April 23, 2024

How do dealers price used cars – All about the dealership business

In the temporary world, our life is unimaginable without vehicles. We can say that our addiction to automobiles is unsurprising. Almost everyone uses cars daily and the demand for vehicles increases day by day. Notably, demand is higher for used vehicles due to many reasons. First of all, used automobiles cost less than new ones. Another reason is to avoid price depreciation. It’s a well-known fact that a new car loses its 10% value after leaving the lot. The depreciation might hit up to 60% in 2-3 years since the purchase. Hence, we all know that it’s reasonable to get a used automobile. 

Increased demand for used automobiles created new possibilities for dealers. Nowadays you will meet many dealerships offering to buy or sell used vehicles. If you love the auto industry and negotiations, then you should try your skills in the dealership business. For becoming a dealer, you should know many different details about the field. For instance, how do dealerships price used cars, where to find used vehicles prices, how to check and determine whether the car is worth buying or not, etc. Below we’ll discuss all the needed information related to used cars dealerships. The information will be useful even if you just plan to buy a car from a dealer. So, let’s start exploring!

How do dealerships price used cars – All about the terms

Any business has its specifications. Whether you are planning to become a dealer, or want to purchase an automobile from a dealership, in both cases you should know the terms. Knowing terms will help you to be on the same page while negotiating. Before exploring what do dealers use to price used cars, it is preferable to review the terms used in the dealership business. 

Book price – If you plan to involve in this business, you will frequently hear the term “Book price”. Under the term sellers and shoppers mean “Blue book value”. In other words, it means that they have researched and know the average market price of an automobile. 

Asking price – The term refers to a shopper, who intends to get an automobile with the lowest price. Of course, they also realize that they might not get it with their asking price, but as a rule, the negotiation starts by offering the asking price.  

Dealer retail price – While exploring how do used car dealers price cars, the dealer retail price is one of the main things. The correctly calculated retail price can determine how fast the car will be sold. It’s the highest desired price at which a dealer intends to sell a car. You, as a shopper can see the dealer retail price at the announcement. But, as a rule, likewise to asking price it may be negotiated and changed. 

Wholesale price – This is the price that the dealer paid for the vehicle. Hence, it’s impossible to sell an automobile lower than the wholesale price.

Trade-in price – Trade-in is very active in the dealership business. You as a dealer can offer to individual a trade-in price, in case the person sells a car and wants to buy another one. As a rule, trade-in is very profitable in terms of saving tax amounts. In case of trade-in, the shopper pays tax payment only for the difference between the sold and purchase price. 

Now, since we’ve already discussed all the needed terms related to dealership business, we can move on and explore how do dealers price used cars and which sources they use. 

Sources of what do dealers use to price used cars

It’s crucial to know how to evaluate cars correctly. A correctly priced vehicle can be sold sooner, avoiding waste of time and price depreciation. Nowadays, there are many online and onsite resources that help you to determine the real price of an automobile. Below I’ll review online sources that help you to correctly evaluate any vehicle and explore how do dealerships price used cars.

Determining the market price – If you are a beginner in a dealership business, first of all, what you should do before making a decision is to determine the market price of an automobile model. It’s not hard to find the market price. You should simply search for the same model price on different websites and determine the average price of a model. 

Kelley Blue Book – It’s one of the most popular websites for determining the price of a vehicle. It has a free tool to evaluate chosen automobiles.

Edmunds – Likewise to the previous website Edmunds also offers you a free tool to evaluate a car. On the website you can calculate the real price of an automobile. 

vAuto – While exploring what do dealers use to price used cars, we should mention vAuto. It’s an online application that helps you to correctly determine vehicle prices. 

Besides those online resources, there are many other sources that you can find. I’ve reviewed only online resources, as it gives you the possibility to check and determine prices in minutes without leaving a home. Hence, now we can move on and explore details that you should take into account while evaluating and checking a vehicle. 

How do used car dealers price cars and evaluate while checkup? 

I guess you already have some point of view about how do used car dealers price cars. Besides, it’s important to know how to conduct the checkup process and what to take into account, as it’s the part of determining the real value of a car. In the beginning, you might correctly determine the market price, but after checkup, the price might be totally changed upon the vehicles’ condition. Here is the list of details that you should take into account.

  • The look
  • Mileage 
  • Breaks
  • Under the hood
  • Tires
  • Electrics 

Besides those technical aspects, you should check the vehicle history with the help of a VIN code. The VIN code is like a fingerprint for any automobile. The code is individual for each car and gives you many details about it: insurance, accidents, thefts, warranties, etc. Combining all those details will give you a clear picture of the vehicles’ condition and helps you to correctly determine the price.


On the one hand, all the above-mentioned information might seem quite overwhelming, but hopefully, you find it interesting. Nonetheless, in the beginning, the answer to the question of how do dealers price used cars seemed blurred, hopefully, now you have a clear picture of it. As reviewed, there are many online websites and applications that help you to determine the price. But, besides online resources, it is crucial to remember the importance of the actual, onsite checkup. It gives us the possibility to have a whole picture of a vehicle and determine the price correctly. Hence, after reading all the details, I’m sure you are ready to make the first steps to success! Good luck!