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Running the numbers: Used cars are pricey here

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Posted at 7:00 AM, Oct 10, 2015
and last updated 2015-10-10 07:00:27-04

CINCINNATI - The best way to save money while shopping for a used car in Cincinnati might be to leave Cincinnati for a dealership in Akron.

That was the surprising discovery of data crunchers at Autolist, a used-car aggregation site that tracks pricing on millions of vehicles nationwide. The San Francisco-based company found that used cars sold in southwest Ohio are more expensive than the state average. The price difference can reach more than $1,200 on the most popular vehicles, like Honda Accord.

Alex Klein

“The answer is to drive to Columbus or Cleveland. There’s no question about it,” said Alex Klein, vice president of data science at Autolist. “You can save hundreds of dollars just because of geographic differentials.”

Cincinnati car dealers aren’t buying it.

“I’m very skeptical,” said Walt Sweeney, whose Western Hills Ford dealership regularly compares pricing from “a lot of customers that are selling cars.”

Whether he’s buying at an auto auction or negotiating with a private seller, Sweeney goes to great lengths to make sure his buying and selling prices match those available in dealerships and on the Internet.

“Customers can buy cars from all over the country,” he said. “We price it accordingly.”

Autolist map of used care affordability in Ohio

Sweeney agrees that there are regional differences in new car demand. Pick up trucks are hard to keep in stock at a Texas dealership, he said, while Florida dealers see heavier demand for convertibles. But he belongs to a trade group with dealers from all over the country. He sees their profit and loss statements once a quarter.

“I’ve never heard of prices being off $1,200 from one part of the state to another,” he said.

In most cities, Klein said, dealer density tends to push prices down. But Cincinnati is unique among metropolitan areas in the Midwest in that it is spread across three states. That means differences in tax rates and other economic forces that other towns don’t have. And that gives Ohio car dealers a competitive advantage, whether they realize it or not.

“I don’t think all Cincinnati dealers are in cahoots, analyzing prices on some macro scale,” he said. “I just think they’re feeling more demand on the ground because of economic forces … then modifying prices accordingly.”

Autolist data comes from online sales tools like Edmunds.com and Cars.com. They also come from thousands of dealers nationwide.

“We take that data and run analytics on it,” Klein said. “As a result, we’re able to predict with incredible accuracy the expected price of a vehicle based on the year, make, model, mileage, trim, all that sort of stuff.”

EXPLORE: Autolist data on used care affordablity in 88 Ohio counties

Autolist’s bottom line: Used cars in Hamilton County are $245 more expensive than the state average. In Butler County, the price premium is $271. In Clermont, it’s $244 and in Warren County, $198. Compare that to the counties with lower prices than the state average, and you start to see a reason to take a long drive.

Defiance County, near Toledo, came out $564 below the state average in Autolist’s analysis. Summit County, or the city of Akron, was $539 below. The same car in Cleveland sells for $374 less, Columbus, $276.

EXPLORE: Autolist data on Honda Accord prices in 88 Ohio counties

And the differences are even bigger for popular cars like the Honda Accord. So, a three-hour drive to Bowling Green can yield a savings of $1,230. That’s the difference between Wood County’s average price, which is $791 below the state average, and Hamilton County’s price, $439 above.

“Our goal in publishing this is not to hate on dealers but to tell buyers: This is some information that’s interesting and useful,” Klein said. “It’s buyer intelligence.”