Answers

• mr_shiftright 03/02/09 2:45 pm PST

  Edit Answer (for another -8 minute) Are you comparing cars with the exact same options on them? To be really accurate with the Edmunds pricing, you have to research the Used Cars using the "customized appraisal" feature, and the New Cars using the "Price with Options" feature. Also, you may be pricing certain new cars that have considerable rebates and incentives, giving them a somewhat temporary and artificial lower value vis a vis the more constant pricing for used cars. (1)(0) Report It

• morin2 03/02/09 4:19 pm PST

  Edit Answer (for another -34 minute) You have just found the difference between cost and value. Due to demand for these used cars, their used car values are artifically high. Is an Accord or Civic a great car? Yes. Is it a good value to buy used? No! There is far greater risk associated with buying used - and therefore, the price should reflect that increased risk. But it doesn't because prices are set by supply and demand - and the demand may be totally irrational. Accords, Civics, Camries, Corollas - are a better value when bought New - especially when there are incentives. In addition, the state sales & excise tax deduction for 2009 applies only to new cars - so you may net a new Accord for less than the asking price of a used 1 year old car. In addition, the profit on that used car is far greater to the dealer than the new car because he also is taking a bigger risk that it will come back with problems. You really have to know how to negotiate to buy a used car. I'd buy used only when depreciation is high and the first owner has absorbed it. (0)(1) Report It

• steve_ 03/02/09 7:57 pm PST

  Edit Answer (for another 4 minutes) I think part of it may be that your are looking at True Market Value prices on the new cars, and that represents what people in your zip code are paying for a new car. Then when you search actual used cars to buy using the used car search engine, you are leaving the Edmunds site and finding cars being sold by dealers (and individuals). So you are looking at asking prices, not actual sales prices. To find out what the used car should be selling for, go back to the Used Car tab at Edmunds, drill down to the make/model, and appraise it. That will give you a better idea of what the used car on the dealer lot is really worth. But as the other experts have pointed out, there does seem to be a disconnect in a 2008 used car price vs a brand new one. The disconnect is even more obvious when you price out a new demo with only a few thousand miles on it. Dealers often ask crazy money for those cars (perhaps because the demo isn't costing the dealer lots of money every day in financing charges?). It's a funny business. Source:  (1)(0) Report It

• thefordguru 03/02/09 8:19 pm PST

  Edit Answer (for another -35 minute) morin2, Wouldn't there be very little risk for a dealer/customer to sell/buy a low mileage 2008 considering it would still be under the b2b warranty? I hear you on the cost and value thing for sure though. Ken88, I'm not sure you're gathering the right data. They shouldn't be only a few hundred dollars apart. Even if it's certified you should see a bigger difference. Have you tried looking online for vehicles for sale? It will help you get a better idea of what should be selling for what. If you look at a large nuber of dealers you should be able to take the mean of what they're asking and find out where you would realistically be if you were to purchase used one. Also, the tax benefit as said above, is for new vehicles. Steve, Buying a demo car anywhere, not saying you did, is a bad idea. In most cases there is no real benefit. It's not actually costing a dealer any less because it's a demo. In most cases, demos aren't registered so there isn't a tax benefit to write off the depreciation. Same rebates, mark-up, etc. etc. ps. there was no spell check button so there may be some gramatical errors. (0)(1) Report It

• morin2 03/02/09 9:14 pm PST

  Edit Answer (for another -39 minute) Probably the best tool to find out what others are paying for a late used car, especially a common model, is to look for comparables on ebay. Look for the same year, adjust it yourself for mileage, condition, options, and you have a far better tool than any book value or dealer asking prices. As you've seen, the asking prices on late model used cars are silly. Perhaps they are priced for that one in a thousand customer who doesn't know better and only cares about his monthly payment. (0)(1) Report It

• morin2 03/02/09 9:37 pm PST

  Edit Answer (for another -16 minute) forgot to answer your question about the dealer risk with the used car. Yes, you are right, its much less when under manufacturer's warranty. However, I'm not convinced the dealer always recoups 100% of his cost for performing all repairs under warranty. The biggest difficulty with negotiating for that used car is that you, as a buyer, have no idea what the dealer has "in" the car or is the minimum he is willing to take - in contrast to the new car, which is easy to buy. So you have to be that 1 in a thousand negotiator or be willing to walk if the numbers don't work. (0)(0) Report It

• steve_ 03/02/09 10:28 pm PST

  Edit Answer (for another -26 minute) This has turned out to be a fun thread. @Thefordguru, I've never bought a demo, but I would if the price were right. But it never is! Morin2 makes a good point that dealers make more money on used cars than on new ones. Willingness to walk is just about your best negotiating tool, especially these days when there's a veritable flood of new and used cars on the market. (ps, I work here so I get to fix my own typos :-). And check out IE7Pro if you use Internet Explorer - it has a built in spell checker that works on most web sites). (0)(0) Report It