The reason I'm asking is because I am looking at used cars versus a new car purchase, and I'm wondering how much I might get raked over the coals for.
Knowing what a car buys and sells for at wholesale and trying to figure out how the dealer makes their money is irrelevant to you.
I've given you the best advice there is right now. You are overpaying and there is no way to avoid it, unless you have a trade. Then the dealer will overpay for your trade and you'll overpay for their car.
When the marker goes back to normal, new and used prices, and trade values, will all drop.
A friend went to an east coast dealer and was told they wanted sticker price, plus the usual "dealer add-ons" plus a "market adjustment charge" of $3500 on top of list. Everything is marked up.
According to a dealer employee I drink with, dealers usually send trades to auction if there is anything wrong that isn't an easy fix, so cars there are often ones traded in and rejected by dealers. After the big companies scoop up the nicer, nicer cars, the small "gas station" car lots try to get things they can fix up cheaply enough that they can make a profit selling them with "buy here, pay here" interest charges helping them make their money.
Best bet: buy from an individual. First question "Are you a licensed dealer"? If not, get the story on the car. Look for something like bought for kid in HS, well maintained, got kid new car for college, selling the first car. Look for service records beyond just oil change places. It should check into a real shop on occasion for deeper inspections. Know the neighborhood. Don't buy from poor people who keep their cars until they can't afford the upkeep any longer. Gluck!
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