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Is there anything close to CarWoo for the used car market? I recently purchased a three year old car, and when researching how car dealerships work, it seems l
by ssharp 13y ago
Is there anything close to CarWoo for the used car market?
I recently purchased a three year old car, and when researching how car dealerships work, it seems like the pricing for used cars is substantially different than new cars, making used cars much harder to make sense of.
With new cars, you're dealing numbers that aren't impossible to come buy -- MSRP, dealer invoice, holdback, buyer incentives, and dealer incentives. With very few assumptions, it seems like you can figure out approximately how much money a dealer stands to make off your purchase (not including upsells or finance incentives) and you can figure out their bottom line, which improves your bargaining power.
With used cars, from what I've gathered, dealers are buying these things from off-lease auctions and then use some sort of networked system that changes used-car pricing in real-time. But the pricing is still all over the place from dealer to dealer and the amount of money paid by the dealer at auction is completely unknown.
When I negotiated my car, I did a simple search of the +/- 1 year, make and model in a 100 mile radius of real ASKING prices (not pricing guides like Edmunds or Blue Book, who, by the way, the dealer was VERY quick to start quoting because they're quoting prices in the dealer's favor). The spread was nearly $10,000 and even isolating mileage to a smaller range produced a spread of several thousand dollars.
I wanted to test out negotiating techniques when I actually went in to buy, so the first day, I negotiated through several rounds, finally landing on my bottom-line price and it was soundly rejected without the "sales manager" even bothering to meet me. During negotiations, I presented no data to back up my price, but was claiming to have done the research.
I went in the next day and I brought in actual print outs from other dealers, took a lower-end price, marked it up a bit, told them that it was a reasonable price and from my estimates they'd still be making reasonable money off of it. If that deal wasn't accepted, I had alternative dealers to work with and would also consider other brands (this tactic, I thought, was good because the brand wants to rope in younger buyers to try and turn them into lifelong customers). They accepted it without any substantial pushback and it was less than the price they had refused to accept the previous day.
- tommy_mcclung 13y agoThere isn't really.
- nitroscott 13y agohow about TrueCar? they now have a used car section - https://usedcars.truecar.com/ https://usedcars.truecar.com/
- ohazi 13y agoIt's a difficult problem to solve: http://en.wikipedia.org/wiki/The_Market_for_Lemons http://en.wikipedia.org/wiki/The_Market_for_Lemons
- ssharp 13y agoThanks for the link. I think with the substantial increased popularity of leased vehicles since the article, the idea that used cars are mostly bad cars isn't as on-point as it may have been. Most "newer" used cars, which most financial people tell you are the best deals, are cars that have come off of original leases, not vehicles that were fully purchased and traded back in. Cars are also higher quality and many dealers offer certified pre-owned warranties that would cover most issues for some time. But overall, the idea of information asymmetries in the used car market is dead on. There is some data like Black Book pricing, but since the costs are derived from auction prices, which I have to assume are done in the open, even with restricted access, I'm still surprised there isn't some better cost data published like with new cars.