Quote:
Originally Posted by ficke
That is what dealers do they, flip cars for a profit.
They see and buy cars on e-bay and crags list that every body else also saw. The difference is Dealers can look past the dirty windshield, small imperfections that can be fixed for minimal money and the poorly written ads, then they take care of these issues and write nice ads and have the car sitting next to three other cars for the consumer to chose from and then resell the car for a profit.
It works, many dealers are in business and make a living doing the work and taking the chances that the average consumer does not want to do.
64% increase in 4 months is not appreciation, it is dealer mark up.
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64% is not a routine dealer markup. I think 20% is a more normal goal.
The big advantage dealers have is that can buy & sell without paying taxes, title, or registration fees. And their professional association (NADA) guards those perks jealously.
That is 4-8% depending on locality.
Then they also have lower marginal costs for detailing, paint facilities, mechanics, etc.
A dealer makes money on velocity -- not getting absolute top dollar for a car. Better to sell two cars for $3000 profit each per week than to sit on one for two weeks to earn $5000. However, on this car I think the dealer got such a low price they can afford to swing for the fences.
Plus sometimes dealers will hold onto cars like this that generate traffic for their website and their lot -- it is free advertising.