"If I understand correctly, you are saying you won't sign your offer until you get a commitment from a dealer, because you don't know if the offer will be accepted?"
More or less, I suppose.
"So, all I come down to is that you are playing your own psychological game to keep yourself from playing the dealer's game."
You're probably right. I suppose Isell is right and I just want to do it on my terms. Doesn't mean I'm right or even that it's the best way to do things.
"tornado...yet another thing that escapes you is the fact that the dealer has already committed to a price before you even arrive. the price on the window of the vehicle you want is what they commit to. if you want another, its up to you to offer."
Good point. I've argued the same thing on the inconsiderate boards. People complaining about not knowing "the price". The price is sticker--I agree.
"and when you DO offer, its not you doing the dealer "a huge favor by gracing them with your presence". you are ASKING for them to give up money by discounting their vehicle."
Sure. So I understand why you'd want me to sign an offer. Why would you agree to discount the product without assurance I will buy it?
"me: "tornado, my good friend, im in a financial pickle. i need $1000 to afford a car. i know you have $2000 in the bank. i dont want to ask for it, so i want you to tell me you are giving it to me first. but if you dont, i wont be your friend anymore." or me: "tornado, im in a financial pickle. i need $1000 to afford a car. can you help me out please?"
which way would you be more likely to help me out? if you agreed, wouldnt you want me to agree to YOUR terms?"
Obviously the second. However, I doubt any friend that's good enough where I would lend a $1000 wouldn't ask that way and if he did, I don't need him as a friend. But, I sort of see the point
"for example:
you: "ok, keith, but please sign this form stating that you actually WILL use it for the purchase of the car you so desperately need.""
Thing is...I probably wouldn't ask for a signature for a $1000. Honestly, if I were in a position to hand out a grand and the friend was good enough where I would consider giving it to him, I likely would not have him sign anything. (Besides, a signed form legitimizes the loan and technically, I'm required to charge interest).
I realize I could just make it "easier on myself" and go along with whatever the dealer wants--signing offer sheets, buying paint protection, buying extended warranties on leased vehicles, whatever. But, you could be the friendliest salesperson on the planet (and honestly, all the salespeople here sound great--why else would you spend your free time to offer your views only to get them shot down?) and I'm not ever going to think the salesperson or the SM is "on my side". He can't be.
We are in the process of purchasing a new LS430 (waiting to see if it's on the list tomorrow!). So here it is a Saturday, my partner and I (both late 30's) walk into the Lexus dealership in jeans and unshaven. I thought we would get some attitude but this wonderful saleswomen greeted us, let us go on a test drive (it was an '03 Demo since they had no Ultra's on in stock new) and then we got around to negotiating. I had already received a price from an online place and I gave her one that was just about $5k under MSRP. Granted, this is an in demand car (average wait - 6 weeks with the Ultra package) so we agreed at $4k under MSRP.
She was not only good at the negotiation stage but she took the time to admire the STS that will be going back in a couple of weeks (which we've had major problems with and hate!). Even after I told her all about it, she was polite and never bad-mouthed Cadillac or GM.
Yep, cars are definitely a good deal today. We were replacing a 7 year old legacy wagon (154K miles) with this OB wagon, and we paid just a tad more than we did 7 years ago for the legacy.
There has been no suggestion that you "do everything" a dealer asked of you (paint protection, etc.). But your exaggerated comment still hints at "I won't do what they want" ego-issues.
Negotiations by definition are an adversarial process. Adding the implicit demand that you be treated differently than what you acknowledge to be the norm makes negotiations difficult indeed.
Do you expect to go to the front of the checkline at Wal-Mart? Always get the best table in the restaurant? Of course not... you expect to get the same treatment every other customer gets.
So it will also be at the car dealer. And your earlier statements indicate you do know what to expect. You just don't like it (nor do I, but I have adapted). Just seems like you are tilting at windmills to me.
I'm not exactly sure if this is the right discussion for this question, but I wanted to find out if selling used cars as a part-time business would be viable. I'm aware of the problems and laws associated with "curbstoning," however, I would like to sell legitimate cars that I can buy at a good price and recondition/repair for a profit. I've had many opportunities in my work to purchase great used cars that would turn a profit. It seems though that the requirements for a dealer's license in California are such that being in the business only part-time would be impractical. Would I be better off getting the license or can I get by without one?
I've posed a few questions in earlier posts that went unanswered. In the spirit of this thread's title, I'll try again. Or maybe these are "insider secrets" you prefer not to discuss.
1. Will a customer get a better deal, or at least get to the same deal more quickly on a busy Saturday rather than at less-busy times?
2. Is there anything to the popular notion about buying at end-of-month, end-of-quarter, etc.?
3. Do you prefer working down from your "How much is it" number or working up from customer's first offer (bonus points for explanations).
The last one has not been asked before.
4. I've had 2 (attempted) purchase experiences where, no doubt about it, the salesrep did nothing wrong. The deals, both very close, were completely botched by the Sales Manager with real bush-league tactics. In both cases, without it being said, everyone knew that to be the case. How often does that happen? Does the rep get any slack for a lost-sales that was not his fault?
You might also be able to establish a relationship with a dealer where "your" cars go on their lot under consignment.
Sure, you'll be splitting proceeds with them, but you may avoid a lot of business set-up and licensing expense, and have "pros" doing the selling for you with more buyer traffic on the established retail lot.
If what you do best is find & refurbish the cars, it may be a win-win relationship.
i have friends who do nothing but wholesale cars. the licensing in most states is much less demanding than a retail license, and you can work from home, from an auction site, or even from a dealer (if they let you). how much work you do depends on how much money you want to make.
for example, you can buy 10 cars a week, clean them up a little, and make $250-$1000 per unit by selling them to dealers.
caution...
it takes less money and licensing to do this rather than retail, but it takes FAR more knowledge and business savvy. be careful and good luck.
this is a tough one. quite honestly, you will get the best deal when you are committed to buy, whether its busy or not.
2) EOM/EOQ...
sometimes...but what if you go when the dealer just reached it, and another mini deal makes little or no difference? the phrase 'paralyzation by analyzation' comes to mind. dont overanalyze it...just make your offer when you are ready.
3) that depends on the deal. if the buyer is committed and reasonable (read: willing to come up from their 1st offer), then i could care less. it also depends on the vehicle somewhat. a high demand car will start at sticker.
My brother has been "flipping" cars for years. A friend will call offering a car for sale. If the price is right, he'll buy it, drive it for a while and then sell it for what he originally paid for it.
Sounds like a GREAT business ... BUT ...
Last June, he bought a Tahoe at what he considered a good price. Planned to use it for vacation and then sell it in September. He figured that it would be cheaper than spending the $2k that it would cost him to rent it for three weeks.
It is February and he is still sitting on it. The best offer will give him a $4k loss. For the first time, he was wrong. It does not have the resale value that he expected.
Told him to take the loss - of course he says that that is easy for me to say ...
.... **requirements for a dealer's license in California** ..
In California even the sales people have to be licensed, then you have to have a dealers license to sell and buy vehicles on top of that ..
You have to be "liquid" and/or a Big credit line to purchase the vehicles with, you also have to be able to purchase vehicles at the auctions in CA and you have to be licensed to buy them from dealer to dealer ..
Let's not forget the surety bonds, the insurance the plates, the liability insurance, city tax, county tax, title movement, let's not forget the dirt to put them on, which has to be approved by the city-county-state and let's not forget you have to pay for that dirt, building, signs, storage and have it all approved and sometimes it can take weeks, sometimes it can take months and in some cases it can take years depending on the situation .l.o.l..
Bowke paints a nice picture (obviously, it's not his money) but when your "trying" to sell those 10 vehicles you better have time, connections and money to be buying the next 10, because there is a good chance the first 10 won't sell in a week or even a month, so you always need those quick "turn and burns" ... part time.? .. have you thought of getting a job at Circuit City.?
Seriously though .. it's easy for Bowke to tell you how to do it when he uses the dealers license, office, inventory, air conditioner, heat, phones, computers, title clerks, detail and service dept, and let's not forget the most important thing, the dealers money ....... )
The rub is, without the dealer's license, no going to the auction. If you can't do that, you'll be buying on the street, and good luck with that. BIG commitment of time, and you better know what you're doing. Ask yourself "How many units do I have to flip for a profit to offset one complete loss?"
I'm all for it, I've considered it, I can't make it work in my head, I don't think I could make it work on the pavement.
Getting a license is prohibitive, at least here in MI, and probably worse in CA.
NOW. If I only worked 40h/week and didn't have a family, I could probably wheel and deal in my spare time and make enough to at least "drive for free".
But it's not a big money maker that way. If you're in it full-time and you're GOOD, I'd think you could get rich at it. IF you're in the top 2 or 3%. Proceed with caution...
I have a lot of elderly clients that for various reasons (illness, moving to a rest home, etc.), have decent cars (lots of Lincolns for some reason) that they want to unload without a lot of hassle.
A few months ago, one elderly woman sold me her '98 Lincoln Mark VIII for 5 grand. I decided to keep it and it's great. Its just like owning my very own two-door limo. I could have sold it and made a few thousand.
What I'm really trying to find out is if I bought and sold cars like this often enough, is someone from the DMV going to come knocking at my door?
I don't know for sure, but I think that as long as you always title, register and insure the car as your personal vehicle, there is nothing anyone can do to you. What are they going to charge you with, aggravated consumerism? Not only is it perfectly legal to switch cars often, it's the American Way. Now if you buy the silly thing for $5 and then sell it for $8, maybe they'll be getting you on tax evasion.
OTOH, if you were to leave the buyer's name blank on the title and just pass it on to the next person, that would probably be illegal -- but then there wouldn't be a paper trail leading to you.
Hmmmm... I don't think you have much to worry about. What say our professional friends?
.... **What are they going to charge you with, aggravated consumerism?** ...l..o..l..
Isn't that what there charging Michael Jackson with.?
Anyway, what get's folks in trouble is: the "not" paying taxes on the sale price, if you have a flock of elderly folks and your buying their vehicles you need to pay the tax, and don't use some gaffed up number like: "hey I paid $2,500 for this $9,000 vehicle" that doesn't work anymore and 40 states are all over that action, the vehicle has to be shown as a reasonable figure, like "flat dead wholesale" would be the lowest figure and you didn't hear that from me .....
But the point is, you can buy those vehicles and sell them in 2/3 months, "I think" not sure, but I think you can purchase 5/6 vehicles a year in CA, but check with the DMV and get the straight poop.!
My neighbor just got busted for selling that piece of junk Lexus that he has had for sale since 9/11, it's worth maybe $15grand wholesale, he let the new buyer show he paid $8grand for it to save on the taxes, state came back and sent a bill for the taxes on $12grand .l.o.l.. he was better off to leave it alone.
I think my state has a limit of about 5 or 6 'private' sales per years.
What happened to a friend, he was buying and reselling (sport car line) for a while, then one of the local dealership or used car lot owners turned him into the state automobile association. They sent out a nice letter saying he better get a license or they would make a formal complaint to the state licensing bureau.
He got the license, quit his 'regular' job, and does it fulltime. He now is a heavy duty ranter about 'front yard' salemen - people doing same thing he did himself years ago.
AFAIK, "gains" on your private vehicles are not only rare, they are also non-taxable.
In any event, they would not be taxable as capital gains, but as regular income. Hey, there are some dealers around here that keep cars for a year or sometimes more.. when those finally sell, they should declare the profit, if any, as "long-term capital gains"...
MI has a limit on private sales, but they refuse to say what it is. Which I think is cute, and probably not quite legal. It being MI, it's probably something like 12 vehicles PER MONTH, but I could be wrong :-)
The local DMV (Sec State) a few years ago tried to dock a lady for sales tax on a 12-year-old motor home, citing some "book" figure, and she went to the paper for help, so the issue got a lot of press. Of course fraud is fairly common, but the law says you have to pay on the actual price you paid, "or the retail value" of the vehicle, whichever is larger. Since it doesn't say "retail value of like cars", I would think if you fought it, they'd have to send someone out to look at it...
I've always wondered how things get resolved on a car with a blown transmission that gets sold $3 behind wholesale. I'm hoping to get a complaint some day, so I can offer them the car at the stated price and see if they'd be interested to pay that much...
Surely you guys have some good stories. I've been on the buying-end of 2 where (I think) the salesperson got screwed out of a deal by the Manager's (or store's) actions.
Once, the Manager played games holding my certified check (show me the money) when a deal was very close, but not yet done. This was against my explicit warnings to the salesperson, who was clearly embarrassed by the situation. Took me 5 minutes of ugliness to get it back, and I hit the door never to return.
Second time, got the deal done on the phone, only to come in later that day for delivery and got the "Sorry, the owner said no-deal, needs $200 more" treatment. I hit the door, of course they relented as I was leaving, but I never turned back.
One might argue that, much like all the prior discussions with tornado and his expectations from a dealer, that I should have known this sort of thing might happen, and simply "played their game" to do the deal.
But I guess these are examples of where I draw MY line in the sand... I just didn't want to reward that kind of treatment with my business.
But I felt very badly for the salesperson in both instances... they had done their jobs well, but got screwed by their manager's (or store's) bush-league tactics.
What I was responding to was if someone is doing flipping cars as a "hobby" they could be viewed as Capital gains. If they are doing it as a business unless they do it as a partnership or incorporate they'd be looking at Self employment tax. Just wanted to make sure all the pluses & possible minuses are out there. :-)
"Do you expect to go to the front of the checkline at Wal-Mart?"
No, of course not. But this is NOT the same thing. I know it's just an analogy, but it's not the same thing. There is no reasonable alternative to waiting in line. At the dealer, deals are done everyday in manners of all kinds--signing the offer is not the only way.
"Always get the best table in the restaurant? Of course not... you expect to get the same treatment every other customer gets."
Actually, there is a way around thing this. It might not work at Applebee's and such, but at any fine restaurant, it's called money. Money equals a table with a lake view or what-have-you.
At any rate, I give up. I certainly wasn't trying to convince anyone that my ideas were the way things should be done and I acknowledged it probably wasn't the easiest way. As for the exaggerated statement on paint protection, etc--my point is the same. If it *were* paint protection we were talking about, would it still be fine, since it was the easiest way to get a deal done. At any rate, it was just an exaggeration.
At the end of the day, we all do what works for us. Apparently your approach works for you. Many off us don't understand your rationale, but there are many things I do in my own life that would leave many of you scratching your heads.
We all are unique individuals, some Uniquer than others ;-)
I have never had a dealer pull a trick on me like throwing my keys up on the roof or holding on to my driver's license after they want to photocopy it before we take a test drive.
If they ever did pull a stunt like that, I would probably go absolutely berserk - running around the showroow screaming, pulling floor mats out of the new cars, knocking over things. I can't even imagine how mad I would be.
Fortunately, all car dealers seem to treat me very nice these days. I don't know why - maybe the look in my eyes reminds them of Hannibal Lechter.
My fiancee took me to this small-time dealership (you know--25 cars behind a big fence w/the sign leaning to the side). He wanted to go to them b/c they do "in-house" financing and they offered to "cut him a deal" on the payments. However, they do a weekly payment schedule ($60-$80/wk). I asked the salesperson if we could do a monthly pay schedule. He said yes, but you have to pay at the first of the month and you have to send in 4 post-dated checks with the weekly amount! This smells "fishy" to me.
Secondly, he said the lowest interest rate they offer is 11%(w/the best credit) which is about the best you'll get on a used car anywhere. Is that true?
and they're all over. For people with credit problems, it's a way to get a car, but you usually end up paying $10K plus interest for a car you could buy through the newspaper for $3500. 11% is very low interest for these places.
They require weekly payments so they can keep track of you and I guarantee they will repo your car if you're late on a weekly payment.
I could go on forever about these places, having an old high school bud who is very successful in that business, but my recommendation is to save a few bucks and pay cash for something cheap, save some more money, and move on up to something better.
Beats the heck out of paying 3 times what something's worth and getting your car popped if you're a day late (or in my buddy's case, a half a day).
I'm not a dealer, but that sounds like the classic "Buy Here, Pay Here" dealership. They usually only sell older cars, and charge high interest rates because the cars or the customer doesn't qualify for better rates, ie Bad Credit, No Credit, cars from 1996 and older, etc. Interset rates on newer used cars can be much lower than 11% if you have decent credit. Check your bank, credit union or on line lenders. Incidently, I've read on these boards that these types of lots really make their money on financing, and are not usually interested in cash deals. The sales pros who regularly post on here can give you better information than I can.
one of those areas I have lots of experience in. My buy here pay here buddy was my best wholesale buyer - this guy bought EVERYTHING (and that's scary!).
Like the folks who buy a $1500 car for $7995, get it repo'd 4 times, pay the repo fee ($300), catch up on the payments, but on the fifth time (3 months from payoff), let the car go because it needed a battery.....
This particular customer had over $13,000 into a $1500 car, and LET IT GO over a battery.
I've been lurking these boards for 2 years now, posting occaisionally. I've always found the pros who post here to be very helpful and informative. Some of the things people do just amaze me. Guys like you, Terry, Landru, Isellhondas, Bowke and others really do a good job of presenting the picture from your side of the desk. thanks.
From our little bit of experience dealing with them they aren't all bad. After our bk we went to one and traded in my ratty old Suburban and bought a fairly nice 94 Chevy K2500. Probably paid more than it was worth, but at the time we needed a truck and conventional financing wasn't an option. They did the bi-weekly payments and the interest rate was criminal. We paid on the truck for 4 months and then paid it off.
They were absolutely top notch, really nice place, had fairly new cars (the truck was being driven by the owner, the only reason it was there really). Most of their cars still had some warranty on them and all were inspected, plus they gave you records of any repairs they had made to the car.
Not all of them are bad, but in our search for a truck we did find some that were less than honorable.
Its nice to be back in conventional financing land though.
Comments
More or less, I suppose.
"So, all I come down to is that you are playing your own psychological game to keep yourself from playing the dealer's game."
You're probably right. I suppose Isell is right and I just want to do it on my terms. Doesn't mean I'm right or even that it's the best way to do things.
"tornado...yet another thing that escapes you is the fact that the dealer has already committed to a price before you even arrive. the price on the window of the vehicle you want is what they commit to. if you want another, its up to you to offer."
Good point. I've argued the same thing on the inconsiderate boards. People complaining about not knowing "the price". The price is sticker--I agree.
"and when you DO offer, its not you doing the dealer "a huge favor by gracing them with your presence". you are ASKING for them to give up money by discounting their vehicle."
Sure. So I understand why you'd want me to sign an offer. Why would you agree to discount the product without assurance I will buy it?
"me: "tornado, my good friend, im in a financial pickle. i need $1000 to afford a car. i know you have $2000 in the bank. i dont want to ask for it, so i want you to tell me you are giving it to me first. but if you dont, i wont be your friend anymore."
or
me: "tornado, im in a financial pickle. i need $1000 to afford a car. can you help me out please?"
which way would you be more likely to help me out? if you agreed, wouldnt you want me to agree to YOUR terms?"
Obviously the second. However, I doubt any friend that's good enough where I would lend a $1000 wouldn't ask that way and if he did, I don't need him as a friend. But, I sort of see the point
"for example:
you: "ok, keith, but please sign this form stating that you actually WILL use it for the purchase of the car you so desperately need.""
Thing is...I probably wouldn't ask for a signature for a $1000. Honestly, if I were in a position to hand out a grand and the friend was good enough where I would consider giving it to him, I likely would not have him sign anything. (Besides, a signed form legitimizes the loan and technically, I'm required to charge interest).
I realize I could just make it "easier on myself" and go along with whatever the dealer wants--signing offer sheets, buying paint protection, buying extended warranties on leased vehicles, whatever. But, you could be the friendliest salesperson on the planet (and honestly, all the salespeople here sound great--why else would you spend your free time to offer your views only to get them shot down?) and I'm not ever going to think the salesperson or the SM is "on my side". He can't be.
-Corey
She was not only good at the negotiation stage but she took the time to admire the STS that will be going back in a couple of weeks (which we've had major problems with and hate!). Even after I told her all about it, she was polite and never bad-mouthed Cadillac or GM.
So far, so good!
We were replacing a 7 year old legacy wagon (154K miles) with this OB wagon, and we paid just a tad more than we did 7 years ago for the legacy.
and if a customer asks for a discount without a written commitment, im probably better off without them as a customer.
Negotiations by definition are an adversarial process. Adding the implicit demand that you be treated differently than what you acknowledge to be the norm makes negotiations difficult indeed.
Do you expect to go to the front of the checkline at Wal-Mart? Always get the best table in the restaurant? Of course not... you expect to get the same treatment every other customer gets.
So it will also be at the car dealer. And your earlier statements indicate you do know what to expect. You just don't like it (nor do I, but I have adapted). Just seems like you are tilting at windmills to me.
I'm aware of the problems and laws associated with "curbstoning," however, I would like to sell legitimate cars that I can buy at a good price and recondition/repair for a profit. I've had many opportunities in my work to purchase great used cars that would turn a profit.
It seems though that the requirements for a dealer's license in California are such that being in the business only part-time would be impractical. Would I be better off getting the license or can I get by without one?
In many states, getting a license requires a huge bond, insurance, as well as physical standards for a sales lot.
If you're just doing a few a year (less than 10), you may not having any troubles at all.
Your mileage may vary.
1. Will a customer get a better deal, or at least get to the same deal more quickly on a busy Saturday rather than at less-busy times?
2. Is there anything to the popular notion about buying at end-of-month, end-of-quarter, etc.?
3. Do you prefer working down from your "How much is it" number or working up from customer's first offer (bonus points for explanations).
The last one has not been asked before.
4. I've had 2 (attempted) purchase experiences where, no doubt about it, the salesrep did nothing wrong. The deals, both very close, were completely botched by the Sales Manager with real bush-league tactics. In both cases, without it being said, everyone knew that to be the case. How often does that happen? Does the rep get any slack for a lost-sales that was not his fault?
Sure, you'll be splitting proceeds with them, but you may avoid a lot of business set-up and licensing expense, and have "pros" doing the selling for you with more buyer traffic on the established retail lot.
If what you do best is find & refurbish the cars, it may be a win-win relationship.
for example, you can buy 10 cars a week, clean them up a little, and make $250-$1000 per unit by selling them to dealers.
caution...
it takes less money and licensing to do this rather than retail, but it takes FAR more knowledge and business savvy. be careful and good luck.
this is a tough one. quite honestly, you will get the best deal when you are committed to buy, whether its busy or not.
2) EOM/EOQ...
sometimes...but what if you go when the dealer just reached it, and another mini deal makes little or no difference? the phrase 'paralyzation by analyzation' comes to mind. dont overanalyze it...just make your offer when you are ready.
3) that depends on the deal. if the buyer is committed and reasonable (read: willing to come up from their 1st offer), then i could care less. it also depends on the vehicle somewhat. a high demand car will start at sticker.
hope this is what you were looking for.
Sounds like a GREAT business ... BUT ...
Last June, he bought a Tahoe at what he considered a good price. Planned to use it for vacation and then sell it in September. He figured that it would be cheaper than spending the $2k that it would cost him to rent it for three weeks.
It is February and he is still sitting on it. The best offer will give him a $4k loss. For the first time, he was wrong. It does not have the resale value that he expected.
Told him to take the loss - of course he says that that is easy for me to say ...
In California even the sales people have to be licensed, then you have to have a dealers license to sell and buy vehicles on top of that ..
You have to be "liquid" and/or a Big credit line to purchase the vehicles with, you also have to be able to purchase vehicles at the auctions in CA and you have to be licensed to buy them from dealer to dealer ..
Let's not forget the surety bonds, the insurance the plates, the liability insurance, city tax, county tax, title movement, let's not forget the dirt to put them on, which has to be approved by the city-county-state and let's not forget you have to pay for that dirt, building, signs, storage and have it all approved and sometimes it can take weeks, sometimes it can take months and in some cases it can take years depending on the situation .l.o.l..
Bowke paints a nice picture (obviously, it's not his money) but when your "trying" to sell those 10 vehicles you better have time, connections and money to be buying the next 10, because there is a good chance the first 10 won't sell in a week or even a month, so you always need those quick "turn and burns" ... part time.? .. have you thought of getting a job at Circuit City.?
Seriously though .. it's easy for Bowke to tell you how to do it when he uses the dealers license, office, inventory, air conditioner, heat, phones, computers, title clerks, detail and service dept, and let's not forget the most important thing, the dealers money .......
Terry ;-)
I'm all for it, I've considered it, I can't make it work in my head, I don't think I could make it work on the pavement.
Getting a license is prohibitive, at least here in MI, and probably worse in CA.
NOW. If I only worked 40h/week and didn't have a family, I could probably wheel and deal in my spare time and make enough to at least "drive for free".
But it's not a big money maker that way. If you're in it full-time and you're GOOD, I'd think you could get rich at it. IF you're in the top 2 or 3%. Proceed with caution...
-Mathias
A few months ago, one elderly woman sold me her '98 Lincoln Mark VIII for 5 grand. I decided to keep it and it's great. Its just like owning my very own two-door limo. I could have sold it and made a few thousand.
What I'm really trying to find out is if I bought and sold cars like this often enough, is someone from the DMV going to come knocking at my door?
What are they going to charge you with, aggravated consumerism? Not only is it perfectly legal to switch cars often, it's the American Way. Now if you buy the silly thing for $5 and then sell it for $8, maybe they'll be getting you on tax evasion.
OTOH, if you were to leave the buyer's name blank on the title and just pass it on to the next person, that would probably be illegal -- but then there wouldn't be a paper trail leading to you.
Hmmmm... I don't think you have much to worry about. What say our professional friends?
-Mathias
Isn't that what there charging Michael Jackson with.?
Anyway, what get's folks in trouble is: the "not" paying taxes on the sale price, if you have a flock of elderly folks and your buying their vehicles you need to pay the tax, and don't use some gaffed up number like: "hey I paid $2,500 for this $9,000 vehicle" that doesn't work anymore and 40 states are all over that action, the vehicle has to be shown as a reasonable figure, like "flat dead wholesale" would be the lowest figure and you didn't hear that from me .....
But the point is, you can buy those vehicles and sell them in 2/3 months, "I think" not sure, but I think you can purchase 5/6 vehicles a year in CA, but check with the DMV and get the straight poop.!
My neighbor just got busted for selling that piece of junk Lexus that he has had for sale since 9/11, it's worth maybe $15grand wholesale, he let the new buyer show he paid $8grand for it to save on the taxes, state came back and sent a bill for the taxes on $12grand .l.o.l.. he was better off to leave it alone.
Terry.
Duncan
What happened to a friend, he was buying and reselling (sport car line) for a while, then one of the local dealership or used car lot owners turned him into the state automobile association. They sent out a nice letter saying he better get a license or they would make a formal complaint to the state licensing bureau.
He got the license, quit his 'regular' job, and does it fulltime. He now is a heavy duty ranter about 'front yard' salemen - people doing same thing he did himself years ago.
In any event, they would not be taxable as capital gains, but as regular income. Hey, there are some dealers around here that keep cars for a year or sometimes more.. when those finally sell, they should declare the profit, if any, as "long-term capital gains"...
MI has a limit on private sales, but they refuse to say what it is. Which I think is cute, and probably not quite legal. It being MI, it's probably something like 12 vehicles PER MONTH, but I could be wrong :-)
The local DMV (Sec State) a few years ago tried to dock a lady for sales tax on a 12-year-old motor home, citing some "book" figure, and she went to the paper for help, so the issue got a lot of press. Of course fraud is fairly common, but the law says you have to pay on the actual price you paid, "or the retail value" of the vehicle, whichever is larger. Since it doesn't say "retail value of like cars", I would think if you fought it, they'd have to send someone out to look at it...
I've always wondered how things get resolved on a car with a blown transmission that gets sold $3 behind wholesale. I'm hoping to get a complaint some day, so I can offer them the car at the stated price and see if they'd be interested to pay that much...
-Mathias
Once, the Manager played games holding my certified check (show me the money) when a deal was very close, but not yet done. This was against my explicit warnings to the salesperson, who was clearly embarrassed by the situation. Took me 5 minutes of ugliness to get it back, and I hit the door never to return.
Second time, got the deal done on the phone, only to come in later that day for delivery and got the "Sorry, the owner said no-deal, needs $200 more" treatment. I hit the door, of course they relented as I was leaving, but I never turned back.
One might argue that, much like all the prior discussions with tornado and his expectations from a dealer, that I should have known this sort of thing might happen, and simply "played their game" to do the deal.
But I guess these are examples of where I draw MY line in the sand... I just didn't want to reward that kind of treatment with my business.
But I felt very badly for the salesperson in both instances... they had done their jobs well, but got screwed by their manager's (or store's) bush-league tactics.
Just wanted to make sure all the pluses & possible minuses are out there. :-)
Duncan
It should have cost them a deal - good move.
No, of course not. But this is NOT the same thing. I know it's just an analogy, but it's not the same thing. There is no reasonable alternative to waiting in line. At the dealer, deals are done everyday in manners of all kinds--signing the offer is not the only way.
"Always get the best table in the restaurant? Of course not... you expect to get the same treatment every other customer gets."
Actually, there is a way around thing this. It might not work at Applebee's and such, but at any fine restaurant, it's called money. Money equals a table with a lake view or what-have-you.
At any rate, I give up. I certainly wasn't trying to convince anyone that my ideas were the way things should be done and I acknowledged it probably wasn't the easiest way. As for the exaggerated statement on paint protection, etc--my point is the same. If it *were* paint protection we were talking about, would it still be fine, since it was the easiest way to get a deal done. At any rate, it was just an exaggeration.
We all are unique individuals, some Uniquer than others ;-)
Imagine that.
If they ever did pull a stunt like that, I would probably go absolutely berserk - running around the showroow screaming, pulling floor mats out of the new cars, knocking over things. I can't even imagine how mad I would be.
Fortunately, all car dealers seem to treat me very nice these days. I don't know why - maybe the look in my eyes reminds them of Hannibal Lechter.
However, they do a weekly payment schedule ($60-$80/wk). I asked the salesperson if we could do a monthly pay schedule. He said yes, but you have to pay at the first of the month and you have to send in 4 post-dated checks with the weekly amount! This smells "fishy" to me.
Secondly, he said the lowest interest rate they offer is 11%(w/the best credit) which is about the best you'll get on a used car anywhere. Is that true?
What's going on here?
They require weekly payments so they can keep track of you and I guarantee they will repo your car if you're late on a weekly payment.
I could go on forever about these places, having an old high school bud who is very successful in that business, but my recommendation is to save a few bucks and pay cash for something cheap, save some more money, and move on up to something better.
Beats the heck out of paying 3 times what something's worth and getting your car popped if you're a day late (or in my buddy's case, a half a day).
This particular customer had over $13,000 into a $1500 car, and LET IT GO over a battery.
Philsgirl,
That car lot is called a "Mouse House". They buy the cars the big dealers don't want.
They try to get a big enough down payment to cover their costs and then finance their profit.
Their customer base, is for the most part, people with poor credit that have nowhere else to turn.
I suppose they do provide a service but at a severe price.
And...be a day late on a payment and your car will get "popped".
They were absolutely top notch, really nice place, had fairly new cars (the truck was being driven by the owner, the only reason it was there really). Most of their cars still had some warranty on them and all were inspected, plus they gave you records of any repairs they had made to the car.
Not all of them are bad, but in our search for a truck we did find some that were less than honorable.
Its nice to be back in conventional financing land though.
A question for you dealers - Is it really this easy to get a BMW?
Jack