Why Does A Car’s Selling Price Quickly Become Low After It Is Driven Out Of The Car Dealer’s Lot?

A brand new car was bought for $18,000. After it left the dealer’s lot, it could not be sold for more than $17,000.


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This entry was posted on Tuesday, December 8th, 2009 at 6:30 am and is filed under Car Selling. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

8 Responses to “Why Does A Car’s Selling Price Quickly Become Low After It Is Driven Out Of The Car Dealer’s Lot?”

  1. because the dealer is in the business of making a profit. You buy it from them retail for 18000, they buy it from the manufacturer wholesale for $16000, plus any additional incentive money they get later. So the car that was NEW yesterday on a MSO (manufacturer’s statement of Origin) with ZERO miles, brand shiney new in the box. Is now USED, even with 10 miles. if they bought it back from you in this scenario, and they expect to make a $3000 profit on thier used car sales, then, they must buy it for $130000 to justify them selling a Used car for less then Someone can buy a NEW one for at NET NET COST i.e. this example of $16000. Thats the way the Market works, and all dealers play on that same playing field. Therefore those numbers are collected by reporting companies and published as Trade in and Wholesale and Retail Values by companies like Kelly Blue book, NADA, Edmunds, and Black book. They simply now reflect the market that has been established over the course of years and years. If you went to best buy and wanted to buy an expensive computer or something. You see 2 boxes, one that is brand new with the factory seal, and the other has clearly been opened and reclosed with packaging tape and marked customer return, open box, complete and full warranty, ok. Which box are you going to pay full retail price for even though you’ll get the same thing. (its kinda like that. People like Brand NEW NEW Stuff)

  2. Snoop Bloggy Blog on December 8th, 2009 at 6:50 pm

    ehh all these people are wrong , ezxcept Michael is sorta right.
    It is because, yes a dealer is in the business to make a profit.
    Every dealership buys thier cars at a wholesale value and sells them for retail value, or tries thier best to.
    What you bought the car for has no reflection on the cars value,that just means what you paid for it.
    After you have bought the vehicle for retail price .. if you try to sell it, since you are not a dealer.. you would be getting “wholesale” value.
    A dealer would only pay you wholesale value because in turn he is going to sell it for retail.
    In essence, when you buy a vehicle you are paying retail price, when you sell them you are selling for wholesale… the actual value of the car has not changed.
    A brand new car sorta same difference except brand new cars are valued by invoice which is the same as wholesale.
    The dealer bought the new car for roughly wholesale and sold it to you for the regualr retail price so he can make profit… now you drive it off the lot and yes you lost the money you paid the dealer in profit… but again that was not anything to do with the value of your car .. the “value” was wholesale/invoice the whole time.
    Get it ?

  3. More like $15,000. It is no longer “new” and there is no telling what was done with it in just a few miles. You might red line the engine and break it in incorrectly. A private owner does not have the service department, warranty capabilities, or overhead costs to make up that a dealer has.Also it is expected that something must be wrong with the car if you are selling it so soon after buying it.

  4. once you drive it off the lot, it’s considered used and secondhand even if you put just 10 miles on it. people won’t pay top dollar for a used car like thye would for a brand new car. buying brand new has got to be the dumbest financial move. a slightly used secondhand car would work just as well and save you thousands.

  5. cause it was used..
    why would you want to buy a car that has been used for the same price as a new car
    but yea, thats still a little high
    you lose more like 20 percent
    so thats, no more than 15000 grand

  6. Once a car has left the dealer’s lot, it is technically ‘used’ and so cannot be sold as a new car (and so for the full price), even if it’s in perfect condition.

  7. That “new” vehicle became a “used” vehicle the minute it was driven off the dealership property, and instantly lost 15% of its value. It’s called depreciation.

  8. it’s just another example of how car dealerships are rip off artists.

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