The speaker advises against buying a used car from a dealership due to several reasons. Firstly, dealerships charge too much money for their vehicles, often selling them for 2-4 times what they paid for. Additionally, dealerships may add hidden fees and extras, such as extended warranties, which may not be worth the cost. The speaker also questions the reliability of services like CARFAX, citing personal experiences where the report did not accurately reflect the car's history.
Furthermore, dealerships may sell "certified pre-owned" cars that are not thoroughly inspected, and may have existing problems. The speaker also warns against buying extended warranties, which may not cover as much as expected and can be expensive.
In contrast, buying a used car from a private individual can be a better option. Private sellers may not know as much about cars and may be more willing to sell at a lower price. The speaker shares personal anecdotes of buying used cars from private individuals at significantly lower prices than what dealerships were asking.
Ultimately, the speaker advises against trying to negotiate with dealerships, as they are professionals who know how to make a profit. Instead, buyers should consider purchasing from private individuals or doing their research to avoid getting taken advantage of.
Here are the key facts extracted from the text:
1. Used car dealers often charge high prices for their vehicles.
2. Dealers' commissions are typically a percentage of the sale price, so higher prices mean more money for them.
3. Used car lots often sell cars for two to four times what they paid for them.
4. Professional car salespeople are skilled at getting the highest price possible for a car.
5. When buying from a private individual, people are often in a hurry to sell and may be more willing to negotiate.
6. Used car lots often have backend extras that they don't disclose until it's too late.
7. These extras can include fees, taxes, titles, and licenses, which can add up to hundreds or thousands of dollars.
8. Some used car lots will add $900 to $1,000 in extra fees, including registration and dealer prep costs.
9. CARFAX reports are not always reliable and may not show a car's full history.
10. In one case, a CARFAX report did not show that a car had been totaled three times.
11. Consumer Reports found that over 55% of people who bought extended warranty policies never used them.
12. The average cost of an extended warranty policy is $1,300.
13. Extended warranty policies often have exclusions that allow the warranty company to deny claims.
14. Certified pre-owned cars may not always be thoroughly inspected or certified by a third party.
15. In one case, a certified pre-owned car was found to be two quarts low on oil and had significant engine damage.
16. When buying from a private individual, it's possible to get a good deal on a used car.
17. Dealerships often pay 30-50% of the selling price for a used car, which they then resell at a higher price.
18. It's possible to find good deals on used cars from private individuals who are not knowledgeable about cars.
19. Some people make a living buying used cars from individuals and reselling them at a higher price.
20. Buying a used car from a private individual can save you money compared to buying from a dealership.
21. Car auctions can be risky, especially for non-professionals, as it's possible to end up with a lemon.