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Got a Quick Question for a Car Dealer?

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  • isellhondasisellhondas Issaquah WashingtonPosts: 17,353
    That will always determine what a commodity item sells for.

    I like the free car anology.

    What if we won a contest and Honda sent us a free Accord?

    Would we sell it for 1000.00 and be happy to have made 1000.00 or would we sell it for whatever the prevailing market was?
  • Since when did Price Guides take on the authority of the Holy Bible?

    Price Guides are simply that... GUIDES...they are not prices set in stone.

    Everything....EVERYTHING is negotiable in the car biz, for dealer and customer.

    My attitude about price guides?

    1. All used cars are different

    2. They put me in the correct $5,000 + or - grouping.
  • No, not at all. But if I can look at auction prices for a particular vehicle of a particular make/model, I, as a consumer, get a general idea of what the dealer paid for it. I can then take a GUESS (and yes, it's a guess) at what kind of offer a dealer might find attractive. Sure, there are cars that need reconditioning. But if I've got a ballpark idea of what a dealer would pay for a particular year/make/model, I might adjust my offer.

    You get a free Honda? No, a logical person is not going to believe you'll sell it for $1000 just because that would be "profit." But they *might* believe that if you got an offer for it today at $500 off the selling price on one you paid auction value for, you might just sell it because it represents an attractive profit AND a quick sale.

    Need help navigating? kirstie_h@edmunds.com - or send a private message by clicking on my name.

  • isellhondasisellhondas Issaquah WashingtonPosts: 17,353
    But the average person can't access auction results and even so, the auction numbers reflect average ranges.

    Then there are transportation charges, reconditioning etc...

    And, yeah, if we really were to recieve a free Honda, we just might make someone an extra special deal.

    I'm not holding my breath on that one! ;)
  • volvomaxvolvomax Posts: 5,274
    Since when did Price Guides take on the authority of the Holy Bible?

    Well, mainly because the people behind this website and others like it have conditioned the public to believe that the information here(and on these guides) IS gospel. ;)
  • Nah nah that's not what Edmunds says about its True Market Value pricing.

    Price guides don't kill people, people kill people :P

    But generally I'm with you dealer guys on this one. Why should a customer CARE what the dealer paid? The car, being used, is different than any other car, even one identical to it, down the block.

    So each car has to be regarded as speaking for itself.

    Look at it this way. If a car is exceptional, the dealer paid more to get it.

    I've been to dealer auctions and sometimes I even think dealers pay too much. But they "see" a profit in the car. Maybe they know something I don't. Or maybe they won't be in business in 2 years.

    Dealers make mistakes, too, and get buried in a car just like ordinary people. The recon is more than they planned.
  • volvomaxvolvomax Posts: 5,274


    I've been to dealer auctions and sometimes I even think dealers pay too much. But they "see" a profit in the car. Maybe they know something I don't. Or maybe they won't be in business in 2 years.

    Dealers make mistakes, too, and get buried in a car just like ordinary people. The recon is more than they planned.

    Yep. We've all paid too much for cars. We've all lost money on cars.
    U/C managers get fired every day because of this.
    It's nobody's business but our own.
  • tidestertidester Posts: 10,110
    What a merchant, ANY merchant pays for his product is none of anyone's business.

    Why? Just because you declare it to be so? What the merchant pays still looks to me to me to be one more thread in the fabric of the market and customers can use all the information they can get.

    Yes, the item for sale either is a good value to the buyer or not but knowing what the dealer paid will help to determine the true value. If I see that you're selling it for twice what you paid I'm definitely going to reassess my valuation of the car. :)

    tidester, host
    SUVs and Smart Shopper
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,353
    We disagree but that's fine too.

    I recently bought a new refrigerator for our garage and I couldn't care less what the store I bought it for paid for it and even if I did care, it's really none of my business.

    I really don't think cars are any different. But, that's me.
  • Any object that is bought or sold will have a kind of "bell curve" of points of sale.

    On one end, you'll have the outliers in the "bargain" department, where less than market price was paid; on the other end, outliers who paid way too much and who will be punished by the market.

    But that fat, sweet spot in the middle is the "real" market, so IMO what the dealer pays on one particular car is only a database of one, not enough for the consumer to establish the value of his car, or the car he is buying.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,353
    You are spot on.

    There are some cars that will "break the bank".

    A couple of years ago, we took in a 1993 EX Accord that was "still in the wrapper". It had, I think, 24,000 miles on it and it was as perfect as a car can get.

    The customer knew what he had and he demanded way over book for it which we gladly paid him.

    Because of age, we replaced the timing belt, water pump, seals etc. When we were done, we were in it over RETAIL book.

    Now, a customer using the various books would have never bought it but it sold quickly to a person who realized exactly what it was. He plans to drive it into the ground. He loves that body style as do many others.
  • tidestertidester Posts: 10,110
    If we all agreed on everything life would be pretty boring.

    I don't think comparing cars with refrigerators is valid. When I buy a refrigerator I'm buying it for the life of the product and will not trade it in or obtain any other compensation for it at the end of its life. When I buy a car I expect it to have some value down the road when I sell it. The minute I drive that car off the lot its value drops by at least the difference between what you paid for it and the price I just paid. I have a vested interest in knowing what that figure might be and it becomes an integral part of how I value that car.

    And, Shifty, it may not be a complete picture but it is certainly relevant. (See above.)

    tidester, host
    SUVs and Smart Shopper
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,353
    I have no problem with anyone who disagrees with me.

    I think it's just wonderful that people have no idea what we paid for a particular used car! Some are even brazen enough to ASK!

    And...are you saying my old refrigerator had no value?? :P
  • exb0exb0 Posts: 539
    i am pretty sure it was on one of these forums, someone posted a link to their cu, which has a link to the 'black book'.

    here is the link
  • mattandimattandi Posts: 588
    This is a case study in all the mess playing out all around. "Let's borrow our way out." :sick:

    Boyfriend/girlfriend situation. We start off less than solid.
    An ex-hubby who ain't all that much of an ex. There's still a house in the mix about to be foreclosed. Not looking much better.
    Buried in debt on 2 cars. $1300 a month outlay. whew
    Considering a Rougue, A3, or WRX. ummm, how about lowering the expectations a little.
    There is some positive cash flow. They are making extra payments. That's a positive, but I'm guessing there is no available pool of cash otherwise available.

    Sell the Supra. Get whatever it will bring.
    Use the proceeds to cover at least some of the negative on one of the other 2 cars. Borrow the difference from a relative, and then sell that car. My vote goes to the Audi. That girl needs to get out from under that. (she needs some serious financial counseling, maybe short sell the house, cut losses and start over) My guess is they will choose to dump the Malibu however.
    Plow everything extra into paying off the remaining car. The Malibu could be paid off in less than a year. Piling on the miles, it won't be worth much, but it sure beats paying interest on cars you don't even own anymore.
    Move on. Done right, his credit could be top tier by then, and hers could even show improvement.
    Buy a decent used, reliable car. Start saving the balance then available in the monthly budget.
    If the relationship survives, get married.
  • mattandimattandi Posts: 588
    And...are you saying my old refrigerator had no value??

    That depends. Does it come stocked with cold beer?
  • volvomaxvolvomax Posts: 5,274
    Yes, the item for sale either is a good value to the buyer or not but knowing what the dealer paid will help to determine the true value. If I see that you're selling it for twice what you paid I'm definitely going to reassess my valuation of the car.

    There is no one single "true" value. You have a wholesale value and a retail value.
    If I am lucky enough to trade for a car for less that I should, I am under no obligation to sell it for less than I should.
    If I overpay for the car, will you pay me more because of it?
    Of course not.

    My profit margin is nobody's business.
    Would you like everyone to know what you make?
    Of course not.
    Why? First of all, it's nobody's business. Second, people will treat you differently.
    I WISH you had to deal with what we have to deal with. You'd change your tune in a hurry.
  • greanpea68greanpea68 Posts: 1,996
    Why? Just because you declare it to be so? What the merchant pays still looks to me to me to be one more thread in the fabric of the market and customers can use all the information they can get.

    It doesn't matter what a dealer paid for a vehicle. All that matters is what the market call for a vehicle. Knowing exactlt what a dealer pays doesn't matter. With all respect and yes this started many moons ago. Web sites like Edmunds, KBB, and the rest of them make a living on providing information to the public on car buying..... The reason that started was because years ago car dealers "were taking " advantage of people..... Well now I almost want to say that these so called information sites are exploiting the car business.... These sites are makong money off dealerships by providing information. So now the tables are turned in favor of the public.... I am all for treating people right and building relationships.... I need that for my business to grow and "profit"..... But if every one wanted to pay what we owned the vehicles for how could a dealer ever make profit?

    Tidster or really anyone this isn't directed at Tid, just replying to a post.... When you go to the grocery store, the best buy, the hom depot, the sears???? Do you know what they pay for materials, shipping, labor? I don't. I look at the label and decide is I can afford it...

    OK Rant over

    GP
  • kyfdx@Edmundskyfdx@Edmunds Posts: 25,898
    ...then why do dealers say: "I've got more than that into it.. I can't take a loss."

    It's either about market value, or it's not..

    Most dealers are just like customers... What they pay for something, or what they owe on it, has an effect on the perceived value of that object..

    In fact, dealers are just like customers.. If it's the other guy's $100, then it's only a lousy $100... why won't they give it to me.. If it's your $100, then it means everything in the world...

    Oh yeah... Used refrigerators aren't worth diddly... :)

    Moderator - Prices Paid, Lease Questions, SUVs

  • duke23duke23 Posts: 488
    GP wrote :
    "It doesn't matter what a dealer paid for a vehicle. All that matters is what the market call for a vehicle. " That is irrefutable . Demand determines the price. Earlier this year some buyers were paying over msrp for the Genesis.
    While in general Chrysler products could be had for a song .Not knowing too much about music, I'd venture not even a very good song.
    While not disagreeing with Mr. T's premise per se, I'd add that even with KBB, TMV or any pricing engine, the pockets of profit at a dealership are so convoluted and inside, you'll never know what true cost is to a dealership, Unless you beat the GM with a rubber hose under a bare lightbulb. Even then chances are 50:50. Dont try, educate your self as much as possible and strike your best deal. Keep in mind salesmen have families too, try to stick it to the dealership when ever possible.
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