The Mechanics

Source: https://www.youtube.com/watch?v=eucnb7Qf08U

For the most part, almost all new car dealerships will pay the same price for a particular make and model new car. Theoretically the invoice price of the car is determined by all of the materials used to build the car as well as any optional features that have been put into the car. Now the reason that I say theoretically is because the car manufacturer also charges the dealership for actually putting the car together, obviously. The problem arises from the fact that manufacturers can set whatever price they want for the service of building the car. 

While all new car dealerships pay the same invoice price for new cars and trucks, they don't all pay the same to have new cars and trucks delivered to the local dealership. 

Shipping costs for new cars and trucks can vary considerably depending on the type of vehicle being shipped and the distance that delivery trucks must travel to bring new cars and trucks to your local new car dealership.

Generally speaking, you will find that new cars may be a little cheaper in areas that are very close to the manufacturing plant of the vehicle, while on the other hand they may be a little more expensive in areas that are hundreds or thousands of miles away from the manufacturer. This is based largely in part on the amount of money that it cost to ship a vehicle from one point to another. However, the differences in price caused by shipping costs are usually not so much that it will warrant purchasing your new car truck from a far-off location—as you will have to pay shipping costs as well. Even if you don't, driving a car long-distance will require some investment in time as well as fuel.

You Have to Walk Before You... Drive?

Source: http://www.scionoforlando.com/research/2014/2014-scion-fr-s-and-subaru-brz.htm

What Prices a New Car?
Before I can find the truth about how used cars are priced I had to first find out why new cars are priced the way that they are because that is one of the biggest factors on what the car will be worth later. However this wasn't an extremely hard task seeing as my dad owns a car dealership. So I asked him what determines the prices for new cars. For the first little bit of time he just listed off a bunch of different parts of the car, the exhaust system, the interior, ect. That was pretty common sense to me but then he said something that caught my attention. He told me that where the car is made is a big factor in what the car was priced at. He told me that a two of the exact same car, one made in the US and one made in China could priced $100s differently.

Example:
Take the Subaru BRZ and the Scion FRS for example. Those two cars were co-engineered by Toyota (Owns Scion) and Subaru. Exactly the the same car. Down ever exact detail those two cars' body frames (The actual frame of the car) are exactly the same. However these two cars cost different amount of money. So if you want the reliability of a Subaru, the price of a Scion, and the look of a sports car the FRS is the perfect car for you.

The Assembly Line

http://www.drivearabia.com

• Briefly explain why you are interested in studying your topic:  

I am interested in this subject because I am very into cars and my family owns a used car dealership so I am curious as to how my dad actually makes money off of selling the cars.

• The overall question I plan on answering by the end of the project:

John S: What determines the difference in price at which cars are bought & sold?

• Sub questions I will need to answer in order to answer the overall question:

What makes prices at the auction so much lower than everywhere else? What determines when new car dealerships sell cars in the auction and what determines the price for the cars that they sell? What determines the prices for the cars on used car lots?

• My plan of research (what specific Library Databases, specific websites, names of authors, people, etc. will I pursue to find the answers to the questions above):

I plans on going onto the library databases and I am going to see if I can find any articles related to any one of my sub-topics and then I am planning on asking my dad how he determines the prices for his cars.

Kelly Blue Book:

http://www.kbb.com/

Edmunds:

http://www.edmunds.com/

Manheim Auction:

https://www.manheim.com/

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