Traditional car dealerships incur fixed costs to operate their businesses, such as physical buildings, lots, cars and sales staff. To cover those costs, dealers aim for a gross margin of 30% on used cars. In other words, when you sell or buy a used car from a traditional dealership, there is typically a difference of 30% between the price the dealer paid for the car and the price at which they sell the car.
At Tred, we don’t own physical buildings, lots, cars or sales staff – our customers buy directly from the last owner, and sell directly to the next owner. To cover our costs, we charge sellers a 5% fee at sale, and we offer buyers optional finance and insurance products such as extended warranties. Therefore, if you’re buying through Tred, you’ll get a lower price than you would from the dealership, and if you’re selling through Tred, you’ll get a higher price than you would from the dealership.