Before launching Evenlevel.com I did a decent amount of research on price differences between wholesale and retail markets. On average, I found MMR to be about $4,000 less than the average listed retail price on Autotrader.com. That was a pretty big difference, and the price difference showed me we had a good market opportunity.
The price difference occurred because of friction in the marketplace, friction that existed because of legislation. Legislation isn’t the only source of friction in the used car market.
Geography and distance also create pricing disparities. If the retail used car market were efficient used car prices would differ only by an average cost of shipping. Instead median car prices can vary by thousands of dollars. Given how much consumers focus on price as a primary selling point, why do price differences persist?
I have a couple thoughts but I am curious to hear what others think, let me know.