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Selling Used Cars in a City Could Be a Better Idea, Study Shows

Posted on: June 15th, 2012 by credit

The competition in the automotive industry is back to being fierce, and perhaps, even fiercer, as it recovers from the recent crisis. A manifestation of this can be observed in used car dealers in the cities who have been working so hard just to get their used car leads buy a car and meet their sales quota. However, there are several factors or reasons why selling used cars could sometimes be easier or more difficult to do. Dealers should be familiar with these factors; one of which is the dealership location.

According to a recent study, dealerships operating in metropolitan areas sell used cars at more competitive prices than those in rural areas. The study says that dealerships within the 50-mile radius from a city’s center sell used cars at an average of $345 off from the prices of used cars sold in suburban dealerships. The highest populated cities like California, New York, and Texas sell used cars more than $500 less than the prices in rural dealerships.

More population in a city means more dealerships; more dealerships means tighter competition, and the tighter the competition, the lower the prices predictably get. In effect, there could be more car shoppers wanting to buy used cars from the dealerships in the cities as they are practically cheaper.

When it comes to the prices of their used cars, dealers outside the cities should then consider, not just their local competitors, but also those that are in the metro. The truth is, people are now turning to the Internet when they shop for cars and it is more likely that people living in the suburbs could come across dealerships in the nearby cities and consider buying a car from one of them.

Although the study has yet to be looked at, it also implies that there could be more chances of finding used car leads in the cities as car shoppers would want to go there for the cheaper prices. To keep up with the competition, dealers outside the 50-mile radius do not have to sell used cars at cheap prices but simply be competitive. It does not also mean that used car dealers should not sell in rural areas. Dealers can still find market in these areas. One is because they can hold their prices as there is not much competition and another is they can be the only store selling the car model that a car shopper is looking for.

Therefore, used car dealers, especially those outside the cities, should all the more do the best they can to rise above the competition, which is fiercer in the cities. While being aware of the more fragmented attention that their target market has, dealers in suburban areas can still do more things to keep up with the competition.

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