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Old 04-10-2014, 11:09 AM   #12
DealerEx
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Join Date: May 2009
Posts: 548
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Quote:
Originally Posted by mr4t60e View Post
This might be slightly off topic but since inventory supply issues were mentioned several times, I figured this is as good of a place as any to raise this issue.

Is the consensus among people buying inventory/running used car dealerships without a trade in stream of inventory that such high prices on the wholesale side are the "new normal" for the business, and eventually the retail prices will reach equilibrium with wholesale costs, or is this just a fluke of the market as a confluence of poor consumer confidence, weak income growth and all the other macro factors that influence pricing?
I think a lot of the problem is the proliferation of higher end BHPH operations. The buyers for them are really not concerned with the price they pay, as long as they know it is something they can sell easily. For example, last week I was looking at a really nice 2003 Dodge 1500 regular cab with 113k on it. wasn't a loaded up SLT, cruise & tilt but no PW/PDL, but it had factory 20" wheels and tires, and it was clean and shiny red paint. NADA ave. trade is $3450...clean trade $4225 and retail $6425. It sold at the auction for $6300 to a large, multi location BHPH dealer. If you paid that price and sold it for $7500, you'd have to get about $4000 down to get it financed at a bank or CU after TT&L. The BHPH store will put it out there for $9000 and get it because their customers don't care about the price as long as they can get it financed.
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