Economics of a car sale

Average MSRP Increase (since 2012)

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2014 Kia Optima:

  • Book value: $12,500
  • Actual price: $16,400(!)

Repeat after me:

Book values are inaccurate. Book values are inaccurate. Book values are inaccurate.

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2019 Chevy Sonic:

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Here is what happened with this deal:

  1. After we purchased the car, we discovered it needed interior work ($425)
  2. Reconditioning costs were way above expectations (Parts alone costed $1,250)
  3. Customer who purchased had challenged credit. This led to:
    • An inability to upsell added products, as the customer was 'monthly payment' constrained.
    • We paid a $1,000 'acquisition' fee to the lender. This reduces the risk for the lender by reducing the LTV.

2018 GMC Terrain:

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2019 Infiniti QX60:

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The average price of a used car is up 32% YOY.

Yet, Q4 was the busiest it’s been in years.

What gives?

Did any if you receive a 32% raise?

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Welcome to the Car Buyer Cheatsheet
Welcome to the Car Buyer Cheatsheet