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Stories from the Sales Frontlines
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All of it just doesn't make sense. Nothing easy or quick about this. And judging by the type of customer Mr Costco was, this sale would surely come back and haunt the dealer in the future.
All this risk for ZERO profit? I don't think so.
Dealers that give up profit so easily and take on such risks don't last around very long.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
2013 LX 570 2016 LS 460
"Well..., you pay $10, and if you pass three tests, you get all the money in the jar and the keys to a brand new Lexus."
The man certainly isn't going to pass this up, so he asks, "What are the three tests?"
"You gotta pay first," says the bartender, "those are the rules."
So, after thinking it over a while, the man gives the bartender $10 which he stuffs into the jar.
"Okay," says the bartender, "here's what you need to do:
First - You have to drink a whole quart of tequila, in 60 seconds or less, and you can't make a face while doing it."
"Second - There's a pit bull chained in the backwith a bad tooth. You have to remove that tooth with your bare hands."
"Third - There's a 90-year old lady upstairs who's never had sex. You have to take care of that problem."
The man is stunned! "I know I paid my $10 -- but I'm not an idiot! I won't do it! You'd have to be nuts to drink a quart of tequila and then do all those other things!"
"Your call," says the bartender, "but, your money stays where it is."
As time goes on, the man has a few more drinks and finally says, "Where's the damn tequila?!"
He grabs the bottle with both hands and drinks it as fast as he can. Tears stream down both cheeks -- but he doesn't make a face -- and he drinks it in 58 seconds!
Next, he staggers out the back door where he sees the pit bull chained to a pole. Soon, the people inside the bar hear loud growling, screaming, and sounds of a terrible fight -- then nothing but silence!
Just when they think that the man surely must be dead, he staggers back into the bar. His clothes are ripped to shreds and he's bleeding from bites and gashes all over his body. He drunkenly says, "Now..., where's that old woman with the bad tooth?"
Certainly not the "Jipst Method" of new car buying. :P
2013 LX 570 2016 LS 460
As I said in 52116, this doesn't apply at least in NJ. There is no such thing as "as is" unless the car is over 10 years old or has over 100k miles. Even though dealers put the "as is, no warranty" sticker in the window, it is not the case in NJ courts.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
In this case I'd tell the customer exactly how it's marked up and what the amounts are for, including inspection, servicing, and markup.
So unless I can turn a profit on the used unit, I won't consider such deal. It also bring down your overall average profit per unit.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
But, I had forgotten how it ended and I laughed again!
As soon as I hear from my daughter's insurance I'm likely in the market here. Wish I wasn't. The rental is a Hyundai Accent! Crank windows, manual locks but a USB port. Little thing but it's quiet, gets out of its own way.
My son's '03 Elantra is looking like it's going to need some TLC here shortly. He doesn't drive it much, and it's got 110K on the odo. Same thing....paint is peeling off the door handles, passenger side sun visor looks like someone took a hammer to it (a definite possibility, but my son's not talking). He's run it over parking bump stops a few times, so the front lower side of the bumper is being held on by some long screws I put in a couple of years ago.
But, it runs like a champ. Still has the original clutch, which doesn't seem ready to give up the ghost anytime soon. Doesn't burn or leak oil. Original cat and muffler is hanging in there, too. It's due for a brake job and probably some shocks real soon.
But, I think it's only worth a couple thousand. May be time to see if a buy here/pay here lot would like to buy it from me.
One of the best ever.
I live in Pa. and I never had a problem with a dealership doing a courtesy trrade with me. The last time was in 1994. I sold the car to a friend (as is) and the car was well out of warranty.
My car happened to be safety checked and a warranty put on it because a family member was buying it. I think this dealer only did the sale this way as a good PR move, so they can get more people into BMWs, and to keep their current customer happy. However, if they can do it, I still think, in my opinion, any dealer can sell a car on an "as is" basis, so they could safety check it or not. If a safety certificate is required by Mr. Costco to get the car on the road then he would have to pay for that. If Mr Costco bought the car "as is" the dealer isn't responsible in my opinion, because dealers sell cars "as is" all the time, and private sales are usually "as is" or possibly with a safety certificate, but not with a warranty.
I stand by what I said, dealers can sell cars on an "as is" basis if that is what the contract says, and there is nothing illegal about a dealer taking in a trade and flipping it to another buyer....in my opinion.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Most dealers might think it isn't worth it.
I like a dealer who will do a little extra to make the sale. I wouldn't expect a dealer to do it if I thought it was illegal or was questionable.
It is a win, win situation all around. The dealer moves a new car and sells off a not os easy car to sell, the buyer of the used car is happy because he buys the car for the cost he would have bought it privately, the new car buyer is happy because he saves the difference in tax.
It isn't illegal. It's taking advantage of a situation which is only fair...what is the difference whether the buyer of the new car sells privately or through the dealer, he shouldn't have to pay taxes twice.
My deal was done by a very large bmw dealer, they wouldn't do it if it was illegal.
In my case it I don't know if they would do it if the car wasn't being sold to a family member, and for sure they would want to certify it, but technically, a dealer could do it just to make a deal work...and I don't know what could be illegal, except in New Jersey...but I wasn't referring to NJ.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
30 seconds or 30 feet whichever came first. Ahh the good old days.
Richard
As in all loving families, topics of discussion do vary. :P They only serve to enhance the recesses of your mind and broaden your horizons.
Richard
LMAO! That is sooo cool!
Richard
Yes, you are correct. It is not worth it.
Of course, in your case, it benefited you and I'm sure in your mind that was a good thing for them to do.
I'm here. Sales and use taxes vary from state to state. Here in Illinois if you really want to push it you can collect sales tax on a car you sell (just make sure its in the bill of sale) and take a credit for the sales tax you paid on the car when you file a ST-4 (sales and use tax form). I am sure other states are like that.
Would I recommend this over just taking the simpler route of doing a trade in, most likely no.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
tidester, host
SUVs and Smart Shopper
odd/even gas rationing, fill up limits.
it is the only reason i can think of why i like to have more than 1 car to drive.
when gas spiked in the summer of '08, i never paid peak price because i was able to split up my driving between vehicles and didn't fill up for over a month.
did that make up for the extra taxes, and insurance?
no, but it made me feel like i stayed at a Holiday Inn Express.
i've been looking around for a car that is a cross between my old focus (4cyl/stick) and current fusion, so a fusion 4cyl/stick, but the good ones don't stay around long.
Me, too!
You mean something like how it can follow the white line down the road?
Dicking and running
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
hp6130, you mentioned at least two cars you bought in recent years. Why not share those stories so that we don't get off track? W/o stories, we have to fill in the gaps somehow. :P
a: there's a good chance you can make more than $0 profit on the SUV by keeping it on the lot and by selling it the proper way
b: when you can flip it at a dealer's auction for $0 profit and not be liable for anything that may go wrong with the vehicle (the buying dealer will need to inspect it)
c: you put yourself at risk by not doing any sort of an inspection and selling the car blindly on an as-is where-is basis because it's the "nice" thing to do
In your situation things worked out because there was an inspection done and an extended warranty was purchased. The dealer did turn a profit, if not on the front end, then on the back end.
Here in BC we cannot sell a car on an as-is basis. If someone drives off the lot and the tranny falls out a block down the road or the brakes fail on a 20 year old beater, WE are liable for releasing an unsafe vehicle. Hence we don't sell wholesale units to the public I tried convincing my managers to do that but they won't budge on it. Just too much liability. And too much risk. It's just not worth it.
That's why like lsell is saying, most dealers won't do it.
It's not a win-win. At best it's a win-lose situation (win buyer/lose dealer). It could be a win situation for the buyer until an issue arises then they'll be screaming at the dealership for selling them a lemon. And if that happens the dealer will not only suffer out of pocket expenses on a vehicle they made ZERO profit on, but also bad publicity if they try to fight it. So at worst it will become a lose/ultra-lose situation (lose for the buyer/ultra lose for the dealer).
Situations like this almost always turn bad. You know, that thing called Murphy's Law and No good deed goes unpunished" type thing.
Hence no courtesy trades or wholesale uninspected units to the public. Not in today's lawsuit happy times.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
You would think wrong, at least in many states. In my state, the dealer must provide a warranty if the new owner pays at least $3000, or the vehicle is six years old or less. No getting around it. It is mandated by state law.
The dealer could put "As Is" in neon all over the contract, but it doesn't get him off the hook.
The state law also provides that the car must be inspected and be mechanically operational and sound when sold and throughout the warranty period.
Today (almost literally) it's nothing to see a 20 cent or even a 30 cent swing in one day. My Father couldn't understand it then.
I still don't understand it now.....all these years later. Somebody's doing something they shouldn't be doing.
In the post Katrina fiasco I had the price go up ten cents between the time I pulled in to the time I got to the pump.
At the time, we had just bought our first house and I had a 60 mile round trip commute. I had to wait in line with the others and the odd - even plate thing was hard on us since both of our cars had even numbers.
A guy I worked with was selling his mother's 1962 Rambler American Convertable for 200.00. It had an odd plate and a hnuge gas tank so I bought it.
It actually looked and ran pretty well. The brittle top had never been lowered so I never put it down either. It didn't smoke but it faithfully used a quart of oil every 300 miles on the dot and it had done this since it was two years old.
That faithful little Rambler never let me down in the year or so I owned it. Finally, I sold it to a young college girl at work. I told her father that ANYTHING could happen to it and no guarantees. 200.00 and it was gone. Her last name was Nash and we called it Nash's Rambler.
I ran into her about five years later and she informed me that that little Rambler made the trip every week from San Diego to Palos Verdes for three years and never caused her any trouble. Oil consumption never changed.
I wouldn't mind having that car back. It was actually pretty cool.
Fair enough....it worked fine for me, and if I may add, I think the dealer benefits. They made me happy and they gained a new customer who will be going there for service.
The laws must vary from state to state and province to province regarding selling cars as is. Thanks for making your well researched points, and I definitely do see your point of view, and agree with what you are saying, when it applies or if that is the dealerships view.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
That's reasonable, but laws must vary from state to state - province to province.
In Ontario Canada you can sell a car "as is". You have to get it safety certified before you put it on the road.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
In the 70s gas would go up 5 cents a gallon.
My 73 Maverick cost me $2500.
Today a new much superior Fusion would cost at least $25000.
If gas went up in the same ratio, it would go up 50 cents.
I don't think it's as bad as it seems!
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Thank you for your answer - much appreciated. Could you answer my question about a lease buy back?
Say you buy back your leased Taurus after 3 years and the buy out price is $20,000.
You turn around and sell the car privately for $25000.
Should you have to claim the $5000 profit you just made?
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
If the offer is made only to the person who leased the vehicle, then the buy-out is part of the lease transaction. You certainly did not make a profit on THAT. Just my personal opinion. Your mileage may vary.
I remember that too. Around here there weren't to many gas lines just limited hours and most places limited you to something like 5 gallons.
The only place around you could buy gas on a sunday was on the tollway and they had a 5 gallon limit. The gas stations they had there were rather large so we would drive up to the very first pump, pump in our 5 gallons pay for it then drive around the back of the station to the very last pump and get another 5 gallons.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
And add my praise to your long list - that was a great story. Especially loved the deal with Costco guy who missed a good buy on your Tahoe. Tee hee hee
Both if you don't mind.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Thanks, I would agree. What percentage of people do you think would claim it?
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
I meant a 2010 Taurus SHO.......ha ha.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Personally I report all my income, yeah thats it, I would report all my income, yeah all my income.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I'm confused as to why there would be any tax liability.
I go to a dealer and make a deal on a car for 30K, residual in 3 years is 15K (my buyout). At the end of 3 years I buy out the car for 15K but its value on the street is 20K. So I get 5K back in my pocket of the 15K that I had paid off during the lease.
How is this different than buying the same car at 30K and selling it 3 years later at 20K?