Last edited Fri Sep 7, 2018, 06:14 PM - Edit history (2)
1) Autotrader is NOT a Seller of used cars. They are not a dealer. They are basically an information platform. They hold no inventory and have no stake in the sale of the cars advertised on their website. If anything, they are a broker, in that they join buyers and sellers, and their commission is the fee they charge to advertise. He claimed that they intentionally inflate car prices because "that's how they make money". Wrong. He goes on to point out that Autotrader was bought by Cox, but failed to mention the obvious connection;
Manheim Auto Auctions, one of the two major used car 'dealer only' auction companies in this country.
2) The car values in the NADA and Blue Book guides come from these automobile auctions held around the country, NOT from some figure Autotrader pulls out of its corporate ass. That STILL does not mean those publications set the prices they print, because "open outcry" auctions are by definition, the most honest way of determining the market value of an item. The people that bid on the cars set the price, not the auction company or the publisher of the guides.
3)
J.D. Power and Associates is a Marketing Research firm, NOT a public relations firm. The two business lines may intersect, but calling JD Power a "PR Firm" is disingenuous.
4) His comparison with diamonds is patently "ABZURD" for any number of reasons, but mostly that the secondary market on automobiles is not largely controlled, and the inventory intentionally restricted by one company (De Beers).
He is right about buying with cash, but the fact is, the overwhelming majority of people looking to buy a car do NOT have the thousands of dollars on hand in order to do so and as a result they need to finance.
If all car transactions were in cash, from dealerships to buying one from a guy out of his driveway, then sure, car prices would be lower. But that's not reality. Also, prices would be cheaper if people stopped paying what they are paying now. If sales dropped through the floor, prices would fall. Simple law of supply and demand.
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