Used prices on cars with less than 1000 miles - and what it means
gus_smedstad
Member Posts: 5
I'm currently looking at the alternatives to buying a Panamera new, but it seems like a topic with much wider implications. Some of which are surprising to me.
In particular, I've been looking at very low mileage cars, which are essentially new cars. I've seen a few advertised for sale by dealers than have 200-300 miles on them. Clearly, someone bought or leased the car, drove it for a month or so, and then sold it back, broke the lease, or defaulted on the loan. Something.
What gets me is that I'm looking very hard at one car in South Carolina that's been for sale by a dealer for a couple of months. It's been reduced from $109k to $102k to $100k. It has 264 miles on it, and while they don't list every option, they make a point of saying MSRP was $117k new. Now, whether those prices still seem astronomical to you or not, consider what it means.
If MSRP was $117k, I'm guessing the original buyer paid maybe $110k if they bargained hard, right? Yet they're offering it for $100k now, and presumably expect to make a profit at that price. Surely there's some room for negotiation in that price, dealers don't put used cars up for "take it or leave it" prices.
Doesn't that mean that they paid $90k or so to take the car back? I'm guessing, part of the reason I'm bringing this up is I'd like to know exactly how much negotiating room there is, I'm not really sure where to start. It sounds like the original owner paid $20k to drive the car 200 miles. OK, $15k considering the tax credits on an E-Hybrid, but still a lot of money. If it was a lease, it's the same situation - the lease termination fee had to be in the same ballpark.
Comments
I think you may be going about this in an unproductive way. What the dealer paid for it is irrelevant to your negotiations. What is relevant is that you have a number in your head that you'd be happy to pay for the car.
Now is this car being sold as new or used? If new, then a couple hundred miles is not unusual at all. If used, that is strange but I have seen such things happen---a close friend of mine's wife ordered a new BMW convertible, drove it a few days and confessed "I'm just not a convertible kind of woman". Hubby was furious and he took about a $6,000 hit by selling the car privately.
What are your concerns? At 264 miles it could hardly be a "lemon", or wrecked. What's the dealer's story on the car?
I thought that was established as a way to ensure that you pay the highest price possible for a car.
What the dealer paid is just as relevant to negotiations as knowing true dealer cost when negotiating the price on a new car. Which used to be the invoice price, but generally isn't exactly now that invoice prices are so public. The point to the True Market Value number on Edmunds is knowing what the realistic negotiating range is, rather than just making up a number yourself.
Unfortunately, the True Market Value isn't always available. Since the Panamera in question is a 2014, despite being used and sold as a used car, it's not available in this case. Without it, and not knowing what the dealer likely paid, it's hard to know where to start negotiations. Start too low, below his actual cost, and he could easily see me as a low-baller who will never come to a price he can accept. And thus not worth the time to continue a good-faith negotiation. I know my personal policy with people like that is to ignore them, since engaging them is not productive.
It also matters because I'm looking at a used 2014 being sold by a private party with 600 miles. Knowing the probable trade-in value of the car lets me know where to start negotiating with him as well. Though honestly, I think that guy is in trouble, because his ad mentions a lease, and I think he wants someone to take over the lease, not buy the car, because the lease termination fee is going to be hefty.
It's also fascinating to me, regardless, that the dealer must have paid so much less than what he sold it for a month earlier. The aphorism that new cars lose a big chunk of their value the moment you drive one off the lot is more true than I knew.
TMV and invoice info still won't tell you what the dealer paid. There's all kinds of bonuses and manufacturer programs that you really can't get much info on (and don't forget holdback on most cars - but not Porsche). Part of how great a deal you get just depends on how much of a grinder you want to be and how much interest the car is costing the dealer to sit on the lot every month.
As far as low miles on a new car, there are some other reasons besides the owner just trading a new car in and taking a hit. Sometimes a car is delivered but credit doesn't work out (spot delivery) or something else happens that causes the dealer to unwind a deal either at a loss or by making some accomodation with the buyer (like swapping for a different car).
The usual depreciation on a new car runs around 10% for the first year, but a Panamera isn't a usual car.
I talked to the dealer. It was pretty much as you said - they have the car because the original owner saw a 911 on the lot he liked better, and talked them into trading one for the other. Not sure which trim of 911, the salesman mentioned but I didn't retain it.
All that matters is that the car is a good deal for YOU. What the dealer paid for it doesn't matter. He's not going to tell you anyway.