[3-cheese-sundae]

I think that's an oversimplification. The market rates for wholesale, private sale, and retail are different. Selling a vehicle to a private party always nets the seller more cash than selling the same to a dealer. As a private buyer, you would have a very difficult time trying to buy a vehicle direct from most manufacturers.

As another said, this is due to lobbying, but that doesn't change the fact that the markets are different.

[_yb2s]

Fair point for new cars, I neglected to state I was only talking about buying used cars. Personally, I buy used cars because the amount of depreciation makes them an incredibly good deal, it seems to be an irrational cultural thing. I find it amusing that I get comments like "I didn't know you were so rich" for driving an old Porsche Boxster I got for $8k on Craigslist... always stored indoors and looks like new- and has been as reliable as a new car in 4 years of commuting. A new low end economy car at 3x the price is way too expensive for me.

Most individuals selling a used car, especially wealthier ones, aren't too interested in getting the most money from it, but just want it gone to move on with their lives. Not so with dealers, if they can't get you to pay a huge margin over what they bought it for (a price you could also buy one for) they'll wait for another buyer.

I'm not fundamentally opposed to buying used cars from a dealer, but when I've researched fair market prices, I've usually not been able to talk them down to anywhere close to them... whereas I've had many times where private sellers took an incredibly low ball offer I wasn't really expecting them to take.