Published April 26, 2013
If you knew what a used car dealer paid for a car that you’re interested in, wouldn’t that give you a tactical advantage when negotiating a deal?
Of course it would.
Now one self-described used car dealer, who goes by the nom-de-guerre of Dennis Miller, is letting consumers in on the big secret.
Miller and his colleagues have launched a new app called SnafuScan that gives prospective buyers information they say has never before been available to the general public, and could help them win the battle of the bargain.
“This is an app that gives you the prices that dealers pay for cars at dealers’ auctions,” Miller, founder and CEO of SnafuScan.com tells FoxNews.com. “The auction price is much lower than the Kelly Blue Book price, which reports on the prices of cars as sold to the public. Consumers have been very much keyed in to the Kelly Blue Book for years.”
According to Miller, most of the used cars at dealerships are bought at special dealer-only auctions closed to the general public, not directly from consumers, and the prices paid can be $5,000-$10,000 less than what’s on the window when you kick the tires.
Miller is not giving this information away for altruistic reasons. He is, after all, still a used car dealer, and wants to sell you his app for $9.99 for a 30-day subscription.
As a spiff to get customers in the digital door, he’s offering a free version of the app that allows users to get all the details on safety recalls for a particular car. The information will enable consumers to check the VIN number of a vehicle and find out if there is any outstanding work that needs to be done.
“We’re hoping to get the word out about recalls, and generate attention to our site as a resource for automotive information,” says Miller. “If millions of people use this as a recall scanner for their current cars, when they want to buy a new car, they will know about us, and can spend the $9.99 to get more detailed information about other cars.”
The free application idea came to Miller first, inspiring him and his investors to take the product to a higher level of design and functionality.
“When we buy a used car at an auction, we always look up recall information, so the cars can be upgraded, for free,” says Miller. “Some are benign, some are serious, like a faulty gas pedal or airbags. We want to prep the car and get rid of it as soon as possible.”
Most used cars, he explains, are bought by the dealer on credit, and it could cost them $200 or more every month the car sits on the lot, so they want to move the metal quickly.
The pricing info provided by SnafuScan will come in most handy for consumers if the car has been on the lot for more than 30 days, when the dealer’s profit margin really starts narrowing and he’s ready to deal.
Working with computer software developers in Russia and the Ukraine, Miller has come up with an algorithm that takes the last five years of transaction data from used car auctions, crunches the numbers, and comes up with the probable price the dealer paid for a particular used car, “within a few hundred dollars over, or under.”
Miller says that less reputable used car dealers in the past have gone as far as forging receipts from auctions to show to prospective buyers, claiming that their margin of profit on the car was less than it actually was.
“Let’s say we buy a vehicle for $6,500,” Miller says. “The industry has made up receipts that look like auction receipts, but which say the car cost $10,200 at auction. Meantime, Kelly Blue Booksays the car is worth $12,000. So you can see there is a lot of room for negotiation there.”
But what do Miller’s colleagues think about his turncoat move?
When contacted by FoxNews.com, the National Independent Automobile Dealers Association, which represents many of the nation’s used car dealers, had no comment.