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.
Although 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?
In 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.
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