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To make more money Posted by Bill Homer [Email] (#3427) [Profile/Gallery] (more from Bill Homer) on Wed, 29 Jul 2009 09:56:18 In Reply to: why would a dealer do that?, BrianG, Wed, 29 Jul 2009 09:05:28 Members do not see ads below this line. - Help Keep This Site Online - Signup |
It is now so easy to obtain invoice price information on new cars and pitch one dealer against another that many dealers don't really make that much money on new car sales (excluding the hidden "holdback" from the factory). Used cars are a completely different story: the buyer doesn't know what the dealer paid, there are no exact comparisons (different levels of mileage, wear and tear on used cars), so dealers can mark up the cars as they see fit. When one of my relatives sold Volvos, he actually preferred selling used cars for the higher commision he was bound to make on a sale with more dealer profit.
The trade in price that the dealer will offer on a deal like this will probably be on the low side; they know that the seller needs to raise some cash, and may take advantage of the situation. One of my friends had to do a swap like this during a previous real estate recession, trading in a BMW525i for a Toyota.
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