Comments on: The Truth About Used Car Prices http://www.youngmoney.com/wheels/auto_shopping/040110_01/ Money: Earn it, Invest it, Spend it Sun, 05 Feb 2012 17:05:17 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Robert Koch http://www.youngmoney.com/wheels/auto_shopping/040110_01/comment-page-1/#comment-9430 Robert Koch Sat, 20 Nov 2010 22:15:59 +0000 http://75.145.89.9/?page_id=69#comment-9430 Mike Sullivan, it's funny that an individual from a lending institution is commenting on dirty tricks. The amount of markup varies on what the current market conditions are for that exact vehicle and what a dealer paid for it. For example, dealers typically put more money into local trade ins than they do for cars they buy at auction in order to keep the local business. So say a dealer has 5 similar Ford F150's in stock. Each of those trucks is owned for a different amount, even if they have the same Retail Value. So the markup in one truck could be $3500 and the other truck could be $1900 due to the fact that they own the one for more money. Dealerships are not non profit companies, they need to show a profit and have every right to do that. The percentage of markup is far less than what it is in most other retail markets. The average used car profit for most dealers is probably $1000-$2500 per vehicle sold. And then from that the dealership probably is paying commission to their staff and the manager and sales person has to get paid from that amount. As long as the car is being sold under a retail amount and is a good deal compared to what else is on the market and available for purchase at that time, then it is up to the buyer if they feel that is a good deal. If you can find the same car for less money, then buy the car that is less expensive. A consumer will never know the amount of markup in a used car sold and individuals outside of the dealership will not know. If a car has been at a lot for a few months then the dealership will have to move the car very soon or have to pay interest on the car and that goes to the bank that inventories the inventory. Just like what good ol Mike Sullivan did from the earlier post. So when a car has been there for a while a dealership will generally lower the price to cost or close to it in order to sell it before the dealer has to sell it to an auction and take a good sized loss. Many dealers will share this info with you if you ask. Assume that a dealer pays someone $10000 for the trade in, the general expense before it hits the lot is closer to $1000 on the average these days and that does not cover any major expense like tires for example and that is a pretty common item to replace. SO say a dealer has $1500 added to the car they are now at $11500 and Retail would probably be around $13900 for a car like that so that is what they will list it at and leave room to negotiate. So say they sell it for $13000. That will leave them with a $1500 profit to then pay 20%-35% of that amount to the sales rep and then still pay the manager as well if there is one involved. Most dealers will have a DOC fee which will be $100 to $300. I am guessing that is what Mike Sullivan is speaking of. That is common and pays for much of the paperwork processing involved and the staff that handles it. The state and county paperwork is fairly extensive in most area's and that is what this is generally for. Feel free to ask the dealer you are by the car from if you have questions. It is clearly disclosed and documented on the legal forms signed to buy a car. It is similar to the fees when you get a mortgage from a lending institution like Mike Sullivan's listed above. Mike Sullivan, it’s funny that an individual from a lending institution is commenting on dirty tricks. The amount of markup varies on what the current market conditions are for that exact vehicle and what a dealer paid for it. For example, dealers typically put more money into local trade ins than they do for cars they buy at auction in order to keep the local business. So say a dealer has 5 similar Ford F150’s in stock. Each of those trucks is owned for a different amount, even if they have the same Retail Value. So the markup in one truck could be $3500 and the other truck could be $1900 due to the fact that they own the one for more money. Dealerships are not non profit companies, they need to show a profit and have every right to do that. The percentage of markup is far less than what it is in most other retail markets. The average used car profit for most dealers is probably $1000-$2500 per vehicle sold. And then from that the dealership probably is paying commission to their staff and the manager and sales person has to get paid from that amount.
As long as the car is being sold under a retail amount and is a good deal compared to what else is on the market and available for purchase at that time, then it is up to the buyer if they feel that is a good deal. If you can find the same car for less money, then buy the car that is less expensive. A consumer will never know the amount of markup in a used car sold and individuals outside of the dealership will not know. If a car has been at a lot for a few months then the dealership will have to move the car very soon or have to pay interest on the car and that goes to the bank that inventories the inventory. Just like what good ol Mike Sullivan did from the earlier post. So when a car has been there for a while a dealership will generally lower the price to cost or close to it in order to sell it before the dealer has to sell it to an auction and take a good sized loss. Many dealers will share this info with you if you ask. Assume that a dealer pays someone $10000 for the trade in, the general expense before it hits the lot is closer to $1000 on the average these days and that does not cover any major expense like tires for example and that is a pretty common item to replace. SO say a dealer has $1500 added to the car they are now at $11500 and Retail would probably be around $13900 for a car like that so that is what they will list it at and leave room to negotiate. So say they sell it for $13000. That will leave them with a $1500 profit to then pay 20%-35% of that amount to the sales rep and then still pay the manager as well if there is one involved. Most dealers will have a DOC fee which will be $100 to $300. I am guessing that is what Mike Sullivan is speaking of. That is common and pays for much of the paperwork processing involved and the staff that handles it. The state and county paperwork is fairly extensive in most area’s and that is what this is generally for. Feel free to ask the dealer you are by the car from if you have questions. It is clearly disclosed and documented on the legal forms signed to buy a car. It is similar to the fees when you get a mortgage from a lending institution like Mike Sullivan’s listed above.

]]> By: Five Good Used SUVs for Your Money http://www.youngmoney.com/wheels/auto_shopping/040110_01/comment-page-1/#comment-3779 Five Good Used SUVs for Your Money Wed, 10 Mar 2010 18:29:15 +0000 http://75.145.89.9/?page_id=69#comment-3779 [...] Buying Recommendations for Young Drivers Consumers Beware When Buying Used Cars The Truth About Used Car Prices aster_cloud_id = '2423201'; aster_cloud_format = '615x200'; document.write(unescape("%3Cscript [...] [...] Buying Recommendations for Young Drivers Consumers Beware When Buying Used Cars The Truth About Used Car Prices aster_cloud_id = ‘2423201′; aster_cloud_format = ‘615×200′; document.write(unescape(“%3Cscript [...]

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