Used Car Values

Common Dealer
Used Car Costs &
Auction Standards

Used car values, auction standards and common used car costs...
The 2^nd of 4 steps in the KBB used car values guide.

Now that we've figured the "used car invoice," from step 1, it's time to learn some auction standards and common costs dealers incur with the cars they buy from auction.

Both of these factors will play a big role when we figure the dealers used car cost in step four.

General Dealer
Auction Standards

Here are some auction standards to keep in mind when car dealers are buying cars from auction:

1. Car dealers will usually buy average domestic vehicles for 10-15% below KBB Wholesale Book Value and this usually translates to buying a vehicle for $1,000 to $3,000 below wholesale. This is referred to as buying a vehicle back of book.

2. Imports sell for more than domestic vehicles, sometimes selling for over Wholesale Book. This is especially true for older imports, like 6-7 years old.

3. The newer the vehicle, the further back of book a dealer will be able to buy it. Dealers are usually looking to be anywhere from $2,500 to $5,000 back of book on 1-2 year old vehicles.

4. Newer domestic vehicles will typically sell for closer to the $5,000 back of book figure, wherein newer imports will sell closer to the $2,500 back of book.

This is due to domestic auto makers having such large rebates offered on their "brand new" vehicles and import auto makers typically having very small or no rebates offered on their "brand new" vehicles.

5. When gas is $4.00 a gallon trucks and large SUV's used car values drop drastically. I bought my Expedition for $7,000 back of book when gas prices were crazy.

6. Diesel trucks sell for more money than gas trucks.

Common
Used Car Costs

1. Vehicles average $400 to $800 in reconditioning costs. The newer the vehicle, the closer to $400 and the older the vehicle, the closer to $800.

2. Transportation costs will usually run $100 to $200 dollars. This depends on how far the dealer is from the auction.

3. The auctions buy fees are typically 1-1.5% of the sale price of the vehicle. Sometimes a flat between $125 - $175.

4. Flooring costs, the financing dealers use to cover the cost of the vehicle while it is in their inventory, are about 1%, per month, of the amount borrowed.

5. If the vehicle is a Certified pre-owned (CPO), the inspections run between $400 and $700.

Don't worry about writing these used car costs down (just keep the rules in mind), because we will cover them again in the final step when we put it all together and figure a car dealers used car cost.