Why are cars so expensive on Craigslist?
I was helping a friend to buy a cheap car in good condition in California (less than 100k miles for less than 00) and we looked into Craigslist for cars, since we thought that Craigslist was cheaper than most other options. Auction wasn't a good option since we needed the car quickly and quality there varies and we don't really know how to deal in auctions.
I was surprised that almost all cars advertised as being in good condition were actually worth much less than that, and almost half of them were suspected to have the odometer rewound. We tried to negotiate the price for some but the sellers were always firm. We ended up buying one in a dealership with warranty within the same price and mileage range. Why are people selling cars on Craigslist for so much above the KBB prices, more than they're worth? Are sellers expecting to be negotiated for a lower price more aggressively?
EDIT:
After a bit more experience dealing with Craigslist people it learned that indeed sellers expect hard negotiation. However, when I sell there, I don't negotiate my prices and I also have success, albeit the sale takes a little longer.
(5)5 Comments
Sorted by latest first Latest Oldest Best
They're not being sold for those prices, they're being listed for those prices.
Are sellers expecting to be negotiated for a lower price more aggressively?
Yes. (generally)
Additionally, KBB and Edmunds can be a good pricing reference point, but they're not the bible or some sort of price sheet. Depending on the age of the car(s) you're looking at there may be an underlying loan. The seller may set the ask price as the entire amount due on their loan plus some amount to put down on their next car. Previously, I've found Carmax prices to be pretty reliable.
If you're not particularly picky about the car you end up with, start sending out offers and see who responds.
We tried to negotiate the price for some but the sellers were always firm. We ended buying one in a dealership with warranty within the same price and mileage range. Why people are selling cars in Craigslist for much above the kbb prices cars that are not even worth that?
Apparently they are able to get those prices. If they weren't, they'd compromise eventually. Look for older advertisements where people may be feeling more desperate. If you can't find them, then that means that the car is selling. They're right about the prices; Kelley Blue Book (KBB) is wrong.
It's interesting that the dealership hasn't caught up yet. If the used car market on Craigslist is robust, it should carry over eventually. I would expect dealership prices to be noticeably higher on average. The warranty if nothing else.
Perhaps Craigslist has too good a reputation. People are buying there even though they'd be better off with a dealer. Easy enough to fix. Go to a dealer and offer to sell cars for them (for commission). Advertise on Craigslist. Buyers should prefer warrantied cars over non-warrantied cars at the same price. With cars selling like hot cakes, the dealer will increase prices. KBB will adjust their numbers.
Auction wasn't a good option since we needed the car quickly and quality there varies and we don't really know how to deal in auctions.
I wouldn't recommend buying a car at auction unless you plan to buy a lot of cars. The quality is all over the place. You can get a great deal, but you are just as likely to get a lemon. If you buy a lot of cars, it will even out over time. But if you just need one, you can get royally screwed.
Auctions are designed for buyers who are constantly processing cars. If one is a lemon, they can make it up on the next one. The low prices at auction are a sort of reverse insurance. They charge less because they can't guarantee quality. So let the dealers buy at auction and fix up the cars with a warranty. Because they do it often, it works out in the long run for them. For an individual buying one car, I wouldn't recommend it. Too much risk with too few options for mitigation.
I realize this is just reinforcing what you already thought. I just don't want other people to start diving into auctions without understanding how they work. Yes, cars can be cheaper there. But the reason is that auctions sell anything, including cars that the seller is dumping because they are lemons. In bulk, the risk is manageable. Individually, it isn't. You may get lucky, or you may get a turkey that costs you more than it benefits you.
Cars, (and stuff in general), are worth whatever someone is willing to pay, not what an authority like KBB says they're worth. Likely, the Craigslist sellers in your area either have a warped sense of the value of the cars they're selling, or they've seen comparable vehicles sell for about that price so they're going for it. If they want to sell quickly, they'll lower the price. Otherwise, they'll hold out for what they feel the car is worth.
Anecdotally: I sold a 4 year old Mac laptop on Craigslist a few years back. I listed it for slightly above what people were selling them for on eBay, which was (in my opinion) already over-priced for what it was. I had 1 guy send me some rather irate and insulting emails about how much I wanted for a 4 year old laptop. I told him to find one listed for cheaper and I'd work with him. Never heard back and I ended up selling the laptop for my asking price.
As Pete B. so astutely pointed out - Demand drives prices.
I'm surprised it hasn't been mentioned, but there is an additional factor that inflates the prices on Craigslist beyond those advertised in local newspapers, magazines, etc.: It's free to advertise on Craigslist.
Not only does it involve no financial expenditure, the investment of time and effort required is also minimal. (Unlike, say, putting up printed fliers around town--which involves a great deal more effort, and a negligible paper and ink expense.)
As such, people who are not in a hurry to sell (or who may not need to sell at all) can think, "Why not? If someone buys it I've made a bunch of money. If no one buys it I'm no worse off than I am now."
The phenomena of people listing higher prices when they are not in a hurry to sell has been covered quite well in other answers, but I thought it was worth pointing out the low entry barriers to the Craiglist marketplace as a factor.
It's probably not the only reason but one aspect is probably that dealers get trade-ins for next to nothing.
When you go in and start talking with a dealer, one of the first questions they will ask is "Do you have a trade-in" so they can leave a buffer in the negotiated price of the car you are buying.
For instance, say a car has a sticker price of ,000. It might cost them ,000 and they might sell it for ,500 to a great negotiator (Yes, they sell it for under dealer cost--they get significant monetary bonuses each month for the number of cars they sell). Someone walking in off the street unprepared (but stubborn) will probably pay ,500
If you tell them they have a trade-in, they will try to get an idea of how much you want for it. Let's say you have ,000 in your head. They may target selling the car to you for ,000 and give you ,000 for your car making the actual sales price ,000. At this point they could negotiate a few hundred more off the price, take your trade-in and sell it to the junkyard for 0 and still make a good profit (Cheaper to junk that car than to do the mechanical touchups and have it take up lot space for months).
If you want to see what a used car is worth to a dealer, negotiate the best price first (This involves picking out the exact car you want, spending a couple weeks emailing a few dozen dealers and multiple contacts with the best few to get them to play off each other) getting to a price around ,500 in my example above and THEN tell them you have a used car. At this point you are unlikely to get anything at all for it. If you do get anything it will be a fraction of bluebook. You, on the other hand, spent less than you would have with the trade-in and still have a car you can sell on craigslist.
This is how dealers end up getting so many used cars to sell without feeling they have a lot of money invested in them... They have already made their money off the car and reselling the best used cars is just gravy.
Individuals who sell cars on craigslist have money invested in them and want to maximize their profit--if they don't have storage or money problems, the car can just sit there for months until sold.
Terms of Use Privacy policy Contact About Cancellation policy © freshhoot.com2025 All Rights reserved.