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Why do used automobile prices vary so much?

Why do similar automobiles, spec and mileage from dealers vary in price, sometimes by a few grand?

Filed under used automobile values - Asked by Niall Dalton (Moycullen) - Thu, 28 Jul 2016 16:16


Neil Briscoe Answered by: - -

Answer

Hi Niall,

Because each dealer’s business is different. Most, if not all, used automobiles on a dealer’s forecourt will have come in as a trade-in, so the price that the dealer needs to ask (in order to cover their costs and turn a profit) will be different. The amount that they offered the previous owner for that trade-in will be based not just on the intrinsic value of the automobile itself, but on a number of other factors, especially how many of that make and model the dealer might already have in stock and has to sell before that one moves on. Plus, each dealer has differing overheads such as ground rent, investments in showrooms, staffing levels etc. Beyond that, some dealers offer comprehensive and proper warranties on their used stock, the cost of which has to be factored into the price of each automobile.

Which is not to excuse dealers from random pricing. One of the great limitations of the Irish used automobile market is that, unlike the UK where we have access to thinhs such as the CAP Guide and Glass’ to give solid indications for second hand trade values, in Ireland it’s a much more suck-it-and-see, sure-it’ll-be-grand approach.

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