Even though there has been a constant growth in the new car market, the used car industry has shown to be valuable with high number of used vehicles being sold. In fact, it may take time for the growth of new car market to be renewed and have effect on the used car market. This may be because many people find it hard to afford new cars because of financial restrictions.
What Draws People to the Used Car Industry?
Even though finance is the most important factor as to why many people buy used cars, there are still other factors about used car industry that every individual needs to now. Many people have been drawn to the used car industry because the maintenance costs in used cars is lower than the maintenance costs in new cars. The other reason drawing many people to the used car industry is that many people think that trading option in the used car market is more appealing than in new cars market. These are the main reasons making the used car market improve despite the number of new cars being manufactured and imported to several countries in the world.
What to Know Before Buying a Used Car
Before any person thinks of buying a used car from a dealer, it is always important to understand some things about the pricing. Understand that a franchise dealer of a used car will always price his car at a percentage that is more than what the car is to worth in the wholesale market. The wholesale value of a car always depends on the factors like the age of the car and the demand of the car. Other factors like make, model, mileage, options and general condition of the car also affect the wholesale value of a used car. At times the price of the used car may not be that cheap as you expect because the dealer always adds on the price the cost of him reconditioning and repairing the car. The dealer may also add a markup to cover for the profit objectives that he has.
The markup that the dealer adds on the used car also has a reflection on the things like the car’s condition, the make, the mileage, model, and the demand of the car. This means that the markups of the car will always vary depending on several factors. After you have understood this, you can now start planning for negotiation before you get the car bought.
Negotiation Tricks about Used Car Industry
Most of the used car dealers will always include negotiation pad in the car markups. This is because the dealers believe that most of the people will not buy the used cars unless the buyers get the cars at lower prices than that indicated on advertisement. Therefore, you need to understand that the dealers have already planned for a discount and they will still make enough profit. For this reason always feel free to bargain until the price of the used car fits your pocket.
Generally, the used car industry usually has two main drives. The main drive is that the average price per used car has been continually increasing for the last few years. This is mainly because many people opt for younger used vehicles. The other drive is that even though the average price per used car is increasing, the sale volume of the used cars is not slowing at all. This means that the used car industry is still expected to have a tremendous growth over the years to come.
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