Dealer question for David

[Lomeinhu]

Dave, I got a question for you regarding trade-ins, just because I came across a topic about selling the Celica. I'll try to make it as clear as possible. I've done this before, so I'm just estimating in prices. Take my Celica GT-S for example: 23,000 mi. Year 2000. TMV on Edmunds estimates $13,000 for trade-in, $15,000 for private party. Say I walk into a dealer and ask about my trade-in value. Salesperson says $13,000 (TMV's right!). I say, "WTF?? Are you serious? I bought this thing for $23,000 20 months ago!" The salesperson replies, "Well, we have to ABSORB the cost of advertising, maintenance, yada, yada, yada..." Here's my question: If the dealer is "absorbing" the cost of blah, blah, blah, then why are we forking over all the money to cover it? Is this just another sketchy way to convince the customer? So, if I was willing give the dealer my car for $13,000 when I can (supposedly) get $15,000 to sell it privately, then that's already $2000 that I lose. In addition, the dealer will not sell the same car for anything less than $17,000 ($18,000 if you're lucky), so that comes out to a total of about $4,000 for INSPECTING and ADVERTISING the car???? I don't understand...if we can buy a brand new car for a few hundred over invoice, which is roughly (or over) the price the dealer paid for the car, then why isn't buying a used car paying a set amount over what the dealer paid for the car from the FIRST owner? In this case, since I covered the cost of maintenance, ad, etc., it really makes no sense for the dealer to then turn around and tell me that the dealer paid more then $13,000 or that the $17,000 covers the cost AGAIN! First, I pay $2,000 for the "costs", then the next customer pays for the "costs." In my case, I wanted to trade-in my auto for a used 6-speed, so somehow I would end up paying for the ENTIRE process of getting another car. Who NEEDS the dealer? I PAID for the whole deal! This really confuses me and I was really frustrated to see that the other used Celica that I was gonna buy had all these interior marks and swirls from an awful wax job. Where do they blow that $4,000 or more? Inspection isn't that expensive, is it? Dave, can you break it down?

NOTE: I checked KBB just now, and for some reason, my car is worth $16,000 in trade-in, $18,000 in private party, and $21,000 in retail. Wow...that's strange...It went up! Retail is ridiculous, though....

[simphmerj]

i think its like this: basically the dealer will buy the car from you for a certain amount less than what they think they can sell it for (which is why the same car is worth more or less in different areas). also, they'll give you more for a trade-in if you're gonna buy another car from them because that'll means they're still gonna make money (the profit from you buying car and the lower but still substantial profit from reselling your old car).

if i was you, take the car to CarMax and they'll give you a price for your car regardless of whether you trade it in or just want to get rid of it. plus its good for like 5 days and they'll put it in writing. you can probably take it to another dealer and it should help you. basically the dealer is trying to go as low for your trade in value as they can get. if you look on AutoTrader.com, there are used Celica GT 's for 22K. nobody should pay that much, but there's a sucker born everyminute.

allan

P.S. there is a dealer forum that Mr. Draper usually answers all questions in

[simphmerj]

So, if I was willing give the dealer my car for $13,000 when I can (supposedly) get $15,000 to sell it privately, then that's already $2000 that I lose.

this is for not having to go through the hassle of finding a private party to buy, waiting for financing from them, etc....

Here's my question: If the dealer is "absorbing" the cost of blah, blah, blah, then why are we forking over all the money to cover it?

absorbing, covering, are all terms for profit. they give you a lower price then private party because they have to make a profit. the private party doesn't have car lot rent and salesman salary's to pay. its more convient to trade to car dealer (ever tried to transfer the title from PP to PP a vehicle that still has a lien?) and therefore you pay for that convience.

so that comes out to a total of about $4,000 for INSPECTING and ADVERTISING the car???

thats what they say because NO customer wants to here that the Dealership is making a profit off of them (<--- read indignantly) but like i said, they have to make money or they won't be in business

I checked KBB just now, and for some reason, my car is worth $16,000 in trade-in, $18,000 in private party, and $21,000 in retail. Wow...that's strange...It went up! Retail is ridiculous, though....

KBB is just a value assigned by the editors opinion using devaluation calculations....TMV uses figures from actual transactions (selling/buying prices) to determine what is about right. TMV will usually be lower than KBB for low demand vehicles and vice versa for high demand vehicles


although all of this could be completely wrong:rolleyes:

[Lomeinhu]

symphmerj:

I think Larry got rid of the Dealer forum. And to think, I was just in there a week or two ago telling him why he SHOULDN'T get rid of it. :p

[simphmerj]

I think Larry got rid of the Dealer forum. And to think, I was just in there a week or two ago telling him why he SHOULDN'T get rid of it.

i see you are correct, grasshoper. my bad

allan