A franchised dealership has a fairly simple used car pricing model. They simply choose a percentage of the estimated value of the car on the wholesale market. This wholesale market value is determined by the age of the vehicle, the make and model of the vehicle, as well as options, mileage, and the overall condition of the vehicle.
Based on these factors, the dealer determines what markup to use on the used vehicle. The first thing they take into account is the price they paid for the car. They may have perceived the car as a trade-in rather than buying a new car, meaning they didn’t pay for it in cash, or they bought it from a private seller, auction house, or wholesaler. The second thing they need to consider is the cost they paid to repair and restore the required vehicle. Then they finally have to raise the price to make money. After all, this is the business they do.
All of these factors will affect the dealer’s margin. As you can see, there is more than one thing that affects how much people have to pay for a used car. If you want to be an educated used car buyer, your goal is to find out the wholesale price of the cars and then find out how much the dealer has invested in the car to prepare it. This will tell you how to plan your negotiation, as the dealer will hardly ever fall below these two numbers.
Buying a new car from dealerships is likely the most expensive way to get a used car. This is because new car dealers only sell the best car care products. If they get a high-mileage car, a damaged body, or a car that needs repair, they simply sell it at a used car auction. Additionally, a new car dealership can offer a better vehicle warranty and also aims to build a strong customer base. If you buy a used car that works great, you will most likely go back to the same dealership to buy another. They also know that you may one day be in the market for a new car, so it is worth your time and money to provide only a vehicle of the highest quality.
When buying used cars in san diego, everyone knows how to haggle. It is for this reason that most dealerships include a “trading platform” in what they use as profit margins. Many people who come to used parking lots will not buy a car unless they feel like they are making a deal. If the dealerships were labeling the cars at the prices they really wanted to sell them for, then people would come and try to negotiate below that level. If they put in, say, 1,000 more, they can easily allow people to trade up to 1,000 with them and still get the price they think is fair. If people don’t bother to trade with them, then they will earn an additional 1,000. That is why it is important to know how much the dealer has invested in the car. Once you know this, you will know how much you can try to trade and what is the absolute minimum that you are going to achieve.
