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How to save money on a used car with 'carbitrage' shopping

Shopping around is usually a good way to find the best deal on a used car. But how far afield should you go?
/ Source: TODAY
By Jonathan Welsh

Shopping around is usually a good way to find the best deal on a used car. But how far afield should you go?

A new study suggests that by exploring dealerships in distant cities and even crossing state lines, consumers can save on sticker prices or get higher prices when trading in their current vehicles. Car-shopping website CarGurus released a study that shows how much used-car prices can vary depending on the dealer’s location.

family buying a car
A new study shows that "carbitrage" may be a good way to save money when it comes to buying and selling used cars.Shutterstock

Researchers used data from millions of used-car listings across the U.S. to spot metropolitan areas where shoppers could save by extending their searches to other cities or choosing to sell their old vehicles in one region and buy their next in a different area. CarGurus calls this tactic “carbitrage.”

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The survey found many cases in which stretching one’s car-search zone resulted in savings. Someone shopping for a 2013 Ford F-150 pickup truck in Chattanooga, Tennessee, could save about 4 percent by looking in the Atlanta area, for example. The average price for the vehicle in Atlanta is about $23,500, or about $1,000 less than in Chattanooga, the study said.

The most expensive city according to CarGurus is Fresno, California, while Miami is the most affordable. The study found that prices for comparable vehicles in Fresno are, on average, 21 percent higher than in Miami.

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Below are CarGurus’ lists of the top-10 most affordable and most expensive cities for buying a used car.

Top 10 Most Affordable Cities to Buy a Used Car

  1. Miami, Florida
  2. Cleveland, Ohio
  3. Akron, Ohio
  4. Stamford, Connecticut
  5. New York, New York
  6. Detroit, Michigan
  7. Toledo, Ohio
  8. Boston, Massachusetts
  9. Providence, Rhode Island
  10. Worcester, Massachusetts

Top 10 Most Expensive Cities to Buy a Used Car

  1. Fresno, California
  2. Albuquerque, New Mexico
  3. Reno, Nevada
  4. Portland, Oregon
  5. Bakersfield, California
  6. El Paso, Texas
  7. Little Rock, Arkansas
  8. Seattle, Washington
  9. Wichita, Kansas
  10. Jackson, Missouri

View the full breakdown here.