When you’re out looking for a used car, you might wonder about the prices you see at car lots. How much are these cars really marked up? Well, let’s talk about that. (TL;DR – Used car markups range from 10% up to 45%, but expect more like 10-20% on average.)
Used Car Dealer Price Mark Up Considerations
First off, the markup on used cars can vary a lot. It’s not like there’s one set rule for every car lot. But, on average, you can expect a decent markup. Why? Because car dealerships need to make a profit. They’ve got expenses like paying their staff, maintaining the lot, and all the costs that come with running a business. Now, how much do they actually mark up these preowned cars and trucks? It’s common to see markups ranging from 10% to 45%. This might sound like a lot, but remember, this isn’t just profit. Out of this markup, dealerships cover costs like repairs and detailing to make the car ready for sale. They also have to consider any potential risks, like if a car doesn’t sell quickly or needs unexpected repairs.
Real Deal Behind Used Car Pricing
When you’re looking at used cars, you might wonder, ‘How much do dealers markup used cars?‘ It’s a good question to keep in mind to figure out if you’re getting a fair deal. So, when you see a used car priced at, say, $12,000, the dealership probably bought it for less. Maybe around $8,000 to $10,000. This isn’t a hard and fast rule, but it gives you a ballpark idea. Here’s a tip: when you’re looking at used cars, don’t just focus on the sticker price. Ask about the car’s history, like its service records and how many owners it’s had. This info can give you a better idea of whether the car is worth the price. Remember: there’s usually some room to negotiate with used car pricing. Automotive dealers expect a bit of haggling, so don’t be shy to discuss the price. I find this is especially true with preowned vehicles. Just be reasonable and respectful about it.
My Approach to Used Car Deals
When I’m in the market for a used car, my approach is a bit different. I focus on specific strategies that have served me well over the years. Here’s what I do:
- Target End-of-Month Visits: I’ve found that visiting dealerships towards the end of the month can work in my favor. Salespeople often have quotas to meet, and they might be more willing to negotiate to make a sale. For instance, I once got an extra $500 off a sedan because it was the last weekend of the month.
- Bring a Printout of a Similar Car’s Listing: I always arm myself with information. If I’m eyeing a particular model, I’ll find a similar one listed cheaper online and bring a printout. This tactic worked like a charm when I showed a dealer a listing for the same model but $1,000 cheaper. It immediately set the stage for a lower price negotiation.
- Mention Competing Dealerships: I casually mention that I’m considering other dealerships. Once, when I mentioned I was looking at a similar car at a different lot, the salesperson was quick to offer free servicing to sweeten the deal.
- Use the Car’s Time on the Lot: I use a car’s time on the lot as a bargaining chip. Cars sitting for a long time might cost the dealer in maintenance and space. I once asked how long a car had been on the lot and found out it was over 90 days. I used this info to negotiate a lower price, arguing that the car was costing them more by sitting there.