Any Questions for a Car Dealer?

bigdveedubgirl

along the same line of customers asking build date...sort of...

Customer walks on the lot during the launch of VW Touareg, Looks at the price and and starts YELLING about a VW being $52000.00 and asks where it was Built...and I said "Slovakia" and he said "For 52000.00 I might as well buy a Mercedes ML which is a real German car" (MLs made in Alabama) *Deliverance banjos in the backround*

dino001

I can almost see that scene ... LOL.

By the way, you guys must be really depressed these days: with all those VW sales going down the toilet, not to mention seemingly misguided corporate pricing and optioning policy and long delays (like still no new Golf :surprise: ), it must be horrible. Is anybody telling those guys that they can literally be a next Peugeot/Fiat in US, if thing carry on this way? I would hate to see it, but Passat for 40K and Jetta to 30K both with those hideous chrome noses - Yikes...

british_rover

He doesn't want to buy a 2005 cause, "As soon as I take it off the lot I am gonna lose way too much money." I am trying to explain to him that I have 5,000 to 6,000 dollars worth of room on a 2005 and I have no room on a 2006. In additon the 2006 car that he wants does not even exist yet since we could not order 5 passenger LR3's till today. He would not get a car untill Feb. or March and he would be paying 6,000 to 7,000 dollars more for it since there are price increases on the 2006 cars.

I have the exact car he wants on the lot right now in a 2005 model and he could pick it up by the end of the week if he wanted to.

bigdveedubgirl

not really, and its not because of the prozac......

I work for Audi now so you know I am EXTREMELY Busy. But serious, very excited about Q7 and RS4.

Left VW right before the launch of new product. Jetta GLI with DSG is SHWEET!!!

oldsven

Perhaps someone out there knows if the experience I had yesterday is normal. I'm looking at a Focus ZX5. The salesguy says the "real" price is the heavily advetised simple plan price + $100 and that all dealers charge it. Is this true or the dealers version of additional markup? He also claims it costs more to order a car from the factory or locate one from a different dealer. I can maybe see the different dealer part to cover transport, although this used to be done as a service. But why would it cost more for them to order the car with the options I want than a car with the options they want on their lot.
Thanks for any help.

lmm

Specifically, does Dodge reimburse their dealers for this cost or is this a true cost to the buyer?

bobst

Sven, the car you order does not cost too much.

However, the car sitting on their lot will cost less because the dealer has an incentive to sell the thing and get it off their lot.

mikefm58

" However, the car sitting on their lot will cost less because the dealer has an incentive to sell the thing and get it off their lot. "

Logically, that sounds like the way things go. But I've had better luck getting a vehicle right off the truck. Remember, the longer a vehicle sits on the lot, the more interest that accumulates, adding more cost to the vehicle.

But I do agree with you that the dealer "should" have more incentive to move the vehicle that's been sitting there awhile.

steine13

The first new car we bought was a cheapo Nissan pickup... it'd been sitting at the dealership for just over a year.

The deal was sweet, so we bought it despite some misgivings I had -- rust in the cylinders from condensation? Horrors! -- and drove it for 60k trouble-free miles. In fact, I know where it is today, over 8 years later, and it looks fine and gets driven.

So while I'd always take the fresh car over the lot queen, it's probably not a big deal.

-Mathias

bobst

A friend of mine bought a car that had been sitting on the lot for about a year. They even had to put in a new battery. I think it was a 1989 Oldsmobile Cutlass or something like that.

After several years and about 340K miles, he gave it to a relative. I guess he got his money's worth.

british_rover

Have any of you ever told someone who is buying a car, new or used, and has this fictional trade value from KBB or some other site that you will accept that trade value if they buy the car for what KBB says it is worth?

I have had some many people over the past week, much higher then normal, with just stupid trade values. For example 5,500 dollars for a 1999 Amigo with 142,000 miles on it. It is really only worth 2,000 dollars with all the money in the world. If it had half the miles it might be worth 4,000 but never 5,500. We were willing to sell the car he wanted for 23,500 and KBB says it is worth 27,000 or so. Next time something like that happens I am going to go that route. You can't have it both ways by taking the super high internet trade in value and not take the same super high internet retail price of the new car.

bdr127

Have any of you ever told someone who is buying a car, new or used, and has this fictional trade value from KBB or some other site that you will accept that trade value if they buy the car for what KBB says it is worth?

Tell the guy to go have KBB cut him a check for the $5500.

british_rover

Yeah I have done that people don't find it very funny.

bmw3434

I have went as far to (to an especially rude customer) pick up my phone and ask "What's the number?" Him: "To what?" Me: "To kbb.com."
Like you said british rover, he didn't find it very funny.

dino001

Well, I guess it is funny, when the guy who is about to lose (or say not to get) is not you.

raybear

I use KBB all the time, just make sure the customer knows it's in fair to poor condition, not excellent.

bdr127

It's a tough thing, though, because every customer treats KBB as gospel... and always rate their cars in "Excellent" condition.

If you look at the same car on KBB, Edmunds, Black Book, Manheim auctions, etc, you'll get a few thousand dollar spread. So what number do you put on the car? It's not as easy to appraise a car as most customers think...

bmw3434

Don't get me wrong, I will use kbb.com but I will also say it is just an estimate. And yes, everybody's car is in excellent condition, even though on that "excellent" page it says less than 5% of all cars fall in that category.
You make a good point about the differences in kbb, edmunds, etc. I've seen up to 4-5K in differences between them.

british_rover

We use Galves which is seems to be normaly kind of on the low side but since it is acutally a pure wholesale number it kind of makes since. We retain very few of the vehicles we take in trade at our particular dealership since we only sell used Lexus and Land Rovers and then only low mileage ones. We need to use a pure or nearly pure wholesale number since 80-90% of the trades we take are going to auction. A few of the trades may go to another dealership in our auto group but not many.

dino001

I had a few interesting conversations in dealerships about rating the condition when I was considering a purchase last year. What strikes me, they see this one-year old car with virtually no wear and insist on putting "good", not "excellent" (tires are not new and there is one scratch at the front bumper). Than I ask what would it take to rate it excellent and it would actually be a new car condition :confuse: .

I always thought those condition ratings should be relative to other vehicles its age and mileage (as those two adjustments are made in the "base" valuation), not to a new car. Take the expected wear and you get "fair plus". Get more wear and you run into "fair", much more and you get "poor", get less and you get "good", significantly less and you get "excellent". "Good" 10-year old car would probably be rated "poor" if it were one year old.

mirth

Than I ask what would it take to rate it excellent and it would actually be a new car condition

According to Terry, you would have to have something like an '06 Porsche 911 with less than 1000 miles and no wear and tear at all to be considered "excellent". So under that system, "good" is not so bad.

Don't think of it as a rating of your car, think of it as gimmicking the KBB/Edmunds/etc. system to get a realistic price (i.e. the auction price). Most times, the dealer is just going send it to the auction so that'll be the highest they'll pay for your trade. Simple.

rroyce10

... **We use Galves which is seems to be normally kind of on the low side .... **

You must be from the far NE area of the country ... Boston and up ....?



Terry.

raybear

Galves is based in New Jersey, isn't it? We use it here in CT also. There are a lot of cars we've done that were $1000+ over Galves when they were traded in.

british_rover

About 30 min west of hartford.

rroyce10

....... The Galves book is used primarily in the NE area .. Maine/CT/MA/RI, New Hampsha, some upper NY area ... I'm sure you can find a dealer in the far corner area of PA and some Naw Jersee types ........

You can always tell a rookie from that area at the "big" Manheim .. they flip thru those pages so fast you would think a hurricane was coming .. then they get that "dead mullet look" on their face when the figures don't add up ..l.o.l....



Terry :P

guss

then they get that "dead mullet look" on their face when the figures don't add up ..l.o.l....


Terry, Does that mean that the Galves number is higher or lower than the actual auction number? Or does it go both ways ?

I have had dealers in PA use the Galves book and it always seemed low.

rroyce10

.... Generally -- lower than true market ...

Terry.

robr2

Sometimes you have to dig a hole to get the number Galves is spitting out.

So how come dealers use KBB to retail those same used cars??

dino001

So how come dealers use KBB to retail those same used cars??

Because they can?

qbrozen

I've only ever been to one dealer here in Jersey that DIDN'T rely on Galves (and I've been to ALOT of dealers!)

And, I gotta be honest, Terry, when I've checked their number vs yours on my cars, they are usually dead on. Of course, that's just a few examples of mine vs thousands of examples you've witnessed, so take it for what its worth. I guess i'm just defending them a wee bit.

bigdveedubgirl

I explain early in the trade appraisle stage how we come up with our values, We look at black book, auction data, area wholesalers, edmunds, and kelly based on the condition of the car. I let them know up front when they have there 20 pages of trade data all rated at excellent, that no car can be rated excellent because every car regardless if you can eat on the floor needs some kind of reconditioning, including but not to exclude, a detail, safety inspection ect..... If worded properly people understand and usually do not balk at our numbers (or at the very least don't yell "how the hell did you come up with that???")

But there is always those few that think they should get retail for their Oldsmobile Alero.........

dino001

that no car can be rated excellent because every car regardless if you can eat on the floor needs some kind of reconditioning, including but not to exclude, a detail, safety inspection ect

Oh, Come on! I understand there is profit to be made and market sets prices at whatever they are, but those book values already include those adjustments. One may argue whether or not they really reflect the market, but that's entirely different discussion. Write a letter to the editor or change the book (if Terry says "ask KBB for a check", I can say "write a letter to an editor").

Trade in is the price of vehicle BEFORE thorough inspection can be made and as such already accounts for usual market risk factors plus expected wear for a given year (I think). If the vehicle is passed to an auction, it does not require any deeper inspection beforehand, as somebody else is assuming the risk (therefore they get better price on it). If it is to be sold in house, it gets inspected and reconditioned, but then it also gets a new appraisal on RETAIL level that includes both costs of those actions and profit margin.

Telling people that "no vehicle can be rated excellent" is plain BS. It is basically double dipping: first dip is in value reduction due to both market risk premium and expected wear, second time by unfairly downgrading the condition evaluation without real merrit. As much as I think anyone is entitled to make any offer they like (as one needs not to accept any offer extended), your justification for it is shaky to say the least.

jipster

What % of cars sold at auction are from dealerships? Anyone
have a % breakdown? (i.e dealerships, repo's etc)

Also, if the vast majority of cars sold at auction are cars that the dealership can't sell(that no one wants)why purchase large quantities? Are most auction buyers owners of small car lots. Are auction buyers privy to data such as what dealership a car came from...as well as how long it sat on the lot...maintenance?

There is a large auction lot open to the public in Clarksville, IN. Good idea or bad for someone with no auction experience? Thanks.

qbrozen

My inexperienced guess is that this public auction would be more expensive than a dealer auction. Obviously, folks like you are there and just looking to pay under retail prices. You MAY do better than walking onto a lot ... you MAY not. Biggest downside = you can't test drive at the auction.

As far as actually going there and surviving ... probably a personal thing. But I've been to estate auctions (not the same, i know, but still an auction), and it was quite confusing at first, but now that we've been to a dozen or so, we're pretty good at it (we were pretty good after about 3 and got to know auctioneers names and they got to know us and know what might interest us). So, if you were to try, I suggest not jumping in the fray right away. Just observing for a while can do wonders.

bigdveedubgirl

First of all, I would like to excuse my use of absolutes, I should have not said "NO Vehicle can be rated as excellent" that was wrong of me and if I have a customer sitting in front of me the verbage varies based on the situation.

As quoted in Edmunds regarding excellent condition:
Vehicle is in exceptional mechanical, exterior and interior condition with no visible wear; it requires no reconditioning. Paint will have a glossy appearance. Vehicle has no mechanical and/or cosmetic problems and has a clean engine compartment. Exterior and interior are free of any damage. Tires are in nearly new condition. Vehicle has a clean title and has the ability to pass an emissions inspection.

It is very rare that a 4 year old 65,000 mile car has a clean engine compartment and has absolutely no cosmetic issues. It is Most likely that the car needs some kind of reconditioning.

And who said by this process I was undervaluing a clients trade in? Did I say anything in my post, that we use these methods to de-value, or "steal" a trade?If you have studied the used car market in different regions, you would know in many situations Edmunds and all the books do not mean squat! We are very agressive and very fair in our trade numbers, we are an small store with a very educated customer, and we do all we can to give a customer a trade amount that is reflective of the market that is the highest amount possible. Many times our trade #s are higher than edmunds or KBB such on VW TDIs or Honda Civics. The bottom line is to do everything we can to make the customer happy,and I believe that the customer should be part of the process and understand we are not throwing these numbers out of a hat, at the same time many customers need a reality check.

dino001

Don't get me wrong, I understand all the factors, including "owner's attachment factor". Most of us would consistently overvalue their trade worth at least for bargaining reasons, if not emotional. I didn't mean to say that you are stealing the trades, especially as you mentioned, you seem to be doing quite extensive research before making an offer.

Condition of the vehicle seems to be one of those areas subject to wide interpretation and both sides will of course try to make the one which is "convenient" to them. Even when staying reasonable, there may be some disagreements. Customers, like me, would rather to see a "peer comparison", i.e. rating against vehicles same age and mileage, whereas dealers would rather use "brand new" standard for comparison.

It all still boils down to the customer making their own evaluation and honest assessment how much is really reasonable then making the case to the buyer/dealer. If they don't, they may expect either big reality shock or "steal attempt" with no real tools to counter it, other than of course walking away from that dream Hyundai Accent

bdr127

This is how KBB classifies "Excellent" condition:

"Excellent" condition means that the vehicle looks new, is in excellent mechanical condition and needs no reconditioning. This vehicle has never had any paint or body work and is free of rust. The vehicle has a clean Title History and will pass a smog and safety inspection. The engine compartment is clean, with no fluid leaks and is free of any wear or visible defects. The vehicle also has complete and verifiable service records. Less than 5% of all used vehicles fall into this category.

dino: Regardless of what you want Edmunds/KBB's conditions to be based on, they tell you straight out what they mean... Their rating of "Excellent" reads the same way whether they are showing a 1990 or 2005 car. If they're making the rules, then we all just have to follow them the same way...

moosee

bad idea, stay away you can get caught up in it and get creamed. New car dealers go to the auction every week. there is usually a gm auction tuesday, ford wed, chrysler thursday. than imports in between and lease lending banks termed cars in between,

dino001

I see - I'm not going to contest excellent rating, since it is hard to get. I think the difference between good and fair is probably much harder to swallow for many, esp. when the odometer reads some 40-50K, or more.

We all see what we want to see until somebody else forces us to see it different. Then we of course want to shoot the messenger...

psorter

Just wondering, I have been looking at 15K - 20K used car and the difference betweeen the blue book trade in value vs the retail value is about 6K, seems like thats alot more then they would make on a new car, but what do I know.

One car I just looked at had a sticker of $19999, and I looked up the blue book and it was $12000 trade in, I got him down to 18K but it was sold before I decided to buy it (didn't like the idea of losing $6K driving off the lot).

Even my local independent dealer has the same markups, $12.5K list price for a 2001 Maxima, $7500 blue book trade in.

So are dealers actually making gross profits of 6K for these used cars, or are they paying more then I think they are for these cars? (are the blue books out of whack) I assume most get them at auctions, what prices do dealers pay at auctions? Close to trade in value, more, less?????

thanks for any comments! just curious!!

dino001

Well, they recondition, inspect, and prep those cars. You noticed they do look cleaner than those that are traded in, didn't you? The recon is usually a bit more than sending it to a nearest car wash. Newer cars get sometimes certified, which costs extra money. Then there is cost associated with keeping the car on the lot - each day it spends there, it costs the dealer money in say financing, utilities, etc. Also, KBB values are "asking" prices rather than actual transaction prices, as you know people bargain a lot with used cars (and there is no real expectation of paying what's on the window). And so forth.

So their actual profit is usually less than said $6-8K spread shown on books, but yes, it is widely known fact that used cars are actually more profitable business than new cars that often are sold with $500 or less actual profit, except perhaps "premium" brands. I am acutally curious myself what is the average actual profit on a used car after all the costs and and bargaining is done.

If you ask why then bother with new car business at all, my best guess would be: revenue from authorized service, and probably some aspects of generating "good" traffic and name recognition (Joe's Chevy always sounds better than Joe's Used Cars).

rroyce10

... **I am acutally curious myself what is the average actual profit on a used car after all the costs and and bargaining is done...**

Net net net ......... $1,5/$1,800 depending on the store and the product.

Terry.

gallileo

I think the key is "Free from any visible wear."

If I look at the brake pedal, and I can see any wear, it's not in excellent condition.

If I look at the belts on the engine, and I can see any wear, it's not in excellent condition. That means to get the excellent rating, all wear parts must have been replaced in the last couple of hundred miles.

All belts, all brake rotors and pads, the pedals on the floor. Can I detect even the slightest rubbing on the steering wheel? Not in excellent condition. The fluids have to be brand new.

Can I tell that someone has used the seats? Not excellent condition.

Absence of any visible wear is a nearly impossible condition to attain if the car has been driven at all.

KBB says that "less than 5% of cars fall into this category." But every one seems to think it is theirs.

ereinhard

I am looking at buying a 1987 Blazer with only 53,000 miles. The dealer is asking $2000 over retail market value (asking $4500, retail is $2500 for Excellent condition). My guess is that they are raising the price becuase it has a new transmission and new exhaust. But in reality, that should just bring the car back to retail value. There is a warranty (not sure if it's a dealer 30-day deal, or the warranty on the new parts). Is this a justified price difference?
Thanks

psorter

I think most people define wear different then you, wear indicates damage, minimal damage, but damage non-the-less, dusty belts, seats that have been sat it causing the fabric to crease, dirty break pedals etc is not visible wear (just like a new car that has been rained on, or been driven 5 miles doesn't make it used). I have seen timing belts that have no visible damage after 70,000 miles.

gallileo

I'm not talking dirty. I'm talking worn. If a brake pedal has been pushed more than a couple of times, then the rubber has started to wear. It's easy to see on very old cars, the brake pedal looks like the sole of an old shoe. But this type of wear starts very early.

Say a car has been driven 20K, then the brake pedal has probably been pushed 1,000 times. There will be wear there, not just dirt. There will be wear on the steering wheel too, assuming that it wasn't wrapped.

Dirty fluids are worn by definition.

rroyce10

.... **Telling people that "no vehicle can be rated excellent" is plain BS ....**

Really ....?

Has the vehicle been in the garage most of the time.? .. is it a non-smoker.? has the vehicle been detailed every 3/4 months by a pro with a high speed buffer..? .. does the interior show and glow like a vehicle that has 3/4,000 miles..?? .. has the oil and filter been out of it every 3,500 miles.? .. has all the service been done before the stated dates ...? .. have the tires been rotated and balanced every 4/5,000 miles..? ..... do you go out every weekend and wash and wipe the exterior, then clean the mats and wipe the seats ....? .. does the vehicle "show" pride of ownership ....?

.. No.? -- Thats why there is no excellent ..........



Terry.

akangl

No.? -- Thats why there is no excellent

You mean I gotta clean the sawdust and garbage out of it more than once a year??? I even have to WASH it?? Wow, glad Terry isn't appraising one of my vehicles.......YIKES!!!

jipster

As you can see from the current thread. Being rated in "excellent" condition is next to impossible for a vehicle older than a year or two ...much less a 1987 model.

Asking price is just that...what they are asking. Offer what you think it is worth. Print out what the Kelly Blue book defines as excellent, then ask them to justify how they can rate the vehicle excellent...which they can't. Sounds like it may be worth around $2,500. Vehicles that are 18 years old are going to need new parts.Having to replace a transmission at 53k is not very good. Previous owner must have made a lot of short trips.

bdr127

Asking price is just that...what they are asking. Offer what you think it is worth. Print out what the Kelly Blue book defines as excellent, then ask them to justify how they can rate the vehicle excellent...

FWIW, "Retail" doesn't list a condition. It is assumed that the dealer will have the car in decent shape -- no mechanical problems and cleaned up nice for the lot. "Trade-in" and "Private Party" have conditions, however.

However, in this particular case, I definitely agree that the '87 Blazer isn't worth anything near what they are asking... BTW, it probably doesn't have a "true" 53k. The instrument cluster was probably replaced and they've put on 53k since then. True miles would probably be unknown...