Here’s Why Buying a Used Car is So Expensive in the United States

Here’s Why Buying a Used Car is So Expensive in the United States


rev up your engines, today I’m gonna talk
about why use cars in the United States
are getting to be so expensive, now
recently I took a trip to England, and I
knew from research and emailing people
in England that used cars in England are
much cheaper than used cars in the
United States
years ago I used to have customers that
took advantage of that, they would go to
England they’d buy used cars cheap, send them
to the United States sell them at a big
profit, but they can’t really do that
anymore they changed the laws the EPA
for pollution control and stuff, but
people used to do that make a lot of
money, even though it costs a lot of
money to ship a car from England to the
United States, so I asked him used car
dealers in England, what’s the deal how
come yours is so much cheaper, and they
said well people are only gonna pay so
much money for a used car, and now when I
was a young mechanic in the 1960s that
was true in the United States too, but
then something happened in the 1960s
there was a company called Kelly’s Blue
Book that gave values of cars in the
United States, and back in the 60s it was
a pretty fair valuation, but later Kelly
Blue Book that makes the valuation of
cars got bought by autotrader.com, a big
used car dealing corporation, now let’s
just think logically, now do you want a
company that has a business of selling
used cars giving you the value of those
used cars,
it’s just patently absurd to think that
the value is going to be fair, of course
they’re gonna say cars are worth more
than they really are, because that’s how
they make money, and then later even auto
trader got bought by Cox enterprises,
which is another mega corporation that
has to do with buying and selling cars
amongst other things, so really you can’t
believe what these books are telling you
in evaluations anymore, and another of the
big guides NADAguides hey they’re now
owned by JD Powers & Associates and
that’s even more patently absurd, do you
want a giant PR advertising company
telling you the value of cars, I mean
come on it’s just absurd what has
happened in our society, that people are
believing what PR firms are telling you about stuff,
I
can’t help but laugh, when I see an
advertisement that says, JD Powers picked
this as truck of the year, I mean come on
now they’re a PR firm, why would you
believe anything they say about anything
and the fact that they advertise through
an advertising company, it makes it even
more patently absurd, but since they own
the NADAguide to car prices, they’re
the ones that are setting these book
value on used cars, it’s crazy but it’s
true,
now when I confronted these English
used-car guys with all this information
about the states, they laughed too and
they said, gee I wish we could get away
with charging those kinds of prices for
our used cars, we’d make a lot more money,
things have gotten even more absurd here
in the United States, you can go to many
use car dealerships in the United States
like Carmax, and they say they give
you the best price, well what do they
mean by that, well my son was recently
looking at a used Toyota at a Carmax
and he said, hey I like that Toyota but
that’s too high I want to pay less, to
which they just responded, no that’s the
best price if you want to pay less
we got another car over there you can
buy, but he said, hey no I want this one I
don’t want that one and they said no
that’s the price there’s no negotiating
on the price, so it certainly was the
best price, the best price for the people
selling the car not the people buying it,
now when I told this to these
English used-car salesmen, they said oh
Scotty you’re pull our leg, you know we
don’t believe you, your just making all this
stuff up, to which I responded no that’s
what they’re doing in a bunch of these
places, and they said oh wow you know
that’s part of buying a used car, but we
wish we could just say this car is ten
thousand pounds, but it doesn’t work that
way in England, so with the pricing in
these supposedly neutral books that give
values of cars, when somebody’s selling a
car these days, a lot of times they’ll
look at it and say, aha that’s what the
car is worth that’s what I’m gonna get
for my car when I sell it to somebody
but I explain to them, now a used-car lot
can get away with a lot of stuff, because
generally they’re loaning money to
somebody, somebody doesn’t come in and
pay ten thousand dollars for a used car,
they pay $199 a month, then I say to the
person selling their car,
well are you gonna take $199 a month
for your car, no I need the whole thing at
once
they don’t understand, if you pay the
whole thing at once, you’re gonna get a
better price then if you’re financing a
thing, the people our finances are taking
a chance, you might not pay, they might
have to repo the car, so the value is
actually much lower if you’re doing cash
and these stupid books just knock a
little bit down not much,
they’re just patently absurd, because in
the real world, the one I inhabit in,
here’s an example few years ago a
customer of mine bought a used Toyota for $3500
it was eight years old and it had a
hundred thousand miles on it, but another
customer of mine bought the same exact
year Toyota, but she had bad credit, so
she went to this used-car lot and even
though she bought the same year car and it
had fifty thousand more miles on it than
the previous customers had, she paid
ninety five hundred dollars for the same
exact car, so in the real world where I
live
cash means something, but a lot of these
places now they say, oh same price cash or
credit we don’t care, so not only do they
have an artificially high price of the
cars, they don’t care whether you pay
cash your credit because a lot of times
they get bonus points for selling a loan
to somebody, now the valuation itself is
much akin to let’s say a diamond ring,
take a diamond ring to a jeweler to have
it appraised for its value, and then
after it’s appraised, let’s say it’s
appraised for ten thousand dollars, ask
that same jeweler what will you pay me
cash for this diamond ring right now, and
your jaw is gonna drop, it’s supposed to
be the same way with cars, cash should be
king, I mean look at this beautiful car I
saw in England and look how cheap it was,
though I guess something of the English
cars being cheaper is because gas is so
expensive there, I mean it’s the
equivalent of seven dollars something
a gallon, that they got to spend all
their money on gasoline and not on the
car itself, but really here in the United
States, one of the biggest reasons that
used car prices are going so high, is
because of this ridiculous collusion
between the people who give the value of
the cars, and the fact that they’re owned
by corporations that have a lot to do
with selling used cars, but I found there
still is a real world out there, such as
things like Craigslist, where there’s a
bunch of cars for sale and their private
individual sell them, and get a good deal
because of somebody’s selling a car
there’s often a very good reason, they’re
financially strapped, they need money, or
they’re moving, and they have to take
money that they get right away
and if you want to compare this value,
just say take a car you’re thinking
about selling, take it to Carmax,
they buy cars too, see what a low price
they’ll give you for that car and then
see what they sell that same car for
once they buy it from you by looking at
comparables, and you’ll see that the
actual value of a car cash is a lot less
than what these stupid books are telling
you, so if you never want to miss
another one of my new car repair videos,
remember to ring that Bell!

100 Replies to “Here’s Why Buying a Used Car is So Expensive in the United States”

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  2. I've been hearing over and over from Scotty and Steve Lehto and others that you should never buy a used car from a dealer. You should always buy from a private party. That's nice, but out of curiosity, I looked for private car sales on the Internet, and they are virtually IMPOSSIBLE to find, especially if you have a particular car in mind. You are essentially STUCK buying from a dealer. So the reality does not match the recommendation.

  3. Scotty, you say that KBB is essentially worthless, but what other guideline is there for determining the worth of a used car? You can't go by what other people paid, because a lot of them overpaid. So what's the alternative?

  4. What you are saying reminds me the politicians that ask the lobbyist what to do or decide and they get to "rule" for the private lobbyist and against the people. Lobbyist are nothing by a disgrace even to have them and the amount of them have increase tremendously in the last years.

  5. LOL is crazy here in the UK for example i can buy a 4 year old used car with less than 30 thousand miles on the clock for $4000 if i bought the same said car in the USA the price would be near double that lol

  6. Also here in the UK we use diesel cars to save on Gas prices for example i can get 65 miles for my $7 gallon of fuel where as if i used a petrol car i would have to pay double that price.

  7. Scotty it's called the UK or Britain. Not so long ago, you could have put great Infront.
    England ceased to be a political entity in 1707 or 1603, depending whether your a republican or monarchist.
    NB fuel is much cheaper in N America than in the UK.

  8. Been in FL for 15 yrs. Five gr8 used cars for me and my kids. Craigslist works well. I simply ignore idiots who try to refer to Kelly re value.

  9. But I've also heard tons of horror stories buying cars from craigslist, so who the hell can you believe or trust???

  10. Scotty you're putting all these folks out of business LOL LOL thank you for your truth and honesty it's helped me so much!

  11. I'm in Australia and was hoping to buy a car in the US to store there for holidays rather than renting. I expected the USA would be cheaper than the Australian market but to my surprise it's significantly more expensive. The cars also have higher mileage and are actually harder to find. The dealers are also dodgy as hell, selling a lot of salvaged cars and concentrating on finance. Something is very wrong with the American market. Even new cars aren't great value desipite it being one of the biggest car markets in the world.

  12. Hey Scotty, you know what that Blue Book reminds me of … the little stupid book you mechanics use to figure how long it took you to fix something. Fixed in 15 minutes but the little book says it should take 90 minutes. The perfect book for you guys.

  13. The biggest reasons US cars either new or used are so expensive…..Auto workers unions driving up the cost of manufacturing new vehicles and Dealership greed driving up the cost of used vehicles.

  14. I got really lucky, and bought a custom made car that was leased by the previous owner and had all it’s work done at a Dodge Dealership in Tennessee. They went over their leasing miles and had the car for 1 year and 11 months. The car was sold at a private overflow auction by another Dodge dealership. The car was in pristine condition, and still had the factory warranty on it, and after they certified the vehicle and put all new part on it, I got a $50,000 car for under $39,000 with no issues! Also the previous owner had buyers remorse because the car was too fast, and the insurance was too high to pay, and car sucked gas! Oh well, one man’s headache, is another man’s toy!

  15. In the UK used cars are cheap for 2 reasons:
    1. No one in Europe wants right hand drive, so UK is very chermetic and not very big market.
    2. Car repairs cost fortune so often makes more sense to buy new car rather than worrying, that used one will break and repair will be more expensive than car itself. Not to mention how competent mechanics are here.

  16. a lot off buyers from europe buy crashed cars on auctions in usa online. They repair it and sell with good profit here in EU, becourse in the usa you can buy crashed car just couple years old very cheap.

  17. Buy a car or truck from a private seller.

    And bring Scotty with you. Well…if you can't bring Scotty with you, then buy a Toyota, the rest are money pits!

  18. Used cars in Indonesia are lot more expensive than murica, 5 y.o. Corolla still costs around $20k, and 1994 corolla for $6k.. Even more popular cars such as Honda civic 2010 could have $15k price tag..

  19. Yea but British pound its higher then a dollar plus I don’t think its cheap to bring a car from there

  20. Yeah, used car market here in the U.S is horrible!! I see cars with 100,000 miles plus for 10K or more! Ridiculous!

  21. Scotty, another reason for high used car prices, are the prices for new cars. The prices of new vehicles has went through the roof, so the demand for used cars has increased. So whether the we like the prices offered at used car dealerships or not, somebody out there needs the car, and will pay the price. And that right there is the validation for the price, the willingness to pay it. So, if we collectively had better options, the used car prices would drop overnight.

  22. Scotty, my man -Are you from New Hampshire originally?? I ask because of the "Live Free or Die" slogan over your garage door.

  23. So I'm looking to buy a used Toyota Camry 17 SE … and all the websites have the ones he listed even on Craigslist… Is there a reliable place to look for one?

  24. Another reason used cars in the U.S. are so expensive is because most cars sold in the U.S. market are used. The average American can no longer afford a brand new car(40k+ for a mid-level trim full-size pickup for example) so the market is flooded with used car buyers. High demand = high price.
    It was not always this way. Americans used to buy a lot of new cars in the past. For example, in 1965 you could buy a brand new V8 Ford Mustang for around $2,700. Adjusted for inflation, you'd be able to buy a V8 Mustang for only $19,900 in 2019, literally less than HALF of what Ford is currently selling a V8 Mustang for these days!
    So yeah, as long as they keep over-engineering and over-pricing new cars, expect used car prices to stay high for the foreseeable future. :/

  25. I always chuckle at car dealers’ “no uncomfortable negotiating”. I’m like, “uncomfortable for who?”, I’m perfectly comfortable negotiating a better price

  26. Another factor is the English drives on the right side and the rest of Europe drives on the left. This means most cars that don’t sell in England has nowhere to go while cars that don’t sell in the US gets ship off to other countries driving up prices.

  27. If you think cars are expensive in the US, wait till you come to Singapore. We are screwed over many more times as compared to you. Worst thing is that we can't really do anything about it as the government is at the top of the food chain.

  28. In San Diego, the prices for used cars (through Craig's List, etc.) is significantly higher than Kelly Blue Book.

  29. Id rather ride my bike to work then pay near dealer price, im atleast going to get it down 1000s of dollars before buying.

  30. The free Market decides what the value of used cars are,if prices are too high for used you might as well buy new,inflation will always happen also Government regulation and new tech alone will drive the prices higher

  31. In Romania we have a lot of British cars now on the roads. Most of them are off-road vehicles. I guess they are very cheap, transportation to Europe is not an issue, but driving them on the right side is. Legislation changed recently but all the cars registered before the change will stay. The off-roads they are mostly used in the mountain roads anyhow, where you worry about potholes, not traffic.

    I think one of the reason British cars are cheap is that they have a small market, most of Europe can't buy them because of legislation on the right/left side steering wheel.

  32. I don't understand what happened to America! When I visited the USA 30years ago things were so cheap. Not any more!

  33. It's worth what the market says and will bare. I need a pickup truck, no way can afford one, $20 grand for 150k miles. Absurd.

  34. UK cars are right hand drive.
    Thus low export value, and small market drives prices down.
    I often buy perfectly fine used cars for $400-500 but I think you can find them in the US too.
    If you drive around a little

  35. You can still get a good used car cheap. People are just afraid to haggle with dealerships. In winter 2017 I bought a 3-year-old Corolla for $10,000 even. And this wasn't the base model, this was the top of the line trim with almost every available option (except sunroof, which I specifically did NOT want).
    I wanted the car, they wanted the car off the lot. But I was willing to walk if they didn't get to the price I wanted. In the end I got the car at the price I wanted to pay.
    If you shop around on the internet and you're willing to drive a few hours to get to the best deal. But you have to be willing to walk away. Don't get emotionally invested in it. Don't think since you're financing it then a thousand dollars extra doesn't make a difference. They're betting on people being weak-minded and giving in. But if you set a hard line at a reasonable price, most of the time they will sell you the car at that price.
    Ultimately car dealerships want to move units, if they're inflating the price $500 or $1000 in the first place (which they almost certainly are) then you don't need to feel bad about negotiating that down. I can promise you they're not selling that car at a big loss.
    And now, if I wanted to sell that Corolla that I paid $10K for, I could easily get $8500-9000 on a private sale, and that's after putting another 20,000 miles and almost 3 years on it. Go to a decent, honest dealership with reasonable prices with $9K cash in my pocket. But I'll probably just drive the Corolla for the next 20 years.

  36. The Americans are well known around the world for being gullible and as such put up with used car prices whereas, we in England would not stand for it. If the used car price is too high we walk away & if enough people walk away the prices have to come down or the car lots would be full of unsold used cars 🙂

  37. A cousin was stationed in Germany (Cold War), he bought 2 identical BMW's and had them shipped home. He sold one back in the US and it paid for both.

  38. The mafia is car companies period. They have made us not a civilization but a civilization based on a" car civilization. "
    Don't beleive me, loose your car and see what happens to your life. You will become an invalid. Unless you work in an office where you can commute to by bike. That would be like what, 1 % of the people.

  39. Craig's list is full of car dealers pretending to be private sellers. They also mask car problems . One guy I bought from had put thick oil to mask a rod knock. First oil change the rod knock self destructed the motor. Beware, even when the car seems to run good car sellers are hiding stuff. I leased a new truck for work, a Ram pick up. It will be $21,000 to buy a $32000 dollar 4×4 truck. The lease is 350 per month for 3 years and then you decide if you want to buy it for $21000 at end of lease. Best decision I ever made. To many scammers for used cars unless you can fix the car yourself used cars make you loose work and money. PS , stay away from any german made newer car. Maybe you can buy used German up till 1990. Any thing newer is crap, they are scammers and greedy people…

  40. Couldn't really tell what type of car it was Scotty was showing, but keep in mind that is Pounds and not American dollars. Pounds is usually 3x more than the American dollar. So that is like an 8-9k car in American cash.

  41. I'm looking for a used car now and I'm finding that the sellers are asking more and, often, way more than the KBB price range.

  42. That is the reason why I now only buy NEW cars. I used to buy 5-to-6-year-old Toyota sedans for 1/3 of what they were new, but now those same cars are selling for 55% to 65% of what a new car cost, so it makes no sense to buy used when the prices are so inflated. 4-yr used Corolla = $15,000 used, brand new Corolla = $19,000. Might as well buy the new one instead.

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