When I buy something, I don't give a thought to what the store selling the item paid for it. The item either represents what I think is a good value or I won't buy it.
Because they trust dealers more, because they have something to fall back on if the car breaks down. If they didn't trust the dealer more they wouldn't be paying more.
You are kidding, right? The only reason people buy used from dealer is because they are lazy and they think it is cheaper or they cannot afford to spend more.... Certinaly, it is transactionally easier which should also mean that this is more expensive (because markets are at least somewhat efficient). Yes, they are reconditioned, yes, they look and smell better. They are certainly detailed. Are they really better? The dealers certainly do as much work on the used units as they do when you pay $600 for the 30k mile service: replace some filters and fluids and glace over few dozen things: check and adjust.... my [non-permissible content removed]! One thing is for certain: it is a lot of work to buy or sell a car privately!
There is no fall back unless you buy from a place like Carmax and even then it is a few days. Some folks think that a lease return is a cherry used car and some other sucker has paid for a good chunk of depreciation.
In my time: I have bought a few older but lower milage cars privately and typically they are not cheap but they have worked out. They all needed some repairs: no one selling a car will sink $1k into a time belt, new tires, etc. I prefer getting a discount and then getting it done right instead of cheap.
Ask your self some basic questions: Can you shop used cars? Are they all the same (commodities)? Who are more informed (more wealthy) buyers and are they ones buying used?
Really? I do not think about their cost either, because for all I care they may sell me something at loss anyway....
I too look at some things and set my reservation price and estimated how far it is from the mean selling (not asking) price. THEN: I search until I think the cost of searching starts to exceeds my expected benifit. :P
I also know that for every dollar I get it below my reservation price I am getting more wealthy.
I know that - I was just making a point about others not understanding what is invoilved in the spread between trade and retail values of used vehicles, putting aside some unrealistic asking prices that spring here and there. All they can see is dealer "making" retail minus trade value and loath them for it.
Why do you think private party cars are that much less money? Most people think their cars are worth top dollar and ask that much for them.
We spend an average of 1200.00 reconditioning our used cars. We replace timing belts, tires and brakes that are below our minimum standards and our used cars are extra clean.
And, yeah, it is easier than driving all over (as I have done)to look at cars that fell far short of the owner's descriptions ect. What is the value of your time?
Isell: there are plenty of places that really have good used products! But there are also plenty that flip them as fast they they can get them too.
In truth, a used buyer has to drive around plenty in either case if they want to do it right! But it is almost impossible to compare used cars as apples to apples. Used lots provide value, the only question is whether it is enough given their markups... which are typically heftier than they are on new...
Forget all this reconditioning stuff. When I trade a car it is always well within the 3/36 b to b warranty. Even if I get waylayed a year I'm still within warranty. All records are in the glove box. Dealers steal these records as I once sent a friend to look at a car I had traded saying "look in the glove box for the oil changes, tire rotations, etc". They were not there and he didn't buy it. Why did they steal an integral part (maint records) of my trade-in? Salesmen: I assume they are something between a convicted felon and a high school graduate. Not the kind of person I need leading me through the sale. Forget the handshakes and the big smiles. This is serious business and my money is being spent for MY enjoyment. I see them like a waitress in a restaurant. Necessary for getting things, but no power to set price. Getting what I want makes me happy. Getting it at a reasonable price is the goal. Getting a soft sale with unreasonable prices makes me want to fight. I prefer a hard sale with hundreds being on the table, not some smiling putz with dreams of thousands. Treat me like a sucker and you get what you deserve.
I hope I never see you as a customer. I would spend about five minutes with you and you would be gone.
That dealer didn't "steal" your records! Have you ever heard of privacy laws? We can't leave items in cars that have the previous owners personal information. You didn't know that I suppose?
If your friend didn't buy the car because those records were missing it sounds like he didn't trust you!
I hope the hosts dump your condesending, miserable post!
You know I have had some bad (and many good) experiences with dealers and I have to admit I have some trust issues. When I read what some of the people write on here I have to admit I have a lot more sympathy for them than I used to. Keep your chin up Isell. The sun will come up tomorrow and mako still won't have his corvette.
the reality is, over the top maintenance records really don't mean much. i always leave my 'every single tank of gas' records in my trade in, but i doubt if the next owner ever sees them.
2024 Ford F-150 STX, 2023 Ford Explorer ST, 91 Mustang GT vert
It sounds like you've been taken for a ride or two but I suggest directing your wrath toward your personal chauffeurs instead of making wild and baseless generalizations.
Dealers steal these records ...
Steal? Don't be silly. You sold the car and its contents to the dealer. The rightful owner of said records is free to dispose of his or her property as they see fit.
a waitress in a restaurant ...
... deserves respect. Please don't forget to tip her generously.
You are correct. My post was overly critical and should not have been laid out in such an all encompassing way. Many sales persons and many consumers are trying to “do the right thing”.
All I came here for was an answer to why there was a $4,000 discrepancy between Edmunds and the dealer price. All I got was “pay it if you want the car”, “he doesn’t have to sell it to you” and other canned responses from puffing and self promoting sales people. Then someone saying Edmunds does not represent the market. Wrong! Edmunds does represent the market. It is based on actual sales figures to help those that have been listening to too many tired old sales pitches. This is a consumer site and any sales persons contributing to this Edmunds site should not be trying to make light of consumers questions. Perhaps be truthful and say whether actual sale figures or dealer price should change and why.
All I came here for was an answer to why there was a $4,000 discrepancy between Edmunds and the dealer price.
Three things 1.)accuracy 2.) location and 3.) age.
For the first thing with used cars accuracy is very suspect as not every used car is exactly the same. Two different 2003 Buiyota Benz Sludgemobile GT's will have differing prices depending on condition (both body and mechanical), options and mileage. Sure you can take the sales price on one and make the adjustments for options, mileage and condition, but those are just estiments. Not to mention that the sales price of the first one may have been a fluke being to high or two low.
Secondly prices will change from location to location. In larger metro areas it can even change in regions within that metro area.
Finally as that information ages it becomes more and more out of sync with reality as prices change over time in a free and open market.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Thank you, Snake for a concise understandable answer. Sorry about my inconsiderate rant.
I have decided to wait till mid July and order a 2008 exactly the way I want it. I am going to go to the smallest dealer within reason displaying a Bowtie Sign.
I may even try selling the Toyota myself and using the wife's Denali for a short spell. Oh no the behemoth. Do I need a CDL for that.
Dude: Relax, they just want to keep that vehicle a bit longer or they are betting you will still buy it at their current price. For $4k, you can expand your search to include every state in the union, fly out there, and then ship it back to your door.
Your low offer didn't work so you had a little pity party for yourself. Sometimes the numbers you read on the internet will work and other times they won't.
Not a dealer, not in sales, not even close. Yet, I would say exactly the same thing as others: either a major piece of info is missing in your story, or your assessment of the values is wrong, or their assessment is wrong. If everybody is sticking to their story there is not much you can do about it. It is still their property, so they can dispose as they see fit and there is no law against refusing lowering the asking price. If their assessment is correct, they will sell for their price soon, if yours, they'll be stuck with it for a while. Perhaps then they may change your mind. Time is also money - if you can wait, you may get it for less, if can't - got to fork over the 4 grand more than you think you should. No way around it, really. It's that simple.
I'm not a car dealer, but I have to laugh at some of the folks on this thread who worry about what is fair profit for a dealership/salesman to make when there are so many variables. We all have access to the vast resources on the internet and we should all be able to strike a deal that represents a reasonable, even good, value. Not every car can be had for invoice, let alone below invoice. It may be new or hot or limited in some way. Not everyone is honest on the prices paid forums (say it ain't so) or fails to disclose taxes or trade-in or other factors that have an impact on the deal.
These same folks who sweat out whether they left $100 or even $500 on the table because some yahoo said they got it for less on another thread will turn around and sell their car after one year, two years, 29 months, whatever...and will have made either zero or minimal down payment, get a 60, 72 or 84 month loan and will never be right-side up on their car. They're often the buyers whose beacon score places them in a risky or sub-prime category for a loan that adds $100s, sometimes $1000s to their loan--if they see it to conclusion, rather than rolling the negative equity into their next car. Naturally, some dealer is ripping them off because he/she won't knock another $200 off to make them--briefly--happy, or undervalued their trade-in. Sell it yourself or take it to Carmax! Line up your best financing in advance. But, it's so much easier to pi$$ and moan about that bad ol' dealer who is taking advantage of me.
The simple way to buy a car without concern (profit or otherwise) is to do your research, make an offer (the bobst method or other approach), buy a car that has proven reliability on a short term loan or pay cash for the whole thing and hang onto it until the wheels fall off. Repeat process every 5, 10, 15 or 20 years depending on what your budget allows--and, believe me, you don't have to be wealthy to make this system work. It won't work, however, if you are a conspicuous consumer or gotta have the latest and greatest or can't control your spending impulse or must impress others by living beyond your means.
There are always people who lose their transportation through illness, divorce or other unforeseen circumstances and they are the exception to this generalization.
We spend an average of 1200.00 re conditioning our used cars.
Would you mind sharing how much of this average is for parts, and how much is for $90 an hour labor?
I would think a large part of that $1,200 is just for the 124 point inspection, or expensive service interval (trans./coolant/oil change) and detailing.
Mosty dealers run the service and sales department as two seperate entities. Therefore when reconditioning is done, the sales department gets charged the full rate by service department, and yes that usually includes $90/hour labour.
A typical reconditioning will involve any combination of these(CDN dollars): tune up $150 new brakes $250 detail $200 paint/body/dent work $500, some times more new hubcaps/fixing curbed wheels $100 - $200 new tires $500 extended warranty certification for Certified Pre Owned $400
Most common is the tune up, brakes, and certification, and most cars usually require some sort of body work done to them.
Most dealers run the service and sales department as two separate entities.
Okay. But, isn't that pretty much the right hand paying the left? In a nutshell what is the true cost to the dealership of this $1,200 re conditioning. The service dept. may be charging the sales dept. $90 an hour for recondition, but the net cost to the dealership is probably closely to the $20-$30 an hour that they pay someone to perform the inspections and re conditioning... plus maybe another $10 for miscellaneous. So, that $1,200 re conditioning is really only costing the dealership around $600-$700.
Hell our CPO alone adds nearly 2,000 dollars to the cost of the car and 95% of that money goes straight to Land Rover. The dealership does not see a bit of it.
No way to answer that because sometimes the parts cost more than the labor and visa versa. A lot of the money go's to the vendors that come to our lot and work on cars. This might include paint touch up, paintless dent removal, interior work etc.
A lot of these cars, were traded in by owners who thought they were "perfect".
The point remains that $1200 is not an actual cost of reconditioning to the dealership - it may called acquisition cost to the sales department, which gives them more motivation to sell the thing for a higher price, but it is not a real cost to the ultimate owner of the car (i.e. the dealership).
As a buyer all I need to be concerned is whether the asking and final transaction price reflect a real value of the vehicle - if that price happens to be below the acquisition cost of the sales department, it's their problem not mine. Conversely (of course), if the market price of that used car happens to be well above their acquisition cost, power to them
Here is the bottom line: someone claims that the cost is $1200 to recondition a vehicle; however, that 1200 already has "some" markup built into it. Thus, your claim is less than straight talk! Perhaps, you should tone down your rhetoric on consumer penny pinching... Pot calling the kettle black?
That's correct, but in accounting terms it still adds a $1200 cost to the car.
FALSE! You added $1200 to the cost but the cost actually went up by the amound of your own cost (cost of goods sold). I call this padding not in accounting terms!
Sometimes we simply too much for what we think is a nice trade in. Once it get's inspected we find out it's going to take a lot of recon to make it right.
We can lose money on cars like this. That is part of the game. We just have to make more on balance than we lose!
Here is the bottom line: someone claims that the cost is $1200 to recondition a vehicle; however, that 1200 already has "some" markup built into it. Thus, your claim is less than straight talk! Perhaps, you should tone down your rhetoric on consumer penny pinching... Pot calling the kettle black?
Incorrect, there is no markup built into that price. And yes it is two separate departments. What one dealer charges for reconditioning and what another charges might be two different numbers but there is no markup in those numbers. If 1200 hundered dollars is what they charge then it is what it costs.
FALSE! You added $1200 to the cost but the cost actually went up by the amound of your own cost (cost of goods sold). I call this padding not in accounting terms!
Even IF there is profit built into that cost, I don't get to see any of it. So in terms of accounting it really is added cost to the car.
Profit is a good word! I have said it before and I will say it again and again. Everyone needs it or they will not be in business.
You have been told this before but this is handled as TWO seperate departments. This a way to obscure profits from both the salesperson and the buyer but it is still profit that is sold as cost to the consumer.
Again: There is nothing wrong with profit, but there is something to be said about giving inaccurate information... As has been mentioned before, the discussion of profit has always been brought into this mess by salesfolks who whine that there is not enough profit in the minis, etc. Once a seller brings that into the discussion, s/he has to be "honest" about the actual numbers...
If you play, play fair, or do not play! I wish more sellers would simply say: this is the number, take it or leave it! That is what I do... when I am selling something.
I recently sold a car for my parents. It was a ten year old Cadillac in great shape with low miles.
I didn't have the time to fool with it so I priced it slightly less than it was worth. Even though it was a great buy, I had a guy try to nitpick it and grind me. I told him the price was firm and walked away. An hour later, a couple came, walked around it, sat in it and wrote me a check. the first guy called me back and it was so good to tell him it had sold an hour later!
You see - it can be done. Yet so many in your industry likes do it different way. They bring all "supply-demand" (which is of course valid, by the way) thing when it comes to sell a Cooper, Solstice, Odyssey (when it was new), MDX (when it was new), etc. I say - if you can sell all your stock for X over a sticker it means that manufacturer missed their market research and you are correcting it, cashing on the difference.
However, when selling a Taurus, Impala, or another domestic "superhit" , they suddenly bring their children and alimonies for their three ex-wifes to the table. In that case, I'm with abrainrainer - they opened the door for a discussion saying that in order of feeding their kids (and kids of their boss), they need to sell it above what they say they paid for. Yet, suddenly their cost get inflated with bogus charges (for new cars), or retail price of the inspection/reconditioning (for used ones).
It would be like buying an item for say $100 then "selling" it to my relative (who lives with me in one household) for $120 and then the relative claiming he/she paid for it $120, so in order for his/her family to survive, he/she has to sell it for more than that.
I say - sell it for whatever you can get - but when you bring your "costs" into discussion, don't claim the cost is more that it really is. The fact that your department paid whatever it is, does not mean it was a real cost to the dealership.
Like I said before, over and over - except for special X/Y/Z/GMS/VIP, or whatever they are called plans, the cost or profit should not be brought to the table by any of the sides. It's irrelevant in its explicit form. May be relevant in determination of an offer or acceptance of such, but not as a part of "I let you keep $100" or "you are taking my today's dinner" negotiations.
I don't bring our costs to the table but customers sure like to. The "cost" our Used Car Department has nothing to do what the costs to the dealership may be as far as that individual deal is. If, after three months, we give up and sell a used car for less than what we have in it, this is considered a LOSS to the Used Car Dept even though we may have made a bit in service.
I have never once talked about my personal fiances9as others have) in these forums or complained about not being able to feed my kids. For those who have, I have suggested either doing a better job, finding a better store to work at or finding a different profession.
I have never once talked about my personal fiances9as others have) in these forums or complained about not being able to feed my kids. For those who have, I have suggested either doing a better job, finding a better store to work at or finding a different profession.
I know you did not - but it's a favorite line in your industry, or its worse part at least. I think I get it - the whole post is not really about you, more about "the rest of them".
Regarding how it is seen by the sales dept. - I honestly could not care less. All I know your place could have ten departments shuffling the thing twenty times over, each time with a small markup and the last link in the chain could be called a sales department. I'm sure if it was efficient and profitable to the owner, it would be done. All I'm concerned is whether your price is acceptable. How do I look at it? Well - try to research the model, make, mileage, look at the condition. Somewhere on the way I may take a guess how much it is costing you, but you won't hear it from me. I'll just say "OK", or "How about X?", after which you may say "OK" or "No, thanks", "How about Y?", which eventually will result in either mutual "OKs" or "No thanks". We may reveal to each other why we think what we say, but not necessarily all of it. That's sort of beyond our scope here.
Isellhondas: most of us really agree on more aspects than NOT.
However, you have to allow for the fact that many buyers and sellers are reacting to the practices in our environments. For example, if I go to 3 dealers, I catch all of them lying to me and trying to screw with my head, when I go to the 4th dealer I am also expecting a lie. You will agree this is a normal defence mechanism for sane people (on both sides)?
Granted it is caused by stereotyping the other party... which is.... not nice but, a regular reality in our world? What is particularly annoying is that some dealers pretend to by nice and forthcoming with honesty only to strike at you at the last moment when you have already invested time and often money into the deal (taken 1-2 hours of your day).
Bottom line: a few (or many) bad apples are poisoning the space for everyone?
Information availability is cleaning it up slowly but surely!?
First of all, I'm from So. California. That is a snakepit when it comes to car dealers. A lot of (not all)sleazy dealers down there along with moochy buyers who pit them against each other.
So, yes, the sterotypes certainly apply.
And, those dealers (and customers) are here too but to a much lesser extent. I deal with this on a daily basis.
I too have lived in CA. When I lived there, many people would buy new (fancy) cars by sucking equity out of their overpriced homes.
I suspect that the cost of living is so high there that everyone is trying to climb over everyone else to survive... living beyond one's needs was the norm there for way too many people. That financial pressure does not make folks any nicer; on either side of the deal....
I thought dealers could make good profit if they didn't waste a good sum running silly television commercials like "600 in stock", "everything must go", "no credit, no problem", "can't help you if you don't call", "biggest dealer in the Universe"... I'm sick of these.
Comments
You are kidding, right? The only reason people buy used from dealer is because they are lazy and they think it is cheaper or they cannot afford to spend more.... Certinaly, it is transactionally easier which should also mean that this is more expensive (because markets are at least somewhat efficient). Yes, they are reconditioned, yes, they look and smell better. They are certainly detailed. Are they really better? The dealers certainly do as much work on the used units as they do when you pay $600 for the 30k mile service: replace some filters and fluids and glace over few dozen things: check and adjust.... my [non-permissible content removed]! One thing is for certain: it is a lot of work to buy or sell a car privately!
There is no fall back unless you buy from a place like Carmax and even then it is a few days. Some folks think that a lease return is a cherry used car and some other sucker has paid for a good chunk of depreciation.
In my time: I have bought a few older but lower milage cars privately and typically they are not cheap but they have worked out. They all needed some repairs: no one selling a car will sink $1k into a time belt, new tires, etc. I prefer getting a discount and then getting it done right instead of cheap.
Ask your self some basic questions: Can you shop used cars? Are they all the same (commodities)? Who are more informed (more wealthy) buyers and are they ones buying used?
Digital divide = infomation divide!
I too look at some things and set my reservation price and estimated how far it is from the mean selling (not asking) price. THEN: I search until I think the cost of searching starts to exceeds my expected benifit. :P
I also know that for every dollar I get it below my reservation price I am getting more wealthy.
2018 430i Gran Coupe
We spend an average of 1200.00 reconditioning our used cars. We replace timing belts, tires and brakes that are below our minimum standards and our used cars are extra clean.
And, yeah, it is easier than driving all over (as I have done)to look at cars that fell far short of the owner's descriptions ect. What is the value of your time?
In truth, a used buyer has to drive around plenty in either case if they want to do it right! But it is almost impossible to compare used cars as apples to apples. Used lots provide value, the only question is whether it is enough given their markups... which are typically heftier than they are on new...
2013 Mustang GT, 2001 GMC Yukon Denali
That dealer didn't "steal" your records! Have you ever heard of privacy laws? We can't leave items in cars that have the previous owners personal information. You didn't know that I suppose?
If your friend didn't buy the car because those records were missing it sounds like he didn't trust you!
I hope the hosts dump your condesending, miserable post!
We wholesale about a third of the cars we take as trades.
But, I do thank you for the support!
Isell is right regarding privacy laws: would you want 3 people a day calling you at home to confirm these records, AFTER you traded your car in?
Whenver we have any information we store in the file, not in the car, and we black out the names.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
It sounds like you've been taken for a ride or two but I suggest directing your wrath toward your personal chauffeurs instead of making wild and baseless generalizations.
Dealers steal these records ...
Steal? Don't be silly. You sold the car and its contents to the dealer. The rightful owner of said records is free to dispose of his or her property as they see fit.
a waitress in a restaurant ...
... deserves respect. Please don't forget to tip her generously.
tidester, host
All I came here for was an answer to why there was a $4,000 discrepancy between Edmunds and the dealer price. All I got was “pay it if you want the car”, “he doesn’t have to sell it to you” and other canned responses from puffing and self promoting sales people. Then someone saying Edmunds does not represent the market. Wrong! Edmunds does represent the market. It is based on actual sales figures to help those that have been listening to too many tired old sales pitches. This is a consumer site and any sales persons contributing to this Edmunds site should not be trying to make light of consumers questions. Perhaps be truthful and say whether actual sale figures or dealer price should change and why.
2013 Mustang GT, 2001 GMC Yukon Denali
Three things 1.)accuracy 2.) location and 3.) age.
For the first thing with used cars accuracy is very suspect as not every used car is exactly the same. Two different 2003 Buiyota Benz Sludgemobile GT's will have differing prices depending on condition (both body and mechanical), options and mileage. Sure you can take the sales price on one and make the adjustments for options, mileage and condition, but those are just estiments. Not to mention that the sales price of the first one may have been a fluke being to high or two low.
Secondly prices will change from location to location. In larger metro areas it can even change in regions within that metro area.
Finally as that information ages it becomes more and more out of sync with reality as prices change over time in a free and open market.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I have decided to wait till mid July and order a 2008 exactly the way I want it.
I am going to go to the smallest dealer within reason displaying a Bowtie Sign.
I may even try selling the Toyota myself and using the wife's Denali for a short spell.
Oh no the behemoth. Do I need a CDL for that.
2013 Mustang GT, 2001 GMC Yukon Denali
Why would a dealer display this?
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Your low offer didn't work so you had a little pity party for yourself. Sometimes the numbers you read on the internet will work and other times they won't.
That is no reason to leave a post like you did.
link title
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2018 430i Gran Coupe
These same folks who sweat out whether they left $100 or even $500 on the table because some yahoo said they got it for less on another thread will turn around and sell their car after one year, two years, 29 months, whatever...and will have made either zero or minimal down payment, get a 60, 72 or 84 month loan and will never be right-side up on their car. They're often the buyers whose beacon score places them in a risky or sub-prime category for a loan that adds $100s, sometimes $1000s to their loan--if they see it to conclusion, rather than rolling the negative equity into their next car. Naturally, some dealer is ripping them off because he/she won't knock another $200 off to make them--briefly--happy, or undervalued their trade-in. Sell it yourself or take it to Carmax! Line up your best financing in advance. But, it's so much easier to pi$$ and moan about that bad ol' dealer who is taking advantage of me.
The simple way to buy a car without concern (profit or otherwise) is to do your research, make an offer (the bobst method or other approach), buy a car that has proven reliability on a short term loan or pay cash for the whole thing and hang onto it until the wheels fall off. Repeat process every 5, 10, 15 or 20 years depending on what your budget allows--and, believe me, you don't have to be wealthy to make this system work. It won't work, however, if you are a conspicuous consumer or gotta have the latest and greatest or can't control your spending impulse or must impress others by living beyond your means.
There are always people who lose their transportation through illness, divorce or other unforeseen circumstances and they are the exception to this generalization.
Gogiboy
Would you mind sharing how much of this average is for parts, and how much is for $90 an hour labor?
I would think a large part of that $1,200 is just for the 124 point inspection, or expensive service interval (trans./coolant/oil change) and detailing.
A typical reconditioning will involve any combination of these(CDN dollars):
tune up $150
new brakes $250
detail $200
paint/body/dent work $500, some times more
new hubcaps/fixing curbed wheels $100 - $200
new tires $500
extended warranty certification for Certified Pre Owned $400
Most common is the tune up, brakes, and certification, and most cars usually require some sort of body work done to them.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
Okay. But, isn't that pretty much the right hand paying the left? In a nutshell what is the true cost to the dealership of this $1,200 re conditioning. The service dept. may be charging the sales dept. $90 an hour for recondition, but the net cost to the dealership is probably closely to the $20-$30 an hour that they pay someone to perform the inspections and re conditioning... plus maybe another $10 for miscellaneous. So, that $1,200 re conditioning is really only costing the dealership around $600-$700.
The profits go to the owners.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
A lot of these cars, were traded in by owners who thought they were "perfect".
As a buyer all I need to be concerned is whether the asking and final transaction price reflect a real value of the vehicle - if that price happens to be below the acquisition cost of the sales department, it's their problem not mine. Conversely (of course), if the market price of that used car happens to be well above their acquisition cost, power to them
2018 430i Gran Coupe
That's correct, but in accounting terms it still adds a $1200 cost to the car.
FALSE! You added $1200 to the cost but the cost actually went up by the amound of your own cost (cost of goods sold). I call this padding not in accounting terms!
We can lose money on cars like this. That is part of the game. We just have to make more on balance than we lose!
Just like any business.
The 1200.00 get's charged to the car. You have been told this before but this is handled as TWO seperate departments.
I hate to disappoint you but profit isn't a dirty word!
Incorrect, there is no markup built into that price. And yes it is two separate departments. What one dealer charges for reconditioning and what another charges might be two different numbers but there is no markup in those numbers. If 1200 hundered dollars is what they charge then it is what it costs.
FALSE! You added $1200 to the cost but the cost actually went up by the amound of your own cost (cost of goods sold). I call this padding not in accounting terms!
Even IF there is profit built into that cost, I don't get to see any of it. So in terms of accounting it really is added cost to the car.
Profit is a good word! I have said it before and I will say it again and again. Everyone needs it or they will not be in business.
You have been told this before but this is handled as TWO seperate departments.
This a way to obscure profits from both the salesperson and the buyer but it is still profit that is sold as cost to the consumer.
Again: There is nothing wrong with profit, but there is something to be said about giving inaccurate information... As has been mentioned before, the discussion of profit has always been brought into this mess by salesfolks who whine that there is not enough profit in the minis, etc. Once a seller brings that into the discussion, s/he has to be "honest" about the actual numbers...
If you play, play fair, or do not play! I wish more sellers would simply say: this is the number, take it or leave it!
That is what I do... when I am selling something.
I recently sold a car for my parents. It was a ten year old Cadillac in great shape with low miles.
I didn't have the time to fool with it so I priced it slightly less than it was worth. Even though it was a great buy, I had a guy try to nitpick it and grind me. I told him the price was firm and walked away. An hour later, a couple came, walked around it, sat in it and wrote me a check. the first guy called me back and it was so good to tell him it had sold an hour later!
However, when selling a Taurus, Impala, or another domestic "superhit" , they suddenly bring their children and alimonies for their three ex-wifes to the table. In that case, I'm with abrainrainer - they opened the door for a discussion saying that in order of feeding their kids (and kids of their boss), they need to sell it above what they say they paid for. Yet, suddenly their cost get inflated with bogus charges (for new cars), or retail price of the inspection/reconditioning (for used ones).
It would be like buying an item for say $100 then "selling" it to my relative (who lives with me in one household) for $120 and then the relative claiming he/she paid for it $120, so in order for his/her family to survive, he/she has to sell it for more than that.
I say - sell it for whatever you can get - but when you bring your "costs" into discussion, don't claim the cost is more that it really is. The fact that your department paid whatever it is, does not mean it was a real cost to the dealership.
Like I said before, over and over - except for special X/Y/Z/GMS/VIP, or whatever they are called plans, the cost or profit should not be brought to the table by any of the sides. It's irrelevant in its explicit form. May be relevant in determination of an offer or acceptance of such, but not as a part of "I let you keep $100" or "you are taking my today's dinner" negotiations.
2018 430i Gran Coupe
I don't bring our costs to the table but customers sure like to. The "cost" our Used Car Department has nothing to do what the costs to the dealership may be as far as that individual deal is. If, after three months, we give up and sell a used car for less than what we have in it, this is considered a LOSS to the Used Car Dept even though we may have made a bit in service.
I have never once talked about my personal fiances9as others have) in these forums or complained about not being able to feed my kids. For those who have, I have suggested either doing a better job, finding a better store to work at or finding a different profession.
I know you did not - but it's a favorite line in your industry, or its worse part at least. I think I get it - the whole post is not really about you, more about "the rest of them".
Regarding how it is seen by the sales dept. - I honestly could not care less. All I know your place could have ten departments shuffling the thing twenty times over, each time with a small markup and the last link in the chain could be called a sales department. I'm sure if it was efficient and profitable to the owner, it would be done. All I'm concerned is whether your price is acceptable. How do I look at it? Well - try to research the model, make, mileage, look at the condition. Somewhere on the way I may take a guess how much it is costing you, but you won't hear it from me. I'll just say "OK", or "How about X?", after which you may say "OK" or "No, thanks", "How about Y?", which eventually will result in either mutual "OKs" or "No thanks". We may reveal to each other why we think what we say, but not necessarily all of it. That's sort of beyond our scope here.
2018 430i Gran Coupe
However, you have to allow for the fact that many buyers and sellers are reacting to the practices in our environments. For example, if I go to 3 dealers, I catch all of them lying to me and trying to screw with my head, when I go to the 4th dealer I am also expecting a lie. You will agree this is a normal defence mechanism for sane people (on both sides)?
Granted it is caused by stereotyping the other party... which is.... not nice but, a regular reality in our world? What is particularly annoying is that some dealers pretend to by nice and forthcoming with honesty only to strike at you at the last moment when you have already invested time and often money into the deal (taken 1-2 hours of your day).
Bottom line: a few (or many) bad apples are poisoning the space for everyone?
Information availability is cleaning it up slowly but surely!?
So, yes, the sterotypes certainly apply.
And, those dealers (and customers) are here too but to a much lesser extent. I deal with this on a daily basis.
I suspect that the cost of living is so high there that everyone is trying to climb over everyone else to survive... living beyond one's needs was the norm there for way too many people. That financial pressure does not make folks any nicer; on either side of the deal....