Used Car Dealers Are Ripping You Off

The average wholesale price of used cars fell 2 percent between September and October, down a full 10.3 percent from a year ago, industry experts say.

While that might sound like good news for people who are in the market for a used car, it isn’t. Although dealers are paying less for used vehicles, the average price they’re charging consumers has climbed 7.2 percent since last year, the Department of Labor’s consumer price index reveals.

Dealers are making even more of a killing on luxury cars and SUVs. The price index reveals the average price for SUVs is down 12.3 percent, while wholesale luxury vehicles are down 13.5 percent. “Dealers don’t have to pass it on,” says ex-Federal Reserve banker Claudia Sahm. “They can make bigger profits.”

Why are used car dealers traditionally seen as shady?