QuestionI am trying to buy a used Toyota Yaris hatchback and I have been to large Toyota dealerships and small independent dealers in Ottawa, Ontario. I understand the chain dealerships have higher prices, because they buy the higher quality used cars, have a team to recondition it, provide "Toyota Certified" vehicles, and have a good reputation. They move a lot of cars, and so they do not need to budge on sticker prices. I ask if they can knock of $500 for a $12,000 car, but they refuse to budge. I walk and that's it. Anyway to get them lower their price or is improvements to the car my only choice (i.e., rustproofing, fabricguard, etc.)?
Then at smaller independent dealerships that sell a variety of used cars, they won't budge on the sticker price either when I ask for $500 off a $8,000 Yaris. They say they can't because their profit margin is too low. The car has been sitting on the lot for 6-months and we told him we would sign if they knocked off $500. So we walked.
In the first case, the big chain dealership does go through a lot of cars, and their "name" speaks for itself. So I understand why they don't need to negotiate. But smaller places have small inventory and they won't move on price. What gives?
I have bought new cars and it's easy to bargain for new car prices, but impossible for used cars. Any advice or should I just believe they aren't making enough of a profit and pay sticker price? Thanks.
P.S. Your website is great! Very helpful and informative - a must read for all car buyers.
AnswerHi John,
I will admit it's kind of odd both dealers would not negotiate even for a few bucks, in the case where the dealer has had vehicle in stock for 6 months I am sure the original asking price when inventory was fresh was much higher and now brought down to a level where the dealer feels it will sell.
Supply and demand at the dealer auction could be another factor,,, on average the auction sheets show depreciation on vehicle's with every month passing, but sometime with supply being low it works in reverse " example " about 18 months ago at Milton and Ottawa auction some Ford lease truck models that were selling for around 20K,,, 3 months later were selling for around 22K,,, it's kind of hard for me to explain, but sometime it works in reverse.
With the Internet in place - gone are the days where a dealer could be negotiated down on valid inventory $2000 - $2500. on a $10,000 vehicle,,, consumers shop asking price, and dealers must stay competitive.
Also note there are many dealers now where prices are firm and the only negotiation factor may be the admin fees.
The fact that both dealers let you walk tells me a fair deal was in place,,, I will be interested to know details of final outcome ?
