Rarely a day goes by that I don’t get a telephone call or email from one of my customers inquiring about a used car. Everyone seems to be looking for a used car or knows someone who is. Being a used car dealer allows me into the world of dealer only auctions and factory off lease events. But I am more of a spectator than a player. I head out to the Toronto Auto Auction once every couple of months hoping to pick something up to satisfy one of the many requests for vehicles.
On almost every instance I come home with my ‘tail between my legs”. My problem is always the price differential of what I see vehicles being listed on Kijiji and Autotrader and what they are selling for at the auction. More specifically, the lack of price differential.
Used car dealers are so desperate to move product and generate a little bit of income that they are selling cars at or just above their cost. Why would they do this you ask? Its all in the fees.. the $395 administration fee, the $495 Safety fee and of course there are the payouts that are generated from placing the potential purchaser with the highest risk finance company and warranty company.
I can’t compete, I don’t offer financing, I carry the load of the warranty internally and I don’t charge admin or safety fees which always makes my (realistic) price of my car look higher. Next time you look at a used car on the internet, please keep in mind that this is rarely the out the door price.