In general, how much did a new-car dealership pay for a used car if they sell it for $12,000? Obviously, a ballpark figure is going to work fine. Thanx in advance
If you go to Kelly Blue Book (www.kbb.com) you can find the difference between what your car is worth in a private sale vs trade in with a dealer. You can also get retail and wholesale numbers for your specific car. This’ll give you a good idea.
For the record, Kelley Blue Book prices are inflated and reflect reality only rarely and by chance.
NADA is a more accurate resource, but it still won’t give you the gospel on the used car price because dealers get used cars from all kinds of places, not just by pirating the trade-in victim. Quality vehicles are purchased from a variety of auctions including police impound, salvage and estates. The auctions are a great place to aquire a car at 30-75% of its market value which can then be detailed and sold for a quick profit.
What Matchka said.
BTW, there are two different versions of the NADA guides - consumer and dealer. You want the dealer version. Most libraries will have this in their reference section. If you strike out there talk to a friendly bank manager - they use the same guide to figure out how much they should loan you for a car. You can tell the difference between the two because the consumer version has “Consumer Edition” on the cover and only lists retail prices.
The book is small, with a yellow & blue cover, and is printed on bible paper. There are different versions for each region, and the guide is updated montly. There are 3 prices listed - trade, retail and loan. Remember that prices are for cars in good condition - make deductions for anything that is broken.
Link: http://www.nada.com/
Another good source of pricing information is Edmunds.
Is Kelly really that far out of line with reality? That’s unfortunate, I’ve been planning a used car purchase (and the sale of my current car) using it. Time to hit the library in search of NADA.
Yes, Kelley is. With NADA in hand, run a few comparisons with Kelley and Edmunds. Edmunds is consistantly pretty close, kelley is consistantly low on trade-in and high on retail. Now you don’t have to wonder why dealers love to show customers kelley blue book values - they win on both ends of the deal.
Some experiences with Kelley Blue Book and the others, as well as a previous thread on negotiating a price for used cars.
In my experience, working at several different dealerships, no. At the dealerships I have worked for the single best source for quality used cars was trade in from people who bought new cars. The best of these we kept, the junk was shipped to the auction. I have run lots of cars through a safety inspection only to have them go bye bye to the auction. The second best source was the auto makers private auction of off lease cars. (This is an auction open only to the dealers of that make of cars.)
Rarely if ever would our used car buyer go the regular auto auction, too much junk out there.
YMMV of course.
Getting back to the OP, it is almost impossible to determine just what the dealer paid for the car if it is a trade in. The dealer might have over-allowed on the used car to cover the buyer being upside down in his prior loan. (Of course the price of the new car would be jacked up to cover this over allowance) Or under allowed if the customer had bargined a give-away price on the new car. Condition of the car also enters into the mix here. A real creampuff that only needs a smog will fetch more than a shitbox that needs 3K of recon.
As a pretty good guess I would say that the dealer paid somewhere between 7-10K for a car that he expects to sell for 12K. Ater reconditioning the car this means the dealer could expect to net 2-3K on the deal