Edmunds Answers

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  • avatar morin2 11/26/10 11:05 am PST

    This is why its so much easier to buy a new car than a used car. You simply have more information on the new car and it comes with the least risk.

    You cannot make any assumptions. Dealers get their used cars from trade-ins, direct purchase from private sellers (really no different than a trade-in) and also at auctions. If you attended an auction, you would see what vehicle x sold for - but not the dealer reconditioning expense. You could put yourself in the dealer's shoes and ask "what would I pay wholesale for such a car and still expect to sell at a profit" - but this requires more knowledge than most customers have of the used car market at any point in time and the information is a snapshot that changes quickly. What you would know 3 months ago would be obsolete by now.

    In addition, unlike new cars, every used car is different and a product of how it was driven and maintained (and repaired, in the event of accidents).

    The best thing to do is to focus less on the price and more on finding the best condition example that you can find and have a pre-purchase inspection performed by a mechanic. Try to get full maintenence records. Once the car passes those tests, negotiate for the best price you can get. "Asking" prices are just that - asking. Having bought dozens of used cars over the last 40 years for myself and my family, I have paid less than 60% of asking price on a great car 3 years old with 25K miles. But I've also paid as much as 85% once. And I've also had very reasonable offers turned down too and then bought new because it made more fiscal sense for that model. Don't begin a negotiation until you are serious, and don't be afraid to walk if the price isn't right.

Answers

  • Stever@Edmunds 11/25/10 11:33 pm PST

    There's really not much way to find out, unless you ask the dealer and they show you the bill of sale from the auction or trade-in figures.

    What you can do is appraise the car and figure out the True Market Value for your zip code.

  • 04350 11/26/10 8:10 am PST

    Assume that it's at least $ 2,500 to $ 3,000 under what they're now asking for it.
    That doesn't figure in the cost of detailing the car to clean it up/make repairs.

    I talked to a general manager about some other dealership asking $10,000 retail
    for a very high mileage but popular 2008 hybrid (over 150,000 miles on it) and this
    guy told me that if his dealership had ever bought the car at auction with those
    kind of miles they would never have bid more than $4,000 wholesale.


  • morin2 11/26/10 11:05 am PST

    This is why its so much easier to buy a new car than a used car. You simply have more information on the new car and it comes with the least risk.

    You cannot make any assumptions. Dealers get their used cars from trade-ins, direct purchase from private sellers (really no different than a trade-in) and also at auctions. If you attended an auction, you would see what vehicle x sold for - but not the dealer reconditioning expense. You could put yourself in the dealer's shoes and ask "what would I pay wholesale for such a car and still expect to sell at a profit" - but this requires more knowledge than most customers have of the used car market at any point in time and the information is a snapshot that changes quickly. What you would know 3 months ago would be obsolete by now.

    In addition, unlike new cars, every used car is different and a product of how it was driven and maintained (and repaired, in the event of accidents).

    The best thing to do is to focus less on the price and more on finding the best condition example that you can find and have a pre-purchase inspection performed by a mechanic. Try to get full maintenence records. Once the car passes those tests, negotiate for the best price you can get. "Asking" prices are just that - asking. Having bought dozens of used cars over the last 40 years for myself and my family, I have paid less than 60% of asking price on a great car 3 years old with 25K miles. But I've also paid as much as 85% once. And I've also had very reasonable offers turned down too and then bought new because it made more fiscal sense for that model. Don't begin a negotiation until you are serious, and don't be afraid to walk if the price isn't right.

  • isellhondas 11/28/10 3:38 pm PST

    You can't find out nor can you find out what the dealer had to spend on it to make it ready for sale.

    But, why should that really matter to you?

    It's either a good value or it's not.

  • MrShift@Edmunds 11/28/10 3:52 pm PST

    What the dealer paid is irrelevant. Either the car's selling price is in line with market value or its not.



  • isellhondas 11/30/10 10:46 am PST

    Exactly!

    Still, it drives some people nuts since they have no way of finding out. I guess they are scared to death the dealer might me making more than they consider to be "fair".

    I even had a few people who were rude enough to ask me what we had invested in a car.

  • morin2 11/30/10 10:59 am PST

    Yup, not only what the dealer has invested in the car - but also the warranty risk of the used car. I've never had to go back to the dealer for a used car warranty, but it must happen, and that adds to the cost basis of the dealer inventory, reducing profits.

    Whatever you do - buy a car with 5-star safety ratings. I was stopped at a red light last night in my beloved and now "late" '09 subaru outback when an Impala slammed into me at 60mph+. It says a lot about modern car design that I could open the door and get out by myself. I'm about to go to a doc. appt to check on a stiff neck and back, but the car crumpled and sacrificed itself as designed to protect me.

    Be careful out there.

  • isellhondas 11/30/10 12:13 pm PST

    Wow! 60 MPH !!

    Your soreness will probably worsen so it's a good thing you're going to a doctor.

    Sounds like your Subaru did a great job of protecting you as it was designed to.

  • jbassyouni 08/08/13 7:49 pm PST

    I use to sell cars so i have a little bit of knowledge that might help.


    The manager that looks at the car and gives you the price they are willing to pay uses the NADA pricing guide and will offer you NADA trade value normally well that is the most they will offer.

    A dealer will never EVER pay you more than trade in and to be honest you probably wont even get that.

    This is where it gets confusing because not many people actually know what they are getting for there trade or what they paid for a car but more or less they can do all kinds of things to play with the numbers like lower the price on there car and not tell you so that they can make it look on paper like your getting the 5,000 you feel you should get for your car. Really the most play is how much they can discount there used car which normally is a whole lot

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4. morin2 115
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