Dealers Selling Used Cars 8-9% Below Asking Price on Average
CNW Marketing Research of Brandon, Or., consistently does interesting research on the used car market. I devour its monthly reports for information that is going to help the used car buyer or seller. This month’s hot tidbit is it’s a great time to be a used car buyer because dealers are selling almost 10% below asking prices.
CNW reports that the average franchise asking price for November 2008 is $9973 vs. an independent seller retail price of $8142. That shows the franchise dealers have better used cars to sell, but you’re probably going to find older-model, more affordable used cars at independent used car lots.
The average franchise selling price was $9158, or 91.83% of the asking price. Independent dealers appear more willing to deal (or mark their prices up higher) because their average selling price was $7347, or 90.24%.
The lesson you can take away from this? It’s one I’ve repeated before. Never pay the asking price. Offer 20% less. The dealer will probably counter with 10% less – and you’ve beaten the average! Private sellers can also take a lesson away from this. Expect to sell your used car for below its market value. That’s just the way the market is going right now.
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Does that also mean that dealer wholesale (and dealer auctions) are also going for about 10% less?
I think there’s at least two more steps in the negotiation…you counter the dealer’s offer (-10%)
with your own (-15%) and settle at
(-12%). There’s often room to bargain – especially if the vehicle has been sitting on the lot a while.