Unless you’re brand spankin’ new to the experience of buying of car, you’re probably more familiar than you’d like to be with the physical and emotional calisthenics associated with going to the dealership to make your purchase. Even for the individuals who have earned their stripes haggling with car salespeople over the years, the dealership experience still often feels daunting, as seemingly no amount of negotiating tips you’ve received from family and friends can adequately prepare you for the verbal slight of hand that occurs when dealing with a car salesman.
The subversion and double-talk is one of the most unsavory aspects of going to your local dealership to buy a car, but it actually extends much further than some people may realize. When it comes to a dealer’s pricing of a vehicle, it’s important to know that you’ll more often than not pay an amount that is much higher than the invoice price (e.g. what the dealer pays for the car from the manufacturer) of the car. The amount you pay is called the retail price. The difference between the invoice price and retail price is the markup or “negotiating pad,” which is often comprised of repair and reconditioning costs and arbitrary items that are aimed at covering the dealership’s greater profit objectives.
Examples of the wild disparity between the invoice price of a vehicle and its final retail price can be staggering. According to one U.S. News & World Report article, “typically, there’s 6 to 8 percent markup,” on vehicles purchased from the dealership, which actually isn’t too bad when compared to individuals who claim that some vehicles have been marked up by as much as 45 percent! At the end of the day, people who are in the market to buy a vehicle just want to know they’re paying an honest price for a quality car without worrying if they’re getting ripped off.
Unlike the vast majority of brick and mortar dealerships out there, Carvana prides itself on transparency and offering you a fair and honorable price for the vehicle you have your eye on. By not having a physical location and the overhead costs associated with maintaining and manning the dealership, our cost structure for you means we don’t have to play markup games to meet our margins or a specific quota. In fact, in 2016, Carvana customers saved an average of $1,430 compared to the Kelley Blue Book® Suggested Retail Value when they purchased a vehicle from Carvana.
With Carvana, the worry and stress typically associated with car buying is a thing of the past, as the price you see is the price you get, minus the inclusion of mysterious markups and nefarious “negotiating pads” that leave you wondering if there’s a newer, better way to buy a car.
