Any Questions for a Car Dealer?

rivertown · March 2003

It seems to me like the car market is marshmallow soft - the war, the economy, and reduced incentives. Not much you can do to change those facts.

The guy who's PO'ed about not qualifying for the best rate and is gonna buy down the road? He's not gonna qualify there, either, is he? The guy who's gonna beat your price by $50.00-$100.00 down the road? Sorta hard to do if your price is right to begin with, isn't it? Especially if he's got pools of hooey to wade through before he even gets close to your price.

Facts is facts, and decent treatment is decent treatment. Got the additional prob of resetting expectations these days? Makes sense to me. Do it well and with decency, and count on your competition to help you out by acting like horses' haunches.

bigorange30 · March 2003

rewster · March 2003

Is it now a new tactic by auto dealers to only offer wholesale, auction prices on a trade-in? I'm trying to buy a new car (Audi or Volvo), and get a good, fair price on the car. However, when it comes time to trade-in my '98 Avalon XLS in good condition, all I get is "look at the auction prices, that's what we'll give you". This is several thousand less than NADA or TMV values, and money I would throwing away.

So other than selling it myself (I'd be willing to accept the NADA trade-in value), what options do I have?

audia8q · March 2003

Your short list of possible cars is a good list. The only one I would toss out is the Mitsubishi. They are not in the same league as the others your considering....sub par actually.

good luck

zueslewis · March 2003

the short answer is "yes". Since most buyers are looking for invoice price (wholesale) on the new vehicle, that's where the dealer starts on the used vehicle. It makes no fiscal sense to sell a new vehicle at $200 over invoice and allow anything higher than wholesale on the trade - it's financial suicide.

You have to determine whether you're negotiating or not. If the dealer is firm in the offer, or doesn't take you seriously, look in the mirror and see if you're serious, then assess how involved you want to be in this process.

robr2 · March 2003

If the dealer can go and buy a similar car to yours at the auction for a couple of thousand less, he has no interest in giving you more for your car unless you're overpaying for the new car.

And as others have said: the NADA, Edmunds, KBB books don't buy cars for the number they list. They are guides only.

Other than selling it, you can donate the car to charity and take the tax write off.

bigorange30 · March 2003

I feel a can of worms being opened up on this one. I haven't followed it closely enough to know whether it is a new tactic or not. I have gotten approximately NADA or KBB on the trades I have done but it has been a few years. I had an offer to do one at NADA at a Lexus dealer in 2001 but turned it down and decided to sell it on my own. I got hammered by these guys last time this came up when they said the book values mean nothing anymore. Maybe they used to and maybe that is the reason for my experiences. I don't think that would explain my 2001 experience though. Stick to your guns rewster. Sell it yourself if you can't get a dealer to give you book value.

rivertown · March 2003

I saw you posted on 'Real-World Trade-In Values', too. Good move.

It may be that your only other option is to sell it yourself, and even that might not help a lot. A soft market is a soft market.
I've had good luck in the past selling beaters with a newspaper ad; priced at 'wholesale', they've gone the 1st day the ad ran. Your Avalon's no beater, though.

tk865 · March 2003

Sounds like what I say.... Sounds like you got a "straight shooter" who would rather be upfront than have to argue over the trade. Especially with the used car market so soft, more cars than usual are going to auction. Yes, the dealer will take your trade, and put a sticker on it about 5K over what he gave you. However, facts is facts, and he won't GET that much. In this market, he's lucky to get $1000 over wholesale for it. So, after recon, he clears about $7-800, plus his doc fee. Now - here's the fun part - if he doesn't sell it, it goes to auction, where unless it's a hot item, it may not even bring book auction value, as dealers are picking them up for a song. FWIW, I've very rarely seen an ACV around NADA trade. "Fluffing the trade" on a 4-square has become even more prevalent as ACV's have been going down. A lot of local dealers have pumped up thier addendum stickers so they can show more for the trade. There's a lot of shady stuff going on to keep you from knowing what you're REALLY getting for your car. My advice? Sell it yourself. There's a great market for those cars in the private market, as it's mainly older people who would much rather talk to the guy who's driven and serviced the car the past 5 years than a saleman who can only describe it as "clean!" "lo miles" "best buy!". Hey - I work in the biz, I' never have, and never would trade in a car. ALWAYS sell your car. If it sits for 2 months and doesn't get a serious offer, you know a few important things:
1. You want too much for the market.
2. If you really and truly "MUST" have a certain figure to trade, maybe you should just keep driving your current car a while. I've found a $150 detail can make you fall in love all over again.

isellhondas · March 2003

The others are correct. Why would a dealer give you more for your trade then he could buy it for at the local auction?

Avalons, although good cars, have never been a hot item either as new cars or as used.

Kinda like the car nobody remembers Toyota even made.

In your case, I would suggest running an ad in your local paper.

snowful · March 2003

I recently was negotiating for a car, but it was not in stock at the dealership. The only car with the exact specifications I wanted was in Kansas (I'm in OK). The Kansas dealership decided not to trade their car, so the next closest was Nebraska. Now we had already started negotiating on the car in Kansas, but when we couldn't get it, the dealer said I would have to pay a little extra to get the car from Nebraska since it was further away. Is this a bunch of bs or does it really cost a lot to transport a car from 2 states away?

robr2 · March 2003

...in the freight transportation industry, it costs more to ship something the farther it has to travel. If they are sending a driver, he has to schlep farther and is most likely paid by the hour - hence, yes it does cost more to transport a car farther.

Put it another way. Your boss asks to travel to Nebraska now in your own car for a meeting rather than Kansas as planned, but he'll only pay you to travel to Kansas. What would you say?

bretfraz · March 2003

Transport fees are about miles not states. It doesn't matter how many states away something is. From Chicago you can get to any of five states within a few hours drive.

Transport fees can be around 50 cents/mile but I think the norm is closer to 30 cents/mile. Go to Mapquest and run the numbers. This would be on a car carrier (you've seen them before delivering cars to dealers). If you want it flatbedded the price goes up. Ya want an enclosed trailer? Bust out the Gold card as that will be expensive.

masspector · March 2003

I think I am using the right term, but you guys will know what I mean. My question is: How does a pass through trade in help the new car buyer without putting the tax onius on the buyer of the trade in?

For example: Buyer buys new car and pays tax on full sale price. Buyer then sells trade to private party and the price is $5000. Buyer does not charge buyer of the trade any tax. Buyer of the trade pays $5000, period.

My interpretation of the pass thru is that the dealer takes the car as a trade, lowering the new car buyer's price for tax purposes by $5000. Buyer saves the tax on the $5000 difference. But the dealer has to charge the same tax when the trade in buyer buys the trade car from the dealer at $5000. Trade in buyer now pays $5000 + tax. I do not see how this is a benefit unless you have a really dumb buyer that assumes they will have to pay sales tax if they buy the trade car from you as a private party sale.

robr2 · March 2003

I presume most states would charge the used car buyer sales tax in either case.

The only person who makes out on a pass-through is the new car buyer. Used car buyer still has to pay tax and dealer has to do paperwork to pass the car through (buy and sell) and perhaps even have to deal with providing the minimum warranty on the vehicle as required by the state.

rivertown · March 2003

The used car buyer has to pay sales tax on a private sale - when he/she registers the car. So, the money comes out the same - for everybody. As a private used car seller, you can help your buyer by under-reporting the sales price; but that can get sticky.

The new car dealer doing a pass through is going an extra mile (paperwork, etc.) for the sake of his/her customer and presumably to facilitate a deal he/she might otherwise lose.

masspector · March 2003

for the replies, it has been eons since I bought a used car (high school days) so I did not realize that the used car buyer might have to pay the tax when they register. I knew the seller would not collect it when the used car was sold. My sales tax rate is 6%. Seems like a lot of hassle to save $300 on the new car.

vikd · March 2003

that was pretty tough prodigal...

No problem with any Vols here; especially the football team. The Ducks are gaining on them though; their starting tailback was a Tennessee transfer.

Question for Audi-- How's the TL-S selling? I drive by an Acura dealer every morning and I've seen the same three sitting out front for about 6 weeks now...one of 'em has aftermarket wheels and a ground efx kit; wonder what the addendum sticker asks for those things?!?!

Regards... Vikd

rivertown · March 2003

I agree, the hassle might not reach the 'worth it' threshold - especially in light of the benefits already gained by selling privately.

Who knows, though; IF the timing worked and IF the dealer were genuinely service oriented and IF the buyer were willing, a pass through could sweeten the pot for everybody. Lotta IF's there, LOL.

nick1972 · March 2003

I am looking to purchase a Pathfinder 00 or 01 LE. I had originally planned to buy an 01 Highlander, but the supply is just not there, and I'm not really willing to shell out the bucks, so I started looking at other vehicles.

In my research I found the Pathfinder to be the best bet for my budget. From what I understand, I can get a Pathfinder with much more options for about the same $$ as a base HL.

There are several 00 and 01 Pathfinders in my area for sale. I realize the 01 has the 3.5, but I'm not really sure if it's worth spending the extra money.

And so to my question...
I have located a 00 Pathfinder LE with 22K miles. The dealer's website lists the price at 21,950, but the same car on Auto Trader from the same dealer is 19,995. What should my offer be to start? And what can I expect to pay for this vehicle?

Also, any thoughts on an 00 vs. 01 pathfinder would be appreciated.

Thanks very much in advance for your help!

bretfraz · March 2003

Having owned an Infiniti QX4 with the 3.3L V6 and having driven both the Q and the Pathy with the 3.5L V6, I cannot recommend enough the '01 model. The 3.3L is a real workhorse engine which will easily go 200K+ with regular maintenance. But the 3.5L is much more powerful making these SUV's that much better to drive. By comparison the 3.3L is a slug and a gas hog too (you won't bust 18 on the highway and will get 12-14 in town).

As tough as the 3.3L is I'd take the 3.5L any day of the week.

I assume you are looking at the 4WD model w/ leather, sunroof, Bose, etc, as those prices are insane for a 2WD. I wouldn't pay much more than $19,000 OTD for the one you're looking at. Great miles and all but they're doing mid 16's at auction so that would put you at around $18K+TTL or about $19K OTD. That's what I'd shoot for, at least. Lets see what the pros think.

bigorange30 · March 2003

WHOLEHEARTEDLY!!! I think you will be disappointed long term with the 3.3L engine.

maxappeal · March 2003

If you can wait for the all-new Pathfinders to debut and hit showroom floors, I belive you would be able to get a great deal on the '01. YES, the 3.5 is worth every penny! Good Luck

nick1972 · March 2003

I think I'll wait for the new models to debut and get the 01. Does anyone know when that will be? Thanks again for the input.

CarMan@Edmunds · March 2003

Let's try to get things back on topic everyone, thanks.

Car_man
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zueslewis · March 2003

Now, really can anyone tell me why most dealers in PA don't have F&I guys - the salespeople close contracts and secure financing in many places.

ateixeira · March 2003

Keep in mind the 3.5l uses premium fuel. I'd still get it over the 3.3l, but just be aware of that.

-juice

afty · March 2003

But the 3.5L can also run on regular if need be, at least it can in my Altima.

potenzaus · March 2003

Hi,

Can anybody here be kind enough to provide a lease quote for a Honda Odyssey? We're located in CA (bay area) and the term is 36 months. Please include the calculation and what's the money factor the dealer would use.

Thanks a lot.

jasmith52 · March 2003

You can do your own lease quote using the calculator from Edmunds.

Heres the Link

http://www.edmunds.com/apps/calc/CalculatorController?pmtcalActio- - n=lease_calc&tid=edmunds.finance.shoppingtools...7.*

just pick the price that you think that you can negotiate and an interest rate that is appropriate for your credit rating. Fill in the rest of the blanks and there you are.

To get the money factor divide the appropriate interest rate by 2400.

dsattler · March 2003

I just got a flier from a local dealer (Crystal in Silver Spring, MD) with this deal: buy a new 2002 Axiom at MSRP and get a 2002 Ford ZX2 or 2002 Ford Focus at no extra charge except for tax, tags and freight. There is no fine print, except that the Axiom is "select," which I assume means this applies only to certain (probably the more expensive) Axioms. Does not specify whether the "free" car is new or used. Any expert comments? (FYI, I don't plan to buy, I just wonder how they do it.)

kyfdx · March 2003

There is probably a $5k rebate, and another $5k isuzu to dealer cash on the car.. just an example. I doubt Isuzu can give those mutants away. You can buy leftover ZX2's for under $10K.

kyfdx

jeffmust2 · March 2003

...the Ford Focus or ZX2 is a plastic model.

chikoo · March 2003

it says "no extra charge" so the dealer will not rip you, but will charge you the invoice price on the ZX2.....

kyfdx · March 2003

I believe you'll find that Axioms are going for over $10K less than sticker.. Remember the Vehicross.. or even the Subaru SVX? I'm sure its a legitimate deal.. that doesn't make it a good one.

kyfdx

ateixeira · March 2003

Hmm, a local dealer sells Isuzus at no-haggle prices. Their most loaded up Axiom lists for $32,315, and they discount it down to $25,958.

That explains at least $6,357 of margin they have to work with. It could be more with an even more loaded Axiom, maybe $8 grand or so. But $10 grand is a stretch.

Maybe they tack on $399 processing and $199 ad fees? Or they force-feed you dealer-installed options?

I recall one Lincoln-Mercury dealer was offering Blackwoods at MSRP, plus you got a Cougar free. Believe it or not they actually ended up with a profit when you did the math.

-juice

kyfdx · March 2003

His ad specified both cars were 2002 models.. I think that could account for more of it right there.

kyfdx

bretfraz · March 2003

I recall one Lincoln-Mercury dealer was offering Blackwoods at MSRP, plus you got a Cougar free. Believe it or not they actually ended up with a profit when you did the math.

Yup, and the dealer gets rid of two freak cars at the same time.

Blackwoods are selling at auction in the high 20's, about the same price as a Harley F150 and just a few thou more than a loaded F150 Lariat. Buy a new Blackwood, drive it around the block, and lose almost 50% of its value. Unreal.

ateixeira · March 2003

I think I'd still pick the Lariat, they offer 4WD and far more utility.

-juice

kbui · March 2003

How much would dealers discount "left-over" cars from the previous model year (2002) by? I found such a car and am tempted to make an offer. For the car in question (Mazda Protege), there is practically no functional difference between the 2002 and 2003 models.
The 2003 model has a $2K rebate; the 2002 doesn't. I tend to drive my cars till they fall apart, so resale value is not a factor.

For the 2002 car, invoice + dest. charge + options + taxes= $13.9K
Add ~$200 for "doc fees", and I am looking at about $14.1K out-the-door.

For the 2003 car, I am pretty sure I can get the same car, for around $12.4K out-the-door, thanks to the $2K rebate (it would've been $14.4K without the rebate).

So what do you think would be a fair offer for the 2002 car? I'd appreciate any help/advice.

ateixeira · March 2003

Take the $1.7k and run. Or wait until the 2003s start offering rebates, which they surely will.

-juice

rivertown · March 2003

In December, I bought an '02 Honda. The gap between best price on an '02 and an '03 was about $2K. Same situation as you're describing, virtually no difference between years.
I've no clue about Mazda pricing, the market for the Pro, what the dealer's thinking might be, etc.; but I'd offer about 15% less for the '02 that the real price on the '03 and see what happens.
I know you're not thinking about resale value, but you don't wanna be in a bad spot if the '02 is totaled.

JPham · March 2003

But a %15 lower offer on the '02 Protege is only about $400 less than the '03-with-rebate ($12 vs $12.4).
I'd just take the '03 and be done with.
Else, I'd let the dealer make an offer on the '02 and then decide.

JP

oac3 · March 2003

I heard the '04 Toyota Matrix will hit the dealerships by mid-April. I am in the market for one, but finding it difficult to find one in the preferred color - Metallic Ocean Blue. There is a $750 rebate on '03's, but if I wait till the '04's arrive, would I be better off with an '04 or an '03 ? I suppose the '04's may not have any discount, but the dealer may want to move them out to make room for the '04's.... I have a deal for $16,9 on an XR, sport package, sport plus, etc...

rroyce10 · March 2003

....... No thought process here, take the 03 .. they may, might, could sell the 02 for invoice, your better deal is with the newer one, there not going to sell the 02 for a big loss.

Terry.

virgiesmom · March 2003

Went by Jeep dealer today, 3/28, and they only had one 2003 Jeep Limited(V8) on the lot but about 15 Laredos. It was a demo with 1150 miles. Wanted $100 over invoice + destination charge. Does not include TTL and $59 processing fee (don't see many this low any more). Is this a reasonable deal with the 2004's now out even though they didn't have any as of yet but other dealership in town has loads of 2004's?

rroyce10 · March 2003

...... It's a good deal if you like the vehicle, the dealer isn't going to take a big loss when he can sell it now or in a month .. it's a good deal if you are buying it for $100 over, then minus the rebates and any special programs that are going on ...

Terry.

zueslewis · March 2003

you didn't mention what was happening with the $2500 rebate.....

hey, terry, what's up?

virgiesmom · March 2003

The $100 over did not include the $ 3000 cash back. I guess you guys don't have a concern that it was a demo and I should expect add'l discounting. Probably will return this morn or Monday (last day of month) and see if I can squeak any more. Possibly negotiate an the best/longest extended warranty as part of deal....shoot for $500?

rroyce10 · March 2003

... I hope you get it .. but don't make it a fire fight in the desert, it's been used as a demo, yes and 1,000 miles isn't that bad - but, your warranty starts the day you drive out, plus you have the $3,000 rebate, just keep an open mind, perhaps 2/3 clean and details for 2 years, maybe free oil changes for the first 30k, perhaps a little visit to the parts dept, but whatever, keep your options open - And get it in writing ..!

Terry.

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