When buying a used car in the USA...

[merithyn]

We're looking to buy a used car, and I'm not pleased with the price mark-up over the Kelley Blue Book price. Right now, the dealer it going for a 25% mark-up, which seems ridiculously excessive to me. I plan to counter-offer at closer to 10% over KBB.

What's considered reasonable for a dealer to mark-up? I know it's whatever the market will bear, but I'm wondering what you, personally, would pay.

[Barrister]

Blue Book is just a guide and is going to vary a lot regionally.

If you think they're asking too much, shop around and look for comparables.  That'll be more helpful to you than pointing to blue book.



And hey, something to watch out for.  I have a file recently where people were stealing vehicles, getting a VIN number for a valid vehicle, then re-VINning the stolen vehicle with a new, cloned VIN.  I have a couple of innocent buyers who took out loans for their trucks, only to have the vehicle seized from them as stolen property and still be stuck paying the loan.

[merithyn]

Blue Book is just a guide and is going to vary a lot regionally.

If you think they're asking too much, shop around and look for comparables.  That'll be more helpful to you than pointing to blue book.

That's why I asked what amount you'd be willing to pay over that amount. Since it's, you know, a good guide to go by.

And hey, something to watch out for.  I have a file recently where people were stealing vehicles, getting a VIN number for a valid vehicle, then re-VINning the stolen vehicle with a new, cloned VIN.  I have a couple of innocent buyers who took out loans for their trucks, only to have the vehicle seized from them as stolen property and still be stuck paying the loan.

Thanks! This is through a dealer with a huge face in our town, so I'm hoping that won't be a problem there. If so, we have some recourse as it's not an individual but a BBB-card carrying business with a physical presence. Hopefully, anyway.

[Brazen]

The British equivalent Parkers has different prices for whether you're buying privately, from a dealer or part exchange, and for the condition of the vehicle. The initial price is always negotiable. Decide how much you're prepared to pay and initially offer 10% below that and be prepared to haggle. Your ultimate weapon is, "Oh, I was hoping to pay XXX" and start walking out.

[Eddie Teach]

Make sure to get the car fox. 

[Grey Fox]

What ever he paid + 3%.

That's what I got for my new car.

[Admiral Yi]

Brazen has a good point.  Blue Book might be a better guide to private party sales.  Dealers need *some* kind of mark up to amortize inventory costs, fixed costs, labor, etc.

[OttoVonBismarck]

I just buy new now, but I've read in the Wall Street Journal that the long economic stagnation has lead to more people than ever before buying used instead of new, which has lead to the discount for buying used versus buying new being at all time lows.

[merithyn]

The British equivalent Parkers has different prices for whether you're buying privately, from a dealer or part exchange, and for the condition of the vehicle. The initial price is always negotiable. Decide how much you're prepared to pay and initially offer 10% below that and be prepared to haggle. You're ultimate weapon is, "Oh, I was hoping to pay XXX" and start walking out.

That's my plan of action.

And Kelley Blue Book does the same. The price that I'm willing to pay is no more than 10% over the KBB price for a vehicle in similar condition, same miles, and sold by a dealer. I'm okay with a mark-up, but not a 25% mark-up.

[derspiess]

Brazen has a good point.  Blue Book might be a better guide to private party sales.  Dealers need *some* kind of mark up to amortize inventory costs, fixed costs, labor, etc.

Sure, but you know they paid well below the kbb retail price for it.  I would think a rule of thumb would be to look up the dealer trade-in value for the car in question and knock maybe 10% off that to figure out what they paid.

But hell, sometimes they're willing to take a loss on something just to get rid of it. 

[Berkut]

Hmmm, I generally would not pay over KBB at all.

Have you checked Edmunds?

[merithyn]

Hmmm, I generally would not pay over KBB at all.

Have you checked Edmunds?

KBB lists it at ~$10,000
Edmunds lists it at ~$10,500

Trade-in value:
KBB lists it at $7800
Edmunds lists it at $8000

Overall, the price of $13,100 is way over priced, imo.

[Brazen]

Turn up with those priced ringed it red to show them you've done your research and tell them you won't pay over that.

[Darth Wagtaros]

I briefly looked at cars last week when I was told the estimates to repair my present car.  I fucking hate dealers.  Decided to fix my car and just keep it another year or so. 

[MadImmortalMan]

These things seem to vary by region significantly. The dealers where I live generally sell cars a bit under blue book.