Notwithstanding some reports of falling used car pricesconsumers are still faced with used cars that are much more expensive than anyone expected† In a market where stock moves quickly and dealers rarely give up, here’s how to find out if you’re getting a fair deal.
In this insane used car market, buyers need to understand that a “deal” is relative to what’s available and the price spectrum your desired vehicle falls into. Forget what you paid for a particular car a few years ago – everything is more expensive now†
You should usually ignore the “savings” a dealer says you get† I would also warn you not to stick to what a third party pricing website like KBB or Edmunds tells you should pay for a particular car. These sites can provide some helpful guidelines in terms of general price ranges, but the reality is that a car is not worth what someone is willing to pay. Just because your target car has a retail price above what the guidelines say doesn’t automatically mean it’s a bad deal.
One of the best methods I’ve found over the years is to research a vehicle listing in relation to other similar vehicles in the same region.
As you can see, the prices for most lists are comparable to mileage, but let’s compare the two lists below.
Both cars are Nissan Rogues 2019 with the Premium package, but the car at Millenium Chevrolet has about half the mileage for just $74 more. On the face of it, that makes this car a better value. Advertised prices don’t tell the whole story, though. Dealers have been “playing” with the online pricing system for a while, even before the stock junk† They advertise a competitive price, only to add in a bunch of fake fees that make the overall price less competitive. That’s why it’s critical to get a full house number from a dealer so you can make an accurate comparison.
Of course, where this approach becomes difficult is when you compare models with different trim levels. This is often the case with luxury cars and pickup trucks, where you can have vehicles that are visually similar and may even have the same “upholstery” but can have significant differences in their original MSRP. This is when it is very useful to have access to the original window decal or vehicle build sheet. Brands like Volvo, Stellantis and Hyundai do a great job embedding these window decals into Carfax reports. There are also third party websites such as VinAnalytics that can provide construction drawings and original MSRPs for more expensive vehicles such as Porsche and BMW.
Besides looking at the year, mileage/warranty balance, price and equipment, another factor is the distance. Casting a wide net will give you more inventory to choose from and potentially better value, but you’ll want to balance the travel/transportation costs of getting that car with buying locally.
What many buyers get frustrated with is that when they feel the need to haggle back and forth on a car that is already well priced for the market, that vehicle is snatched by someone else. If you’re not sure if you have a competitive deal, ask yourself this question: Can I find a car of the same model year or newer, with similar mileage and equipment, for less? If the answer is no, you’ve probably found your deal and need to act quickly.