- Find out the average retail price for sale by dealers by checking Kelley Blue Book and Edmunds.com. Then look up ads by dealers in your area on a site such as AutoTrader.com.
- Get the average trade-in value on the pricing sites. If you are shopping at a new car dealership, the car may have been taken in trade on a new model. In that case, the acquisition price usually is even lower than the wholesale auction price.
- Get the wholesale price. Download the free app developed by MyVinny.com from the Apple Store or Google Play, scan the VIN number on a car you are considering (usually on a plaque either on the dashboard on the driver's side or on the door post visible when the door is open.) Within a few seconds, you will get back the wholesale price.
- Talk to the dealer salesperson, try to find out if the car is a trade-in. He or she might tell you it was traded in while trying to convince you the car is in good condition. If it was traded in, the dealership's cost basis was likely lower than the wholesale price.
An Example
Take the case of a top-selling midsize sedan, a 2011 Toyota Camry SE. Assuming it has 30,000 miles and typical options, Edmunds lists the dealer retail price at $17,038. The MyVinny average wholesale price for 2011 Camry is $14,765. And the trade-in value is $14,258. So the dealer stands to make around $2,780 if the car is a trade-in and $2,273 on an auction car.
Alternatively, let's say you are looking at an auction car (from auction sites such as Manheim.com). Set your aim at getting the Camry for $1,000 over the wholesale price while letting the salesperson know you are aware of that wholesale number. But start out bidding $500 over the wholesale price, with a goal of ending up at $1,000 over, or $15,765. That is still 8 percent profit for the dealer.
If the dealership won't meet your target, you have to decide how badly you want the car. But don't go much above $16,000 -- or about $1,000 off the original asking price. Especially with a popular car like the Camry, there is always another dealer to offer a competing price.
As with buying new cars, doing your research means saving money while still getting a used car you want.
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