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Comments
I didn't say the dealer HAS to disclose any price and I said they take great pains NOT disclose any price. What I also said is that would be a "great piece of information for us to have".
I agree that the consumer should do their research and if that research should uncover what a dealer pays, that's the best information that we can have.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Richard
The merchant is not going to sell his product for less than he wants to. And you have no idea what his expenses are to stay in business.
So why bother?
Not true - The trade is a seperate transaction. Each deal has to stand on it's own. Also. future service never is part of the sales consideration. The worst thing a sales department can hear is "sorry, I bought elsewhere. But you will get my service business".
If you are willing to pay a certain price to make the deal then you must believe that you are not being ripped off. And if you believe you are not being ripped off you must also believe the dealer's profit is fair. I mean, would you really buy a car from someone you believe is ripping you off?
tidester, host
SUVs and Smart Shopper
Pretty accurate.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
Yes, it would be great information, but as you said, it is not expected or necessary. A car dealer who has his own lot told me sometimes a person will say, I'll buy the car but I want you to take $500 off the price. He says fine, I'll do that........but there will be no warranty and you are buying as is. The point being someone could know the cost of the trade-in, but they don't know how much was spent on the car.
At least we are in agreement.
Yehhhhhhh!
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
That's not a bad average. Looks like the bad ones are in the minority...they just cause so much grief.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
I think he only wants to buy a car if he can rip off the dealer.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
You never feel you were been overcharged and bought it anyway? You've never bought an item and wondered how in the world anybody could sustain themselves selling that for the price you paid - yet somebody still sold it to you?
All I'm saying I don't know what fair profit really is. We can find out sustainable market-derived profit level, but (being a big fee-market supporter) I disagree with automatic assumption that anything that is generated by marketplace is fair - mostly because the marketplace is often highly distorted by regulations, monopolies, political influences and such. The market prices are what they are - ultimately they are still the best way to determine a "snapshot:" value of a product - but they often are not "fair" in common sense of that word. Just ask homeowners from Florida or California.
As Clint Eastwood said to Gene Hackman just before he shot him in Unforgiven "Deserve got nothing to do with it".
2018 430i Gran Coupe
At least we are in agreement.
Uhh, no we're not. :P As I have explained in my used car buying guide, knowing the price of the trade-in is just one piece of the puzzle. Giving a value to any reconditioning would be the next step, which would be minimal on most cars 1-3 years old. Ask the dealership what reconditioning was done on the car. I would think something like this would be your business, as a potential buyer. Throw in around 10% over this number for dealership profit, then some money for salesmans commission, doc. fee... then you have an accurate estimate of how much you could buy the car for.
I think some dealers would be glad to tell you what they had to do to recondition a car to resell it. Others might not. But you are going to ask how much they paid for the trade in?
Do you want an itemized list, such as Cost of trade in $10,000, add 10% profit = $1000, salesman commission $150, doc fee $200, cost of brakes $200, cost of cleaning $100, cost of advertising $100, cost of financing showroom, $50, cost of office staff, $75.......that's what you are asking for. You think 10% net profit is reasonable (it's probably high for cars) plus expenses on top of that and you want to know what those expenses are. When you buy a Big Mac do you ask how much the hamburger and bun costs then figure out their labor and franchise fees and rent are, to come up with a fair price?
Save your self worry and time and high bood pressure......check out a blue book or look at ads or use the internet and see what is a fair retail price. Worrying about what the dealer paid and then adding costs is a lot of work for nothing.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
But beyond that, what the dealer has in the car is not your business. Nor are his expenses. And 10%, is that an average? What the dealer makes on a particular car is also not your business.
The only thing that should concern you is how does the condition and price compare to other cars in the marketplace, and is it a good value to you? That is what you should focus on.
This is amazing! WHO CARES what a merchant has paid for the product he is selling??
Why are (some) people obsessed with this?
Either buy the car or don't!
Probably picked a bad time to do it. I figured with opening day (a very big deal in the 'Nati) and the people getting their boats ready for Spring and Summer, it would get some action. Well, yesterday it was pretty miserable outside. Today, it's actually snowing. Not good boat weather.
Well, got my first phone call on it this a.m.
Typical conversation..."how many miles? what options? MPG? one owner? Why are you selling it? Ever been wrecked?
In order....
~40K miles
-totally loaded, power everything, including rear flip seats, Nav, back seat DVD, leather, autoride suspension, tow package, 3rd row seats, flex fuel 5.3 V8, etc.
-MPG isn't stellar, but about 14 MPG-15 MPG in city, 18 MPG-19 MPG on the highway
-bought it new, all service records
-don't need a tow vehicle anymore
-Has never even come close to a body or paint shop
The offer?
$15K, cash.
I was stunned. I've already got a trade offer of over $20K. Told the caller that. He upped his offer to $17.5K. Apparently, he wasn't listening.
Told him he was about $10K shy of what it would take to buy it. He got "huffy" with me and gave me his phone number, instructing me to call him when I was interested in selling closer to his offer.
I responded that I'd give him a jingle sometime around 2012.
So why bother?
I’m not arguing that a buyer MUST have this information. I think I’m savvy enough to know that I will not know everything about what a product costs. However, when it comes to buying a car, especially a used car, it would be NICE to know how to go about the negotiating process.
In the end I know the sale will depend on whether I feel the product/car is worth, to me, what I’m paying. When I bought a new car a few weeks ago I paid the price the dealer asked for it because I felt that was a good price. Although I did try to buy it for less because that’s the way the car biz operates. When the dealer refused my offer I bought at his price because I knew it was a good price. On the other hand, the dealer gave me more for my car than what he wanted to give me at first because he knew the car I was trading was worth what I wanted. As we all know, when two reasonable people are involved in a transaction, a sale is more likely than less likely.
I don’t consider myself a grinder; I just like to be informed.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Given the emotion involved in buying a car (at least for men), it might be the fear that you will discover later on that you were ripped off that unhinges some people. The idea that they will drive by the dealer and see their salesman laughing and high-fiving his buddies while they all point at the buyer is too much for insecure egos.
So the result is the grinder. Why else would people come here and ask if their deal was a good one after the fact?
This is where I envy my wife. She simply says "get me a white one" and thinks no more of it. If the deal or the car turns out to be crap she has me to blame. :sick:
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
2306.96
1045.25
0
449.41
525.47
500
0
442.34
267
500
1349.15
2762.48
590.95
963.49
2025.43
499.03
999.75
2383.15
1063.61
615.75
This also shows you that peoples thinking is all over the board on what a good deal. I can almost guarentee that every person left here thinking they got a good deal. If not they never would have signed up. It is all perception and how good of a job the sales person did building value and selling the car
I would have told him.." It sounds like you need to find a 15,000 car"
LOL. Well no, that's none of my business. I'm just saying I would like to know, because according to my theory, it would be beneficial in knowing how to buy a car at a lower price.
I guess the best one could do in finding out how much a dealership had in a car would be to ask them ( No, I'm not advocating this... just saying. Isell says sometimes a dealership will show a numbskull customer how much they have in a car. So, act like a numbskull and it could work to your advantage. Uh... some of you can just act natural.
When you buy a Big Mac do you ask how much the hamburger and bun costs then figure out their labor and franchise fees and rent are, to come up with a fair price?
Save your self worry and time and high bood pressure......check out a blue book or look at ads or use the internet and see what is a fair retail price. Worrying about what the dealer paid and then adding costs is a lot of work for nothing.
Thanks doc. After all the back and forth, and misunderstanding over this issue... that's probably a good idea.
1045.25
0
449.41
525.47
500
0
442.34
267...
I'm thinking those "0's" are end of the day sales. I can't imagine giving up the chance of making more money at 9 AM.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
The dealer could have
1. Gotten it for free. Doesn't mean he will sell it for $1500 only
2. He could have paid more than it is worth due to a bidding war at the auction. Doesn't mean you have to pay that much more.
And the fact is that no mass production car company in this world knows how much it cost them to make that car. There is a myriad of book-keeping exercises that muddies up the picture, depending upon how each cost component has been accounted for.
How do the tradeins play on some of the low profit ones? Were the tradeins promising a reasonable profit to sustain the business?
2014 Malibu 2LT, 2015 Cruze 2LT,
I just took my blood pressure reading after reading yours and drivers posts. It's 190/110. You guys trying to kill me off on purpose? :sick:
O.k, I'll try to make this clear. I never said it was my business in what a dealer had in a car. I never advocated asking what a dealer paid for a car, or any of the other inflated reconditioning parts/labor cost . I'm just saying, if a "gennie" granted me unlimited wishes, one of them would be to know what a dealership had in a car that I was looking to buy. Now... I need a vacation. Isell, how's the weather in your neck of the woods?
Sometimes we will sell a car and bust out even just to get a good sales person off a slick spot, sometimes it is to get that extra unit that is the difference between a 6 car day and 7 car day which is good for morale. If sales people see activity and that there co-workers are moving metal they will get over the "business is bad so its ok if I sit on my [non-permissible content removed]" mentality. Some times you sell it just to call a strokes bluff and make them man up. Sometimes the customer is a truly nice person who deserves a great deal just because of who they are. There are so many different things that come into play it is impossible to say "Ok $XXXX is a fair profit so we will sell all cars for that price. All you can do is let every one roll that makes sense and remember that you are not married to any of them and they build them every day.
Business builds business, if you get the rep of being a hard [non-permissible content removed] dealership then you are doomed. If you have the rep of being a layed place that likes to deal with people then your business will flourish. IMO it is business 101
That word "inflated" seems to imply that any recon a dealer does is a rip off. The actual cost of recon is added to the cost of the vehicle. Would you rather buy a car that needs pads, rotors, tires, LOF, windshield replaced, etc?
LOL. Good one gg. :P
No, not a rip off. By inflated, I mean being charged $110 per hour of labor, and high mark-up in parts. My dealership wanted $210 to put a battery in my car. I know they have high over-head costs etc... but $210 to put in a battery that I had Goodyear put in for around $120? I would probably want the dealership to do some of the more complicated stuff. But, tires, batteries and brake pads I would want to take car of myself and save the money.
Well, Nashville isn't too far from Louisville... about a 4 1/2 hour drive. You bring that number sheet we can do business.
I think that's just human nature, and therefore I usually don't worry about things like that. If I see value in something, I'll buy it. End of story.
If you want to know all the ins and outs about a business, including markup, and various associated costs then open up your own shop, and you can quickly realize what it takes to keep the doors open.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
I once had someone lowball me on the lot like that. They said call me. I told them don't bother giving me your number, it'll never sell for that little.
He insisted, so I said ok, I'll take your number but I'm not going to call you. Don't hold your breath.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
0 (zero) on 2 of them. Did you sell cars to Jip and Dino this month?
Amazing difference though. You must hope and pray for those $2000+ customers
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Yeah, I read about that before. Why does service get to bill sales retail? Seems like they would charge just the true cost of parts and labor. You guys get a $50 part and you have to pay $75... doesn't seem logical.
I'm dead serious.
Yes, there are certainly situations where you can feel like you're being gouged and yet are compelled to pay an unfair price. This includes things like supplies you need in an emergency situation (food, water, fuel) where someone is taking advantage of a natural disaster and they have a "captive audience."
Buying a car is not one of those situations. You freely choose to pay a given price and your impulse to buy, even if you think the profit is unfair, belies your feeling of being gouged. You had the option to walk but did not. The excess profit factor is irrelevant and your action clearly indicates that it was a fair transaction.
tidester, host
SUVs and Smart Shopper
Because the store retains the full markup on parts and service, (seperate profit centers), and doesn't have to pay commission on the difference. And besides, those silly sales people would probably just give it away anyhow.
Most dealers parts and service employees are paid on some sort of incentive program anyway. Its hard enough to get them to work with the sales department without a discount....
Thanks isell, but I was only joking. It has been about 3 years since I have seen my doctor, so I will be calling soon for a check-up... been putting it off.
Your emotions have no bearing on whether you are being ripped off. Your willingness to succumb to them proves you weren't interested in what profit the dealer may or may not make and it's a bit incongruous to complain after the fact. If you agreed to a price then you had to have thought it was a fair deal at the time. You can change your mind later but what counts is what happens at the point of sale.
tidester, host
SUVs and Smart Shopper
We need to get some bigger grosses for your boys!
Lets say you do a deal where you are able to under allow on the trade in -and give the guy a mini on the deal.
If all deals stand on its own, then is the salesman getting a bit screwed on this one, as whoever sells the trade-in is going to reap a better commission?
Emotions are interestingly viewed in individual cases. I was always surprised by Janet Leigh in the movie PSYCHO when she traded cars in less than five minutes. Here is a lady "on the run" after stealing her employer's deposit on a Friday afternoon. When she rushes into the dealership to trade her Ford Fairlane for a Ford Galaxy, she actually negotiates for about a minute on the lot. I thought that was so cool. Even Alfred Hitchcock must have realized that you don't just pay MSRP. :P Actually, she was buying used from a used car dealer---or so we were led to believe. One thing is for sure. She was definitely a cash customer.
Richard
Richard
2013 LX 570 2016 LS 460
If you underallow on the trade but discount the vehicle by more than you normally would, that doesn't change the ACV on the trade. Here's a scenario:
Trade ACV = $20,000
Dealer Cost = $18,000
Trade Allowance = $18,000
Dealer Selling Price = $16,000
They showed a more substantial discount on the new vehicle, but held on the trade. That doesn't change what the actual ACV is on the used vehicle. When that vehicle is put out on the lot, we still have $20,000 + refurbishing and service costs in it.
Now, if your used car manager really steals a vehicle and leaves the low number as an ACV, then the next guy selling that vehicle can really get a nice commission. You might argue that the salesman got screwed there.