that are just average. SO the dealer is really looking to get about $8000-8500 for this car.

So the dealer pays $6000 or so. With fees it's around $6300. But nobody is going to pay $9500 for an average 940 or anything for that matter. So the dealer either puts some dough into it to REALLY dress it up nicely (including redying leather and new tires, brakes, etc.) and now the dealer has $6700 into it.

He wheels and deals with someone and if he wants to move the thing quickly, he settles at $8000. That's a good deal for the buyer--they get a reconditioned (or partially so) car for a good price, and it's a marginally good deal for the dealer... but not THAT good.

When it comes to trade in prices, they're pretty close to wholesale price. Not always; usually. That enables the dealer to unload the car either at auction or to a wholesaler who is going to ship it off elsewhere.

Auction dynamics are really interesting. The one thing that will KILL any price structure, is when the piece is really an excellent one. A perfect car brings top dollar at auction. so much that it sometimes hits the lower retail figures. But of course, a perfect car doesn't spend much time on a dealer's lot either, because there is usually someone willing to spend whatever it takes to get it. Not that common, but there are a few that go through that are VERY nice.
But recognize that auction buying is tough because you can get right on the elevator. If someone REALLY wants a piece at auction, they might be willing to pay $6500-7000 for it, because they KNOW they can sell it. Therefore, it drives everyone else up, and sometimes a dealer will end up paying more for a car than they expected.

However, there are the times where the auction prices are really low, and dealers can get some great pieces at good prices. In that case, they can make a killing.

Then there are the times where the dealer LOSES money. Not that many times, but you'd be surprised at the break-even cars they can tell you about. Truthfully.
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1992 940 wagon, very low miles
as well as others.