Used Car Lords Over Brand New
||By Anna Finger
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The United States has tightened its grip on the used car business, with dealers now selling more recycled cars than brand new ones. In 1996 for example, 106 car dealers reported the sale of more used cars in their lot as compared to only 75 dealers in 1992. The sale of used cars has become brisk business, particularly the pre-owned cars, which accounted for the majority of cars sold. Buyers argue that a new car model that sells well will sell twice its retail price when sold as a used car eventually
Buyer preference for pre-owned cars is based on the fact that used cars exhibit low mileage, especially in the case of off-lease vehicles. Late model vehicles show renewed sales vigor especially if properly reconditioned and warranty included. Car dealers admit though that used cars give wider profit margins than brand new cars. Some dealers reported earnings of two to three times higher than new cars. This kept many dealerships afloat despite demanding times.
Buyer perception of used cars today is totally different from previous years which portrayed used cars in the state of unreliability and aesthetic decay. Today the distinction has been somewhat bridged, because used car buyers expect the same level of quality found in brand new cars. To satisfy the high quality expectations of used car buyers, dealers and car manufacturers alike should keep their certification programs intact. In-house used car certification has been the standard services of most car dealers.
Manufacturer certification is a vital factor that flock buyers to franchised dealerships participating in this program. Because of this program, used cars have been outperforming the sales of new cars since 1996. If dealers spend a few hundred dollars to recondition its vehicles and make it more road-worthy, this would increase the salesman's level of confidence and deliver a profit margin of $ 2,000, more than what is expected if the car is sold on an ”as is” basis. Most car dealers do not see manufacturers' certification as an expense but rather as an investment since it puts forth more reduces while reducing the haggling and negotiation involved for a deal to push thru.
Another promotional idea started out by car dealers is the display of reconditioned cars alongside new cars in showrooms. This concept boosted sales and increased the sales of used cars . Dealers today patronize the total reconditioning of used car stocks to tap the sales potential of the market.
In the end, this development practically diminishes the distinction between used cars and brand new ones.