Used car dealers work with a very simple formula for making their money. They generally operate by keeping a pre-determined percentage over the estimated wholesale market value for a given car, which depends on the make and model, its year of manufacture or present age, mileage done and its present overall condition.

In determining the final selling price based on the above factors, the seller will take into consideration how much he paid for its possession which could have been from an auction, from a wholesale or a private seller, by trading for another vehicle or even as a direct import; plus any handling charges, haulage or transport and costs incurred on repairs and re-conditioning to bring it to the present standard and finish for re-sale.

From the above, it should be clear to you what you are paying for when you purchase a used or re-conditioned vehicle not forgetting the lucrative mark up the dealer also keeps. If you are a pragmatic buyer and a bargain hunter, you can try to eliminate all the third party charges involved by making a direct purchase from one of the original sources already stated above, instead of going through a franchise dealer.

You should be able to handle the purchasing part of it by carefully scrutinizing all the newspaper and television ads and doing some internet searches to purchase one from the most favorable source. If you are not very familiar with checking the engine and body condition of a vehicle, you may get the assistance of a friend or a known person or even a hired technician once you have narrowed down your final choice to a few cars.

You may also do likewise for affecting any repairs or reconditioning considered necessary to make it a final finish. This way, you can easily earn the dealer’s percentage for yourself, now that you know how a dealer does it.