For the dealer, a used car parked in their lot with a price tag represents cash to collect. He can argue that he would like to receive this money sooner rather than later, because in most cases the money he spent on the purchase of used cars in san diego was a bank loan, on which he pays monthly interest.
When it comes to determining the selling price of a car, the dealer should start by determining your cash costs.
- First is the price he paid for the car. He could have bought it in exchange for a new car, which means he took the car instead of cash, or he could have bought it from a private dealer, wholesaler, or auction.
- Second, he will add what it cost him to repair and restore the car.
This can include bodywork, new parts, and details.
- Third, if he is a good businessman, he will take into account things like the interest on the loan, the commission to be paid to the seller, insurance and other operating overhead.
With his current and projected costs available, he decides what markup to include in the sales price. The margin reflects the condition of the vehicle, make, model, mileage, options, and most importantly, market demand. Many dealers also include a “trading platform” in their margins. They understand that most people will not buy a car, new or used, unless they feel like they are making a deal and buying it at a lower price than they said. In this way, the merchant will create a cushion large enough to give the buyer a discount and still get what he thinks is a reasonable, or perhaps even more than reasonable, profit.
How long will the dealer negotiate?
Assuming the car is not a popular and one-of-a-kind model in high demand, there is usually plenty of room for negotiation. If the car has been parked for more than a couple of months and demand for the make or model is low, you may want to sell it at a significantly lower price than requested.