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Got a Quick Question for a Car Dealer?

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  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,287
    Could I have your professional opinions on this question posed in our Answers department, or your reactions, or advice or whatever?

    http://answers.edmunds.com/question-How-negative-equity-dealer-take-30628.aspx

    thank you!

    Shifty, Visiting Host

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  • madmanmoomadmanmoo Posts: 2,039
    Nice job. That guy just got blasted with information to chew on, lol. Did he tell you how much he owed on each, Shifty?

    Edit: Never mind. I just reread his question and saw it in there. Ya, he's murdered in those trades.
  • This past weekend, my daughter tried to purchase a new car and when she asked what her used 2007 TSX was worth, the dealer showed her "Black Book" pricing that was about $1,500.00 lower than Edmunds. What is this Black Book? and
    is it another way of trying to rip people off?
    Thanks :confuse:
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,287
    He's so far down in the Audi...good grief!

    Would a dealer even make a deal like this, blending two negative equity trade-ins, into a new car. That would work out to something like carrying over $15,000 debt and adding it to a $30,000 new car loan, for a $45K total?

    Do dealers actually work deals like this?

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  • boomchekboomchek Vancouver, BC, CanadaPosts: 5,108
    We'll work it as long as the bank approves, the customer says yes, and we make some money.

    2007 BMW 328i Sports Pkg, 1993 Honda Accord EXR (my 33rd car).

  • isellhondasisellhondas Issaquah WashingtonPosts: 17,781
    You gave him good advise. These people are hopelessly buried beyond belief.

    And a 2001 Audi? Just wait until this troubleprone car starts killing them in repair bills.

    Oh and a house about to foreclose?

    Nevermind what I was about to say!
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,287
    I checked in with you guys to see if I was reading it all straight. It sounded very foolish to me but of course I don't want to depress the poor people. But I didn't see any hope. I can't imagine what that new car loan would look like. Seems like it would be brutal.

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  • About 6 months ago if they're credit was over 700, a bank would buy this deal. If his credit is in the mid 6's and hers is even worse, there's no way a bank will approve this loan. Banks are really tightening up now with advances, especially with mid-low level credit applicants. My advice, if they have gap....set them BOTH on fire! Juuuuuust kidding! The Dow just dropped over 700 pts, things are gonna be hell in the lending world for a bit.
  • boomchekboomchek Vancouver, BC, CanadaPosts: 5,108
    I noticed that our lenders are more stringent nowadays both on prime and sub prime deals.

    Everyone is looking to minimize their losses.

    2007 BMW 328i Sports Pkg, 1993 Honda Accord EXR (my 33rd car).

  • isellhondasisellhondas Issaquah WashingtonPosts: 17,781
    For making a lot of those loans in the first place!
  • dtownfbdtownfb Posts: 2,915
    One of the experts will give you an answer regarding the Black Book.

    You may want to visit the "Real World Trade-In Values" to get a true trade-in value. Provide the information at the bottom of the page.

    http://townhall-talk.edmunds.com/WebX/.ee9c851/36257
  • Black Book is a guide dealers use to purchase vehicles at auction. It’s a local, up to date average of what vehicles have been selling at auctions for. It’s not a way to rip someone off but a dependable way at confirming the market. If the dealer can get the same vehicle at auction for $1,500 less than they have to justify why he would purchase it for and extra $1,500 on the street.
    ghautogroup
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,287
    They use the black book to buy from you and the blue book to sell to you ;)

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  • isellhondasisellhondas Issaquah WashingtonPosts: 17,781
    I've never seen a black book.

    They use these back east I guess.
  • volvomaxvolvomax Posts: 5,274
    Difference between Black Book and Edmunds is that Black Book uses auction values and Edmunds is for lack of a better term fictitious most of the time.

    Black Book is mostly used back east, but it is becoming more prevalent in the west.
    In fact, I heard that some lenders will want to tie loans to Black Book value instead of Kelly or NADA.
  • In fact, I heard that some lenders will want to tie loans to Black Book value instead of Kelly or NADA

    You're exactly right, a few lenders have switched to using Black Book only. They say its the most accurate way of determining value because its updated a lot more frequently and uses "real world" values per region.
  • boomchekboomchek Vancouver, BC, CanadaPosts: 5,108
    We use "Canadian Black Book". It's updated weekly or biweekly, because there are dates printed on them.

    2007 BMW 328i Sports Pkg, 1993 Honda Accord EXR (my 33rd car).

  • "...Edmunds is for a lack of a better term fictitous..."

    If Edmunds is fictitious then KBB and NADA values must be outright lies as they are usually a lot higher.

    So what's a consumer to do, just trust that the car salesman is looking out for your best interest and take his word on values? I'm serious, there must be some better way to tell if you are being clubbed.

    Otherwise salespeople think the consumer is being a grinder and the consumer thinks the salespeople are trying to cheat him. :sick:

    2009 PT Cruiser, 2008 Eclipse, 1995 Mark VIII, 1988 GMC Van

  • Well a consumer can use several of the books you mentioned as a guide to get the value in the ballpark. That should give them an idea, but they need to keep in mind vehicles are only worth what someone else is willing to pay....the same goes for what WE charge for our new/used ones.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,781
    That the various "books" can't keep up with.

    Auction results reflect what dealers are actually paying for cars and even then we can miss.

    If it says that 2003 Ford Explorers are going through the block at 6000-6500 and we pay that much for one as a trade in and still have it sitting here three months later after spending 1000.00 in recon, we have missed, big time.
  • volvomaxvolvomax Posts: 5,274
    The 2 most accurate sources are the Manheim Auction Report and the Black Book.
    Neither of which is available to the consumer.
    Problem is, there is no way to definitively state used car value.
    A trade is only worth what someone is willing to pay for it at a given time.
    Even using Manheim and Black Book a dealer can still overpay for a trade or used car. Happens all the time.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,781
    Yes, it does happen.

    We want to make a sale so we take a deep breath and pay more for the trade than we really want to.

    As an example, I'll tell a story about a Volvo I took in a couple of years ago.

    No offense to my friend Volvomax, but Volvos can be quirky and this one was no exception. It was an S-80 and it looked and seemed to run fine. Miles were about average as I recall and it was a bad color. The couple trading it in waved reams of printouts in our faces and threatened to walk out. We couldn't get ahold of the Volvo store for a buy bid. We made the sale.

    Well, this lovely Volvo needed brakes, rotors and a lot of other expensive items. The airbag light AND the ABS light decided to light up a couple of days after we took it in.

    We sent it to the local Volvo dealer and we ended up with a bill over 3000.00 for make everything right.

    After about a month, it had to constantly be jump started. Oops, the battery and alternator both needed to be replaced and NOTHING is inexpensive to replace on a Volvo.

    The color turned off any potential buyers so three months later we took it to the auction and lost thousands of dollars.
  • volvomaxvolvomax Posts: 5,274
    Sometimes it's better to let people walk.
    Esp today w/ the U/C market in such turmoil.
  • Why can't the consumer have access to the Black Book as we
    do with NADA, Kelly, Edmunds? How do we determine the value
    of the vehicle that we own and what to sell to a friend ? I f we use
    anything other than the Black Book, then we really don't know a true/honest asking price.
    Just curious ;)
  • boomchekboomchek Vancouver, BC, CanadaPosts: 5,108
    How do we determine the value of the vehicle that we own and what to sell to a friend

    c'mon stickyman. ;) Would you really sell your car to anyone for thousands less than what you wanted for it just because a (insert color here) book told you that's what it's worth?

    2007 BMW 328i Sports Pkg, 1993 Honda Accord EXR (my 33rd car).

  • madmanmoomadmanmoo Posts: 2,039
    Great question. Why wouldn't that be available? Noone is ever happy with their trade-in value anyhow, lol.
  • jipsterjipster Posts: 5,345
    The color turned off any potential buyers so three months later we took it to the auction and lost thousands of dollars.

    You should have taken it to be painted at "Earl Schieb". I think they still have that $99 special. Could have saved you guys some big $$$.
  • Isn't that the way it is done in China using "Mao" Little Red Book ;) I guess with what is going on with Wall Street, we can't expect too many honest answers any more, Huh?? :confuse:
  • volvomaxvolvomax Posts: 5,274
    Great question. Why wouldn't that be available? Noone is ever happy with their trade-in value anyhow, lol.

    You have to have a subscription.
    Not something that someone who buys a car every 4-5 yrs is gonna pay for.
  • boomchekboomchek Vancouver, BC, CanadaPosts: 5,108
    I wasn't happy with my trade in value I got from our own wholsalers when buying car from work recently, but after looking at the big picture I was actually elated to let my car go. :D

    2007 BMW 328i Sports Pkg, 1993 Honda Accord EXR (my 33rd car).

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