How Used Car Dealers Are Trying To Game The Online Pricing Model

Illustration for article titled How Used Car Dealers Are Trying To Game The Online Pricing Model
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Now that most used cars from dealers are listed on major third-party sites like Autotrader,, CarGurus and others, the strategy for pricing cars and determining the best deal is a lot different than it once was. Dealers have to be more competitive out of the gate, but some stores are still falling back on old tricks.


I’ve said numerous times that used car shopping is more about finding the best value versus the biggest discount and despite the fact that I broker dozens of used cars every month, there are still people who are convinced that you can haggle several thousands of dollars off of a lightly used car.

When a car is posted on a third-party listing site, that listing is competing against similar cars at similar price points. So if a dealer bakes in several thousands of dollars worth of markup, it’s likely a potential buyer will just call the cheaper cars first. A new trend amongst dealerships selling used cars is to post a price that is well below the market average only to make up for it later with back end fees. So while the posted price or sale price looks competitive that value is quickly eroded by other nonsense.

I was shopping for a used Genesis G80 for a customer in California and came across a lead at a Kia dealership in New Jersey. The price was good especially for the mileage and I requested an out the door quote.

This is what they sent me:

Illustration for article titled How Used Car Dealers Are Trying To Game The Online Pricing Model

First, they added the LoJack theft protection to the car for $995. Now LoJack does work and provides some value, but almost a grand for it is a bit overpriced.

Next, they have a “preparation fee” of $1,295, I don’t know exactly what they are “preparing” for almost $1,300, but this fee is akin to similar “reconditioning” or “certification fees” which is to say it’s just a ripoff. Dealers have reconditioning costs when it comes to selling a used car, that’s part of the business but those costs should already be accounted for in the posted price, not tacked on later. The doc fee of almost $600 and DMV charge of $300 aren’t extreme but when combined with the others totals to almost $3,200 over the posted price before tax is added in.


I know you are very shocked that a quote like this came from a Kia dealer, since those stores have such an upstanding reputation for presenting an honest and straightforward car buying experience. However, this tactic is not unique to Kia stores, though it is more common in dealer dense areas were used car inventory is saturated therefore some dealers feel the need to resort to these tricks to get people in the door.


Of course, the best defense against this is no different than any other car deal, always get itemized quotes in writing and question extraneous fees.

If the dealer refuses to budge, take your business elsewhere.

Tom is a contributing writer for Jalopnik and runs He saves people money and takes the hassle out of buying or leasing a car. (


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