Used car pricing: Why are cars sometimes advertised at two different prices?

Car buying advice
Used car pricing is not always as it seems (The Car Expert)

James, from north London, has asked a very good question about used car pricing practices at dealerships. So good, in fact, that it has become the topic of our latest #AskTCE article.

James was looking at a used car advertised online for £12,995 and decided to visit the dealership to look at the car.  But when he arrived…  “I discovered that the car was priced at £14,995.  When I questioned the salesman, I was told that the higher price was correct and I must have been mistaken.  Upon further questioning, the sales executive went off into the manager’s office, and when he came back he said that it had been a mistake and had now been corrected.  Am I entitled to try and hold them to the lower price?”

It is not unusual for used car dealers to advertise the same car at different prices on different websites, or to have a higher price on the car window and a lower price advertised on the web.   There are usually two reasons for this: 1) if a customer hasn’t seen the lower price advertised elsewhere, the dealer can try and sell the car at the higher price; or 2) the dealer can claim that the car has ‘already been reduced’, to try make the car look like a better deal.  This strategy is used to stop a customer haggling for a lower price.

I have dealt with many dubious used car pricing practices, and plenty of used car dealers are very slippery at handling the question of “Isn’t this car advertised for less on the internet?”  Usually, the dealer will ‘suddenly remember’ that it has ‘only just been reduced this morning’ or make up some nonsense about ‘web-only offers’, or mutter something about how they ‘haven’t had enough time to update the price in the car window’.  It doesn’t really matter what the excuse is – they are simply trying it on, and then trying to cover it up when they realise I actually know what I’m talking about.

Used car pricing – anything goes

The reality is that there is no recommended retail price for a used car – a seller, whether private or dealer, is entitled to ask whatever price they like for their car.  It’s simple capitalism, with supply and demand determining the price.

The Car Expert advises buyers on how to stay on top of dubious used car pricing practicesAlthough it’s not illegal for a dealer to advertise the same car at two (or more) different prices, it’s not exactly an example of outstanding business ethics if their used car pricing is handled like this as a matter of course.

James’ situation is a step more serious, as he claims that the dealer refused to sell him the car at the advertised price.  We are no longer talking about a dealer omitting to mention that a car is advertised and available for a cheaper price, but actually refusing to honour their own advertised pricing.  These days, this sort of behaviour is thankfully becoming rare.  Most dealers advertise their cars on websites like Auto Trader or Exchange and Mart, and can easily alter their used car pricing in seconds.  In the past, an error in an old-style newspaper or magazine ad couldn’t be changed once it had been printed (assuming that it is a genuine error, rather than simply a dubious selling technique).

In this sort of situation, you need to have proof of the lower advertised price.  With online ads, it is easy for you to look up the advertised price on your smartphone in seconds, but a dealer can also change their advertised price just as quickly, so always print out the advertisement before you visit the dealership.  If you hold your ground, and if you start mentioning phrases like ‘false advertising’ and ‘breach of trading standards’, dealers will generally concede fairly quickly.  But is this the sort of dealer you want to be buying your car from?

Used car pricing – are you getting the best deal?

How does used car pricing work? - The Car Expert answers your questionsIn the world of used car pricing, a dealer sets a car’s price based on what they hope to get and by what similar cars are being advertised for.  A salesman is not obliged to offer you a lower price, just as a customer is not obliged to pay a higher asking price.  It comes down to who wants the deal more and is prepared to concede more ground, or who is better at negotiating a deal.

Do you have a suggestion for a future #AskTCE article?  Fill in the form in the sidebar, and we’ll try to get a piece written up to address your issue.

Stuart Masson

Stuart is the Editor of The Car Expert, which he founded in 2011, and our new sister site The Van Expert. Originally from Australia, Stuart has had a passion for cars and the car industry for over thirty years. He spent a decade in automotive retail, and now works tirelessly to help car buyers by providing independent and impartial advice.

17 Comments

  1. I have just put down a deposit on a car & am just waiting for the finance to come through.
    I’ve since seen it advertised on their website (the exact same car) for almost £1, 000 less.
    What can I do as they sold to me at a much higher price!
    Thanks

    Reply
    • stuart

      Hi Alex,

      If you have signed a contract for the vehicle at the higher price, the dealer is not obliged to reduce it. It is not particularly ethical, but it is not illegal.

      Print out the advertisement and take it into them, and you can try and demand that they honour their advertised price, but your position is not as strong since you have already agreed to buy the car at the higher price. You can threaten to cancel, but you may have trouble getting your deposit back from the dealer if you do so.

  2. i visited a dealer to look at a second hand car and decided to go ahead with the deal i was asked to pay £200 to take it off of sale this was on sunday .on the tuesday i visited the web site and found the car was still advertised but £1500 cheaper than the price i agreed to pay for it.
    i have not signed a contract yet how do i stand

    Reply
    • Stuart Masson

      Hi Charles. I’d get a friend to call up and ask about the car, including the price. The correct response from the dealer should be “The car has been sold but is still awaiting final payment and paperwork”. The dealer is entitled to have another buyer waiting in the wings if a sale falls over, so there’s no great issue in keeping the ad live. A sale is not concluded until you have paid for the car and all the docs are signed by everyone. The reduction in price is interesting, though.

      If the response to your friend’s call is that the car is still for sale and available at the lower price, you should be on the phone immediately to demand the same price or a refund of your deposit.

  3. Hi guys, I bought a car for higher price than the Internet price(same car). After when when I checked in online it’s lower price. I paid the advance of 1000 dollars. And I’m paying 500 dollars more. Internet price is 5500 and at yard it is 6999. Please suggest me. I care about those 500 dollars as I’m a student now. Thank you

    Reply
    • Stuart Masson

      Hi Siva. I don’t what the law is where you live (this is a UK site), but in the UK you would have no right to force the dealer to lower their price. You signed the contract at the higher price without checking the price first, so you are bound to it.

  4. Hi.
    I saw a cheap car online to get for my wife as a first car. The price was £995. I went to the dealers to see it and sure enough, the price in the window of the car was £995. When I asked one of the salesman for a test drive he told me the his boss has put the price up to £1,395.

    Is this allowed?

    Thanks
    Col

    Reply
    • Stuart Masson

      Hi Colin. If that’s what they have advertised both in the advertisement and in the car window, you should be able to hold them to it. However, it’s a good indication that the dealer is not exactly trustworthy, and you may be better off walking away and finding another car elsewhere.

  5. Hi Stuart. I think I will take your good advice and look elsewhere! Thanks for your response.

    Reply
  6. Hi

    I’ve been looking for a small automatic to replace my wife’s mini. Last Tuesday we found a Kia Picanto in our local dealer with a screen price of £7999. We took a test drive and were impressed but wanted to check out other local cars to see what was on offer. Went back yesterday evening to check it was still available and took some pictures of the car, still available at the same price. Went back this morning to check out the trim and hopefully do a deal. Screen price was still £7999. following the salesman’s valuation of our mini he advised us that the car was priced at £9489 due to a mistake and that it had never been advertised at the lower price but conceded that it was on the forecourt for several days at the lower price. As a gesture of goodwill they would let me have the car for £9000. They would not sell me the car at the lower forecourt price. Can they do this? Does this not breach trading standards in some way? Thanks – Martin

    Reply
    • Stuart Masson

      Hi Martin. Basically they sound thoroughly dodgy and you should stay away. You can go through the hassle of reporting them to Trading Standards because they have car priced on their premises at £7,999 but are refusing to sell it at that price, and it would be a good thing for you to do as otherwise this sort of behaviour will continue. Nothing is likely to come of it, as the dealer will come up with some excuse and carry on regardless.

      But you don’t want to be buying your car from these people. If this is an example of their ethics, can you imagine how difficult they will be to deal with if you have any problems with the car?

  7. Hi quick question, I have been reading lots on here and it’s great for the consumer. I have seen brand new 66 plate car for sale on the lookers web site, used online chat asked question like is this the same for finance and for cash with part ex. The lookers rep said yes it is the list price is the same for both.Went to the dealership and salesman nearly fell through the floor and point blank said no cars available at that price.so my question is this isn’t it against the law to false advertise. I have the web page with offer on saved.

    Reply
    • Stuart Masson

      Hi Angelpie. You are correct that Lookers cannot advertise cars at a given price if they are not selling them for the advertised price. It may be a simple error or mix-up (it does happen), and Lookers would certainly try to explain it that way regardless.

      I would contact the online chat team or phone number if they have one and ask them which of their dealers have that car for that price. They may even be able to make you an appointment.

  8. Hi Stuart. Thanks for the reply. I did that and went to the dealership after online chat and was assured price was correct. Spoke with salesman told him about the online offer, he actually got the offer up on his computer and then went white with shock when he read it. Should I pursue it

    Reply
    • Stuart Masson

      Of course you can. It shouldn’t bother the salesman at all – he’ll still get his commission if he sells the car, regardless of whatever discount the manufacturer and Lookers are offering. If he doesn’t want to, I’m sure there will be another salesman in the very same building who will.

  9. hi there can a garage once you are interested put admin and vat and charge for using debit card because they dont like you paying cash in my case they added £200 to the windscreen price can they do that

    Reply
    • Stuart Masson

      Hi John. Legally, they probably can. However, £200 seems ridiculously steep for a debit card fee unless you are buying a very expensive car. My understanding is that they can choose to pass on the cost of any fee they have to pay to the bank because you’re using a debit card, but there’s no way that would be £200.

      If it is a clear written policy of the dealership, there’s nothing wrong with charging an admin fee. But it seems poor form if they are not charging finance customers the admin fee. It sounds like they are trying to recoup the finance commission they are missing out on…

      Any fees from the dealer are completely negotiable anyway, since they are just made-up numbers. They are simply trying it on, and hoping you’ll agree to pay it.

What are your thoughts? Let us know below.

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