New Car Pricing Data From Offers On CarWoo

https://carwoo.com/new-car-prices/M80025559-2013-mercedes-be...

4 Door Sedan S550 RWD

AVG MSRP $102,604

AVG PRICE $421,414

AVG DISCOUNT -290.0%

How are you getting an average price of 421k?

I recently purchased a three year old car, and when researching how car dealerships work, it seems like the pricing for used cars is substantially different than new cars, making used cars much harder to make sense of.

With new cars, you're dealing numbers that aren't impossible to come buy -- MSRP, dealer invoice, holdback, buyer incentives, and dealer incentives. With very few assumptions, it seems like you can figure out approximately how much money a dealer stands to make off your purchase (not including upsells or finance incentives) and you can figure out their bottom line, which improves your bargaining power.

With used cars, from what I've gathered, dealers are buying these things from off-lease auctions and then use some sort of networked system that changes used-car pricing in real-time. But the pricing is still all over the place from dealer to dealer and the amount of money paid by the dealer at auction is completely unknown.

When I negotiated my car, I did a simple search of the +/- 1 year, make and model in a 100 mile radius of real ASKING prices (not pricing guides like Edmunds or Blue Book, who, by the way, the dealer was VERY quick to start quoting because they're quoting prices in the dealer's favor). The spread was nearly $10,000 and even isolating mileage to a smaller range produced a spread of several thousand dollars.

I wanted to test out negotiating techniques when I actually went in to buy, so the first day, I negotiated through several rounds, finally landing on my bottom-line price and it was soundly rejected without the "sales manager" even bothering to meet me. During negotiations, I presented no data to back up my price, but was claiming to have done the research.

I went in the next day and I brought in actual print outs from other dealers, took a lower-end price, marked it up a bit, told them that it was a reasonable price and from my estimates they'd still be making reasonable money off of it. If that deal wasn't accepted, I had alternative dealers to work with and would also consider other brands (this tactic, I thought, was good because the brand wants to rope in younger buyers to try and turn them into lifelong customers). They accepted it without any substantial pushback and it was less than the price they had refused to accept the previous day.

eBay Motors: http://www.ebay.com/itm/Honda-Accord-EX-2008-honda-accord-ex...

Carwoo: http://carwoo.com/new-car-prices/T85363842-2014-mazda-mx-5-m...

[1]: http://pages.ebay.com/motors/buy/purchase-protection/index.h...