Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Assuming the car was bought at auction, the wholesale price is just the starting point of what the dealer has into a car. From there tack on auction fees, transport and the cost of reconditioning. From there add some profit for the dealer. Am I missing something volvomax?
My time is very valuable. Also, my pre approved loan doesn't allow me to purchase from a private owner.
Personally, I'm not really concerned about how much the dealer had to pay. i.e auctions, transportation, reconditioning etc. I'm not concerned about how much profit the dealers is going to make. I'm trying to get the best price that fits my budget.
I read that KBB and Edmunds wholesale numbers, that the dealers usually pay below that anyway. Also I read that dealers make more money selling used cars than new cars. The dealers make more profit off of them. Which means the buyers are usually paying more for used than what they are really worth.
Thanks
Where to begin?
Well, for one thing, and probably the most important, you have some sort of recourse if a dealer sells you a bad car. Not true of private party. I imagine this may vary by state, however.
Second, as another poster pointed out, financing could become a problem. And places that I have seen private-party financing through charge a higher rate, so there goes your savings.
Third, the difference between private party purchase price and dealer purchase price is not significant, if you do your homework and find the right car at the right time. Not to mention, dealers are more often more realistic about negotiations and profit, as opposed to many private sellers who think they are dealing in their car's weight in gold. In other words, they are out of touch with the market ("my '91 Corolla is a soon-to-be-classic, dammit! And this pea green paint with yellow interior is a rare and desirable combination!"), whereas a dealer is IN the market and not emotionally attached to their product (unless you find a whacko).
'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
Older cars are usually cheaper if you buy private party, although you do see the nutballs asking way to much for their "classic" car.
You got that right. I'm more shocked by some of the numbers I see on cars for sale by private owners, than by dealerships. I use to buy private party all the time... now I believe dealership is the way to go. Better price and better product.
I've gone to see cars that were rust buckets that the sellers said were in "Good" condition, and others that were way underpriced and in fine condition. I bought my Miata used on the spot, and it passed inspection on the first try, and I still have it 8 years later. Her price was 50% below KBB, which I realize is inflated, but still, she was asking *way* below market price. I guess I got lucky.
It can go both ways, but it's very inconsistent.
2) I haven't financed a used car in more than 25 years so that's not an issue for me.
3) Very true point. Many (particularly late model) private sales never happen because of unrealistic owner expectations - those cars end up getting traded.
It can be very hard work to find a decent deal privately and damn near impossible if one is seeking a particular year/make/model. It becomes much easier if one has some flexibility.
The big thing with me is that I want to meet the owner. S/he knows the car and can answer questions a dealer can't. Unless a car is approaching 10 years old (or older), I'm not going to be interested unless the seller bought it new.
In my state at least, this is just not true. First, if we ARE talking about simple misrepresentation, the burden of proof would be on you, the buyer, to show that the seller knew they were misrepresenting.
I assume what the lawmakers feel is that a dealer should know better. So if the car falls apart when you drive away, you have legal recourse. I'm not talking about warranty. For private party, it is "as is where is" and not a darned thing you can do about it or prove that they intentionally ripped you off.
As for the financing, you weren't talking about just you when you stated "buying used from a dealer is for suckers." That was an insult you put on everyone who doesn't buy private party.
'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
Midwest.
Looking for fair trade in value.
Thanks
I can only infer that you think paying more at a dealer is fine because the financing is easier or cheaper. That's fine - we disagree.
Used cars offered by dealers in Ohio are sold either with a warranty or "as is." There is no middle ground that somehow makes them more liable than any other seller. Representations by dealers are typically pretty limited if for no other reason than the selling dealer often doesn't have specific knowledge of a car.
Not so with private sellers who, in addition to having such knowledge (typically freely offered to a prospective purchaser), also may make written representations in ads or emails.
Unfortunately, there are sellers who do misrepresent vehicles. Luckily, I've never been victimized by one.
I have bought from private sellers before, and my key to success was to know exactly what model/edition car I wanted, and then go and look at a bunch of them - either at dealers or private individuals. By the time you look at the fourth or fifth one, you get pretty good at knowing what to look for. For example, some years ago I was looking for an Eldorado... I quickly realized that the doors on the ones that had been hit didn't quite line up inside the frame. You don't catch that kind of thing the first car you look at.
I can only infer that you think paying more at a dealer is fine because the financing is easier or cheaper. That's fine - we disagree.
Really? You think saving $500 on the purchase price by going private party and spending that $600 on increased financing rates is better? Well, to each his own, I suppose.
Now, I don't know Ohio law, of course, but just make sure you aren't confusing what a dealer states vs the true law. Here in NJ, dealers put stickers in the window that has "Warranty" and "As is" checkboxes, but just because "As is" is checked, does not mean anything when it comes down to the law. It is kind of like those cases where a person signs a document saying they won't sue if they get hurt bungy jumping ... but then they get hurt and win a lawsuit.
Anyway, we are sort of off topic here. But to pull it back in a bit, I do believe selling a car private party is better for the seller rather than trading it in ... up to about $10k. Beyond that, the tax advantage of trading it is just too big to ignore.
'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
But that's ok - I disagree with just about all of your premises on this topic.
No need to be insulted by...my opinion. It really doesn't carry much weight!
The proof is in the puddin.
Now, to be clear, I doubt you "disagree" with my premise. At least, that's not what you mean, I don't think. As it is a fine premise. You may, however, doubt its validity. So I present the hard numbers for your consideration.
Right now, Capital One is offering a 6.95% used car rate, if you buy from a dealer, for 37-60 mos. If you buy privately, however, the rate is 9.25%. This means, if I were looking at a $15k car, for example, I would need to get that same car for at least $650 less from a private party in order to get a lower payment at that higher rate.
NOW, when it comes to buying used cars of this value from a dealer, I have consistently been able to get them for $1500 over trade-in value. That means that, on the $15k car, the trade-in value is $13,500. In NJ, with our 7% tax rate, if I were to trade in a $13,500 car, my true value with the tax break is $14,445. SO, nobody with half a brain is going to sell that car private party for less than $14,445 ... which, as you can see, is only $555 less than I could buy it at a dealer for. So, yes, in fact, the math shows that the private party payment would be higher than the dealer payment.
Does this apply to you? No. But it does show that it is a sound premise and something that every used car payment buyer should keep in mind.
'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
This is located in the Philadelphia suburbs.
2005 Toyota Highlander 4wd w/3rd row seat.
v6
60000 miles.
The color is Indigo Ink (dark blue)
Options are Power driver seat, cold weather package, tow prep package, daytime running lights.
The car looks like it was used to transport 3 young kids. It's pretty thrashed inside. Small dent in the side, and has its fair share of scratches.
The lease is up on this, and I'm 15K over the limit. I'm hoping that this is worth the 18,000 residual price as a trade in? What do you think?
Thanks for any help.
In my county (Suffolk County, NY), where the sales tax rate is 8.625%, the "tax advantage" on a $10K trade is $862.50. But chances are pretty good that I can get at least $11.5K for that car if I sell it privately. It's been my experience that the spread between trade-in allowance & private sale price almost always exceeds the sales tax savings.
I also like the clarity that comes with separating the disposition of my old car with the acquisition of the new one. It's much easier to negotiate the new car purchase price when you don't have to negotiate the trade-in allowance at the same time.
Still, I will say this: selling a car for $10K or more privately can be tough. That 5-figure asking price represents a financial & psychological barrier for many would-be buyers. So I can't blame you if you'd rather trade your car in.
My solution is to keep my cars long enough for their resale value to fall below the $10K line.
FWIW, every once in a while I search for Miatas on-line and the best deals I find are often from dealerships. I'm not sure why private party values on those haven't dropped lower than dealer prices, maybe I'm looking at just a small sample.
In the described condition its probabably a $13-14000 car.
I just bought a 10 year old Miata from a dealership. I really wanted to buy private party figuring I could save a few bucks and get a nice history. The 3 private party Miata's I looked at were in worse shape than the dealers and they wanted more money. One guy said I paid $X.XX a 2 years ago and I wold like to get my money out of it. Hey , it's not my fault you over paid & bought it in the springtime.
I think some sellers look at NADA and ask that, with no other research.
I thought that was funny, but I might as well do a little bickering myself:
I guess my opinion on buying used cars from dealers, or private party, is it "all depends". But, with relatively recent vehicles, many more are gonna be at dealers than private sellers. So your chances are better. And if you have a high value trade, it's just way easier to do the transaction, & you may come out ahead $$-wise at a dealer, + if they're professional, PROBABLY less BS too.
Of course, there are some cars like vintage bmw 2002's that are gonna be mostly sold by private sellers.
FWIW, I bought 3 of my last 4 used vehicles (in the $20-$35K range) at dealers.....& got very good prices both on the "New" (used) car, & the one I was trading. AND saved the potential nightmare of selling a used car myself, + the sales tax savings, etc......YMMV.....
It was a pleasure to do business with an honorable gentleman. He got a bit more than trade (and sales tax credit) and my sister did better than buying from a store.
Win-win for both parties.
2004 ford focus 4 door sedan ZTS
Engine: 2.3 liter, 5 spd manual
Mileage: 42k
Color: light green(tundra)/tan
Major Options: moon roof, heated seats/mirrors, abs, factory alarm, alloys, pw/pb/pl
Condition:
exterior: left front scratched bumper in a couple of places, 2 small dings in fender, one wheel scratched(not curb rash). rest of car looks fine(regular wash/wax).
runs straight on the highway.
interior: very clean. mostly a 1 person commuter.
Tires - new @ 39k
Brakes - fronts @ 30k
Maintenance: dealer every 5k
Other: other repairs left front strut and hub @ 4k. dashboard cluster replaced due to trip odometer stoped working. also hit a piece of firewood in the road @32k and had to replace the radiator cooling fan assembly.
Some experts recommend having a car inspected even if its CPO'ed.
2006 Nissan Titan King Cab SE 2WD
Red
18,500 miles
factory tow package
Thanks, Sam
142,000 miles
Brown/charcoal
Car is in overall good condition. Paint is starting to oxidize in a few small areas. (Should I spring for a Maaco special?)
Tires are almost new and all maintenance is up to date. Just replaced the timing belt and water pump.
Thanks in advance guys.
Tony
Winston Salem NC
2007 Hyundai Veracruz SE
3.8L V6 6sp AT
FWD
5K miles
Blue Titanium/Gray
Major option: Premium package (includes sunroof, leather seats, heated seats, back up sensors, and upgraded sound system)
Like new condition.
One catch with Hyundai is the 2nd owner only gets the 5/60 portion of the warranty. That hurts resale on almost new models like that.
From the auction reports, I'm thinking @ $15,000
This is actually a dealer demo. MSRP is 32,170, invoice is 30,138. Dealer has a sign touting significant discounts. I have been quoted 30,306.69 OTD. That means price is about 29,900 plus TTL minus the 1,000 rebate. Not horrible, but as soon as it is driven off the lot it is a year old car with 5K miles on it. That's why I asked the question here. I was expecting the discount to be a little more significant, and I have a suspicion the dealer is getting some backend support from the factory on these '07's.
What does that mean? Are these new cars or used cars?
Most likely Rental Cars.
Could be Factory Exec cars.
In your case, no doubt the dealer is getting some rebate money on the new 07.
These rentals will probably hit the lot @ $27,000.
trying to look into the future, i know 'a bad idea', by looking back, how about if it was an '03 with 55k miles? TIA.
Probably because the daily rate is too high for the unwashed to rent them
However, I wouldn't pass up a regular rental IF the car checks out ok AND it is a CPO car.
I had a Taurus with 7k miles that smelled like an ashtray. It would be hard to purge that stench.
Both my son and I have asthma so I would not buy that car at any price.
Honestly, the odds are just as good with a regular used car.