What Are the Differences Between Wholesale and Retail Prices on Used Cars?

A used car’s wholesale price is the amount the dealership paid for the car, while its retail price is the price the dealer is asking for the car. A used car’s wholesale price is similar to a new car’s invoice price, and both are the absolute lowest value most dealers accept for a car. Accepting a wholesale price from a buyer is very unlikely however, as dealers make no money on these sales.

Retail price is usually the most visible price for a used vehicle. This is the figure that dealers advertise and print onto a used car’s information sticker. Generally speaking, retail price is the maximum price a buyer can expect to pay for the vehicle. Like many other types of vehicle prices, the retail price is somewhat negotiable, and buyers can talk the dealership down to a lower price.

Wholesale price is distinct from a vehicle’s trade-in value. While the trade-in price is also what a dealer pays for a vehicle, trade-in prices are typically less than what dealers pay for used cars from wholesalers. Dealers use the Kelley Blue Book and other industry references to get a basic estimate of a car’s trade-in value, but actual trade-in prices often diverge from those found in a reference. For example, dealers may pay lower trade-in prices for vehicles in poor condition, while they may pay higher prices for in-demand vehicles or during promotions.