The Car Maven likes data. We not only like it, we use it in our work with our clients to ensure that you are getting the best value for your money. We also work very hard to ensure transparency in the entire process; we help to explain things that may not be readily understood. Sometimes there are trends and fast-moving developments that are even invisible to the typical automotive shopper. So, we stay up on these trends, so our clients don't have to.
We recently came across a very interesting study which was conducted by our friend, Josh Wortman, MSc, of General Forensics, based in San Diego, California. We think the content of his article is helpful in understanding what happens from time to time in the pricing and ultimate sale price of automobiles. The study was completed looking at sub-prime lenders (those lenders who focus on customers with credit scores of less than 600, in general), however we feel that the substance of the article can be valuable for customers of any credit quality.
Analysis of Sales Price vs List Price and Markup at Independent and Franchise Dealers
published March 5, 2018
We ran an experiment comparing advertised price to sales price (as shown in the loan contracts) sent to various sub-prime lenders. The loan apps were submitted by independent and franchise dealers around the USA including 4 states where AutoCount does not provide dealer level information. From this we identified pricing patterns that impact risk for a sub-prime lender. (Note: AutoCount is a division of Experian Automotive, providing market data for the industry.)
We summarize the most important points here:
Our conclusion? Dealers are consistently working VERY hard to make the sales transaction happen. It can be through the use of various levers to do so, and, unfortunately it may appear to be a series of magic hat tricks. That's why it helps to have credentialed experts working on your behalf. If you feel you would like an unbiased, personalized advocate in your corner, reach out to us. We think you'll be glad you did.
Hope to hear from you soon.
The Car Maven
SOURCE: Analysis of Sales Price vs List Price and Markup at Independent and Franchise Dealers, LinkedIN, published by Josh Wortman, MSc, on March 5, 2018. Published with permission by the author.
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