Why do cars lose their value when driven off the dealer parking lot?
Cantankerous Steve asked:
What about New Used cars? Do they also lose their value when driven off the parking lot?
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on Sunday, December 20th, 2009 at 4:48 am and is filed under Buying & Selling.
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What about New Used cars? Do they also lose their value when driven off the parking lot?
Why is this?
December 22nd, 2009 at 9:11 pm
If you buy a car from a dealer, you are paying more than it is actually worth. If you weren’t, the dealer wouldn’t be able to make a profit. So the minute the sale is completed, that markup comes right off the top. In the case of a new car, it becomes a used car and can never be sold as new again. A new car loses 15%-20% of its value instantly. Scott H
December 25th, 2009 at 3:24 pm
Dealers make profits. Thats the reason they are in business.
On new cars, as soon as you buy it, its no longer new, its used.
On a used car, the dealer makes probably $1500-2500 on the car which means its trade in value is $1500-2500 less than you paid.
Its the wholesale to retail spread.
Works the same way with a TV. If you try to sell a TV you bought 3 months ago, it will only bring 50% of what you paid. N