Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/22 for details.
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/22 for details.
Options
Any Questions for a Car Dealer?
This discussion has been closed.
Comments
When that happened, since it went through the car dealer's insurance, what happened to you? So you did not have to pay for the damages, but did you have to report the accident on your record to your insurance? Did your rates go up at all? Or is it all on the dealer's side?
I am strongly considering buying a new BMW (not that the brand matters), and since it is a big decision, I naturally am looking for a lot of "seat time" in deciding which model, engine, etc. So I don't feel like I'm wasting one particular salesperson's time, I "spread" my time around, and have been working with three different dealerships/salespeople.
Would you consider that terribly rude?
2024 Audi Q8 e-tron - 2017 911 C4S - 2025 BRZ - 2023 A6 Allroad - 2024 Genesis GV60 - 2019 Cayman
If I were in your position, I would find 1 salesperson that I felt comfortable with, and then explain that I am wanting to make sure I get the combination of features that best suits me. I would also try to hammer home that I am not just a joyrider, but a serious buyer that is trying to find a car that I will be happy with.
You said that the brand isn't important, but in this case it kind of is. You are looking at a BMW, not an appliance car (Accord/Camry/Sonata). A lot of BMW drivers are simply after the logo, but many are also enthusiasts.
I would think that any reasonable salesperson would understand this, but in return you should show respect back when it comes time to purchase. If the salesperson has been patient with you and easy to work with, don't try to keep grinding and grinding him on the price (in other words, don't go buy across town from some other guy that offers you the car for $200 less).
For insance when I walk onto the lot, how do you determine that I have a bank account with 8 zeroes in it?
My boss has a Bentley, and he mentioned going to dinner with his car salesman, is this normal?
Thanks.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
I got a ticket. I reported to my insurance, as I was not sure what was going to be done. Insurance co handled it from there. My agent told me dealer wanted to claim that this was like a rental car and therefore me or my insurance had to pay. He told them no...there is not a rental agrrement, it is the same deal as if I allow someone to use my car and they have an accident then my insurance covers it.
I felt bad about it at first, but not after the dealer was kind of a jerk about it...according to my agent.
My insurance did not go up for the accident as there was no claim against it. I did get a surcharge for the ticket.
It can vary from state to state I believe. In MA, your insurance covers you in any car you drive. You have an accident in a loaner, demo, or neighbor's car, then your insurance covers you. I'm sure the dealer carries insurance for "uninsured" motorists should someone without insurance go on a test drive.
I'm coming up on the end of lease for wifes car. Purchase price is about $13.7K; Edmunds TMV says it's worth about $15.5 retail road, I'm checking with Terry to be sure.
Thing is, I'll get dinged for sales tax on $13K if I buy it outright and resell - that would cut profit in half. I'm going to lease a new car for wife but different store. Do you guys think it's likely the new-car store would (for a fee) work the paperwork for me so I don't pay the sales tax? In other words, they "buy" the car as a dealer and resell immediately to a buyer I bring in with me.
If so, what do you recommend as a way to go about this?
Thanks a ton,
Squirrel
Can you buy the car and just not register it?
Fact is, I would have been in much deeper trouble had I not done anything at all.
This is possible but you have to remember, you probably won't find anyone willing to pay you full retail for it.
What kind of a car is it?
Of course, this was a fairly new car (1 YO Scion) with low miles. The Audi guy suggested it, but only because I would be buying a new car from them. i can't imagine any dealer doing it otherwise.
On my car, it would have shown as "balance of factory warranty" anyway, so I don't think they felt there was much exposure.
Not sure if they would have charged any fee for paperwork, but it would make a large difference to me 9tax credit for trading in), which of course is why the offered to do it.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
At the luxury end we are used to having people take time to buy a car.
Volvo people are especially cautious.
It's not unusual to take a couple of weeks or more to sell a car
Car and Driver mag just had an article about how to get a test drive in an expensive car. It's not in the current issue but maybe one or two back. It was pretty interesting as the story gave advice and commentary from a car salesman's POV.
Gist of the story was, do what it takes to make the car salesman comfortable with you and feel confident you are a real potential buyer. I would imagine that to get a test drive in a $300,000 exotic you'd have to be known as someone with the means to buy a car like it (pro athlete, previous customer, big shot exec, etc).
Side Note: A buddy and I went to the local Lambo dealer here in ATL to peep their toys. Talked to the internet sales guy and he showed us the inventory, hidden in the garage. He told us he took a new Gallardo in this wild acid orange color to the Atlanta Falcons training facility to see if Michael Vick would be interested in it. A lot of players checked it out incl. Vick but the sales guy didn't get a commitment from any of the players (yet...). I took from this that if you are someone who is a potential Lambo customer, the cars come to you for test drives, you don't have to go to them.
If you're a repeat customer, your chances are better. We have some customers who could walk in and get an overnight test drive on anything on the lot.
We had a situation a few years ago when our sales manager drove a 'Vette 300 miles to the customer, did the deal, and came back. The next week, he went back up there with a 2nd 'Vette for the guy's buddy.
I wouldn't be suprised that if your customer base is buying $100K+ vehicles that part of your normal business development is keeping in touch with existing clients. This would include phone calls, notes, e-mails, and meals.
At that price point, you are more than a sales rep. You're a confidant and I presume in it for life.
Then there's the lady who said she was a friend of a local Ford dealer, driving a new Freestyle with dealer plates on it to test drive several Subaru models....
For insance when I walk onto the lot, how do you determine that I have a bank account with 8 zeroes in it?
My boss has a Bentley, and he mentioned going to dinner with his car salesman, is this normal?
Thanks.
It's a funny thing. Usually the people who ask for test drives have no ability to buy one. I usually respond with "We will gladly sell a car with final delivery contingent upon a test drive". That usually scares the test pilots off. What some people don't understand is why we don't hand out brochures. I don't even order brochures.. the factory brochures are little more than glossy books with color chips and pictures of options.. and they are beautiful, and $100+ each our cost. I could easily hand out 5 of those a day to tirekickers who wander in.
So who really does get a test drive.. someone who is real, and someone I know is not playing games. Not to sound rude, but I can usually tell who is real and who isn't. Take the guy that comes in with one of my customers... I'll tell him that he's gotta experience the car. I have a customer right now who is getting a car from us, he was sent over by one of the people who runs a big leasing company. He absolutely got a test drive. If I think you're real, I'll offer you a test drive. But let's face it.. It's not like you aren't going to like the car
As far as dinner and that, a lot of our customers are friends of ours, these are people who pop by when they are in the area, people that I will likely see this weekend at the Cavallino classic in W Palm (Those customers of ours who also own Ferraris), etc. Our customers, by and large, like to feel comfortable at our store, we're much more than a car dealer to them. Our owner has customers that are some of his closest friends.. one of our customers recently had a baby girl, we were among the first to hear the good news. Remember, the extremely vast majority of our customers are real car enthusiasts, and are lucky enough to be able to buy a car like a Lamborghini. This is a hobby for them and we share the same passion, so it's really an awful lot of fun to work where I do. At the moment we're working on some track events for the spring and fall, that are going to be exclusively open to people who bought cars from us. We try and do events on a monthly basis and the turnout is great.
If you're in the area and you DON'T come in and say hi I will be annoyed at you sir.. and you may miss a fun ride...
Oh, and I have yet to see a Murcielago get test driven on my watch.
Where do you put a baby seat in a Lamborghini? My guess would be you have the chauffeur trail you in the limo.
But then , how does he keep up?
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
In any case, I will be in your neighborhood (by myself even, no family) in early April (whenever the Mets open at home) so I will make sure to swing by.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
They did recommend taking it into local Nissan store and seeing what they would buy it for. Terry said my purchase price is less than auction value so perhaps a store will buy car from me for less than retail but more than my payoff and I make a couple bucks.
Any thoughts - agree, disagree, will someone do it?
Thanks,
Squirrel
This can end up being a "sticky" tax situation down the road for the dealer .. that's why few do it and most don't ...
Terry.
Ehhhhh no we all enjoy our jobs and don't want to get fired and/or have the state come after us.
i'm sure there's a a logical reason, but i don't understand.
i'm sure there's a a logical reason, but i don't understand.
It depends on the state I guess.
For instance, here in MA you pay a 5% sales tax on both new and used vehicles but you also get the tax credit when you trade.
If you buy your vehicle for $30K you pay $1,500 in taxes. You sell your current ride to a friend for $10K and he pays $500 in taxes for a total of
$2,000
Now let's assume the dealer lets you do an in and out. Your net purchase is $20K ($30K-$10K) and you pay $1,000 in taxes. Your friend nows buys from the dealer at the $10K and pays the same $500 in taxes for a total of:
$1,500
You save $500 and your friend's situation is improved by the warranty the dealer is obligated to provide.
Some people see it as tax avoidance - others as tax evasion.
I just look at it as the dealer taking in a trade in, and having a buyer already lined up. No different than if the seller never heard of the person buying the car, since the dealer still takes possession of the title before selling it to a new owner.
Of course the intent is to avoid saying one set of sales tax, but thee are plenty of people whose only job is exactly that!
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
My guess as to why dealerships don't like to do this is that there is no profit in it. Actually seeing that they will do the paperwork and such it would be a loss to them. Not to mention any liability they may take on from handling the transaction.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Call me cynical, but I am from NJ, where the art of "pay for play" was perfected.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Ehhhhh no we all enjoy our jobs and don't want to get fired and/or have the state come after us.
You could have very well done a "courtesy trade." Nothing illegal about it. The dealer will usually charge a fee to do it, but many dealers do it all the time.
Some posts from here on Edmunds:
Courtesy Trade 1
Courtesy Trade 2
Courtesy Trade 3
I'm not a tax expert but I do believe a court would look at the intent of a 3 party transaction.
IMHO, I think a court would consider it tax evasion as the originating party and destination parties are related. The only reason for the trade and sale was to avoid the tax. I can't see how a court would accept any other reason for 2 related parties to conduct a transaction through a third party other than to avoid the tax. Adding the dealer complicates the transaction - the only benefit is avoidance of the tax.
OK your not I am, you would be hard pressed to prove this as tax evasion since if the car were sold to another person who is unknown to the original owner at that price the same tax consequences would happen.
However one must look at what reasonable prices are for the trades. Say in the example given the current car being traded between the two friends was a rusted out Yugo with a blown engine then you would be in a grey area. That is because you grossly misrepresented the value of the car but either way the state gets the same amount.
Now lets say in the example the dealer gives a 10K trade in, your friend buys it for 5K and someone slips 5K under the table to the dealer then you have tax evasion.
I can't see how a court would accept any other reason for 2 related parties to conduct a transaction through a third party other than to avoid the tax.
Courts all the time recognize dealings done to avoid taxes. There is nothing wrong with avoiding taxes, people do it all the time and people make a good living helping people to avoid taxes.
Now if the court said it was done to evade taxes thats a whole other kettle of fish. Tax evasion is illegal and the last example I gave you is an example of it.
Now what started all of this was about buying the car at the end of the lease and turning it around for a profit. thats a whole other discussion. But FWIW i don't think it changes the tax situation one iota.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
OK your not I am, you would be hard pressed to prove this as tax evasion since if the car were sold to another person who is unknown to the original owner at that price the same tax consequences would happen.
That's true but the key here is that the parties we have been discussing are known to each other. If they were unknown, then I have no issue. But even if you bring a buyer you found through an ad to the dealer, then he is no longer unknown to you.
Now if the court said it was done to evade taxes thats a whole other kettle of fish. Tax evasion is illegal and the last example I gave you is an example of it.
And that's all I was saying. If a court determined it to be evasion, then it's illegal. Is an in and out illegal? IMHO yes if the intent is to evade paying sales tax.
But in the real world, it's such a small amount that most tax collecting agencies wouldn't bother chasing.
There seems to be a fine line between tax avoidance and tax evasion.
oh, and the dealer would be out some money for making the vehicle road worthy.
Sorry thats not the key, the key is what would have happened if it was an arms length transaction? So unless you can prove that there were improper transactions there is no wrong doing.
And that's all I was saying. If a court determined it to be evasion,
The problem is you will not find a court that would call it evasion, not in the U.S at least. In similar cases it was found that deals like these were not evasive.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Well why didn't you just say so up front?? It would've saved lots of typing!!
But IMHO - I repeat IMHO - it's fishy. If I were a dealer, I'd avoid it. It's not ethical.
Person leases a car. Person fulfills their obligation.
Person buys the car (add 6% sales tax) and sells it to Johnny Mercedes. Johnny pays 6% sales tax.
-OR-
Car dealer buys the car from Leasing Co.
Car dealer sells it to Johnny Mercedes. Johnny pays 6% sales tax.
There is nothing wrong with the 2nd scenario.
I understand why a lot of car dealers don't want to get involved; I think we heard the list of possible complications.
But if it's properly done -- i.e. posession of the car passes from the Leasing Co. to the car dealer, and then to Johnny -- then it isn't illegal. Heck, it COULDN'T be illegal.
What is the crime here, aggravated turnover in the first degree?
-Mathias
You're mixing up -- I think -- two different things.
#1 is that in some states -- not MI where I live -- you pay sales tax on the difference between the trade-in and the new car.
#2 is that if you buy out your leased car, you pay sales tax on the purchase price.
-------------------
#1 does not apply, as you cannot "trade in" a leased car unless you own it, and if you don't buy it from the leasing company, you DON'T own it.
The tax savings comes in because if the *dealer* buys out your leased car, no sales tax is owed on that purchase. The new buyer pays the tax when he takes possession.
The tax being avoided is the double sales tax on the purchase price of the leased car; first by the person who leases, then buys the car, and AGAIN by the person who buys the car from him 5 minutes later. Avoiding THAT sales tax is not illegal, if all the i's are crossed and the t's are dotted.
There is no way, I don't think, to "trade in" a leased car and take the sales tax break. To "trade in" something, you have to own it first.
-Mathias
Anyway, I took the car back after the service and the next morning noticed a deep dent on the front bumper that was not there before. I immediately took the car in and complained, prepared for a long and hard battle.
To my surprise, the dealer immediately agreed to fix it in their body shop and gave us an Explorer as a loaner. All this for no charge. And, a couple of days later, I got back the Lexus, all washed and clean, sans the dent.
I am, of course, going to give all my business to them from now on, but wanted to know if I could do something else to return this very nice gesture. Would writing a letter to Toyota help?