If you have watched live television in the last month you have likely seen a number of commercials from automakers. During the Super Bowl and Grammys we saw a number of commercials from Ford, Chevy, Dodge, Mercedes, Audi and BMW. While the new car commercials are very well done and completed on a huge budget, it is quite obvious used car commercials are completed on a tight budget. You know, the commercials where the owner of the dealership has his small dog, daughter and son. The one where there is this terrible song in the background and the graphics are done with Microsoft Paint.
What you may not realize is the more corny the commercial, the more it sticks with you. You may remember a model of a brand new Ford of Chevy but you don’t remember the dealership that was advertising it. You definitely remember the guy that rides in on a donkey and tells you that you are going to get rock bottom prices if you come to [x] dealership.
What is interesting is most used car dealerships actually have high profit margins. They get used cars at dirt cheap prices and can mark them up quite a bit after running them through the repair or service shop. As a buyer, many are willing to buy a used car that is slightly marked up because it is significantly cheaper than a new car. It is also the case that used cars make dealerships money with financing. Very rarely do you find super low financing on used cars.
So, if you are heading down to Performance Automotive used cars or happen to stop by the used car section of your favorite dealership, know that you likely have some leverage when it comes to negotiating a lower price. Most dealerships do not want to hold on to used cars for month after month. It is also the case that as soon as they can get that car off the lot, they can get another car on the lot.
Even though you think those used car commercials are very corny, they are serving their purpose. You know when you drive by that dealership that the owner has a small white dog and a daughter that is in college.