WOBURN, Mass. — After looking at more than 20 million used
cars for sale over the past year at dealerships throughout the country and
weighing the prices of franchised dealers against those of independents, iSeeCars
suggests their respective deals aren't that different.

All told, the prices at what iSeeCars referred to as new-car
dealers (i.e. franchised lots) were only an average of 0.26 percent better than
their used-car dealer counterparts (i.e. independents), according to iSeeCars.

"The general perception is that used-car dealers offer
better prices than franchise dealers because used-car dealers have lower
overhead," said Phong Ly, chief executive officer and co-founder of iSeeCars.
"But statistically, that's not the case."

The Massachusetts-based company is a car-search engine
aiming to help shoppers find the best deal on used cars. In the explanation of
its methodology for this study, iSeeCars said it analyzed the
aforementioned 20 million-plus used vehicles, comparing average market prices
of equivalent cars sold by franchised and independent dealers.

"iSeeCars calculated the market price of a used car using a
proprietary algorithm that analyzes similar cars for sale — those with the same
year, make, model, trim, options, mileage, and other factors," the company
noted in its methodology. "To determine which dealer had better prices, the
company compared the list prices of the used cars with market prices."

Hence, iSeeCars came up with the slight 0.26-percent
difference. Given how this difference was an average, Ly explained to sister
publication Auto Remarketing, there were situations where new-car dealers were
offering better deals on used vehicles than used-car dealers, and vice versa.

"That average is the difference between the average savings
from used car dealers versus new car dealers — the average savings for a car is
calculated based on market prices that we estimated using a proprietary model,"
Ly said.

Interestingly enough, consumers were getting slightly better
deals (by 0.27 percent) on used cars 10 years old or newer at new-car
dealerships.  Conversely, independents
had modestly better deals (0.22 percent) on cars older than 10 years.

iSeeCars also provided Auto Remarketing some more details on
the collective market price of used vehicles at both franchised and independent
stores, along with a price breakdown by age and average mileage information, as
shown below:

New-Car Dealership
Average Price of Used Car: $18,653
Average Mileage: 56,622

Used-Car Dealership
Average Price of Used Car: $17,459
Average Mileage: 65,308

Average Price & Mileage for Car 10 Years Old or Newer
New-Car Dealership: $19,595/51,329 miles
Used-Car Dealership: $18,690/58,715 miles

Average Price & Mileage for Car Older Than 10 Years
New-Car Dealership: $6,232/126,453 miles
Used-Car Dealership: $6,490/124,054

Joe Overby can be reached at joverby@subprimenews.com. Continue the conversation with SubPrime Auto Finance News on LinkedIn and Twitter.


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