The best strategy for trading used car trading

New cars are different. Because of quotas, ladder incentives and other reasons, you can sometimes get a special deal through negotiation, while used car trading mainly focus on finding the right unit.

In other words, if you want to buy a used car at a price below market value, you need to find a used car owned by a dealer at a price below market value.

However, licensed used car trading are a special case, as dealers try to drive sales and their pricing is often very aggressive. The CPO program is designed to help dealers sell rental returns and quickly plan cars. Manufacturers encourage dealers to sell CPO cars at lower profits.

So if you want to get a better deal on a certified used car, I will:

Ask me the price directly

If the price is still uncertain (and I don’t want to spend time looking back and forth once or twice), find another qualified used car and try again.

Note: when I say “ask for the price you want straight up”, I mean you should ask the dealer the exact price you want, not any negotiation attempt. If you want to pay $8000, don’t ask for $7000, because you know you’ll actually be satisfied with $8000. Say eight thousand, and stick to it. You need to prove that you’re not playing games, because when you say you’re “honest,” dealers often don’t fool around.

Generally speaking, looking for a certified used car and a lower asking price is better to use your time than trying to negotiate the car in front of you. CPO dealers usually don’t leave too much space in the price.

More details of used car trading

Certified used cars tend to be rental returns and “plan” cars (that is, cars that are leased to a fleet and then auctioned off after a year or two of use). These programs often have relatively fixed prices for car and rental returns at auctions, which means retail prices tend to be quite consistent weekly.

However, there are thousands of such cars to choose from at any time. They are a commodity in a way. Dealers are not “proud” of these cars because they are usually a) ordinary and b) easy to replace. Dealers tend to price these cars accordingly, emphasizing sales rather than unit profit.

So if you want to buy a certified used car, you are looking for changes in the market. Every Wednesday or Thursday, you see dealers repricing their CPO inventory. For example, if prices fall at an auction, dealers almost always respond by lowering inventory prices. The idea is simple: the value of cars is falling every week, especially certified ones. They can sell the cars they own now at a radical price, or they can cross their fingers and hope that similar stocks of auction value somehow magically increase next week.

On the other hand, if the auction price is stable, the CPO pricing is stable. There’s no need to lower prices just because some customers want better deals – prices are determined by auction, not by consumers.

Smart dealers tend to price their CPO inventory a few hundred dollars above cost. Although this profit margin is very small, but the inventory is basically continuous. If they can sell a lot of CPO rental returns and plan cars, they can go to auction and buy another truck.

Therefore, if you ask for a CPO discount and the dealer doesn’t agree, go to another dealer. Either you’re dealing with a less intelligent person, or you’re asking for an impossible deal. To some extent, you may realize what a good deal is, or the market will change and you will get the price you want.

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