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In the search of a used car, I've found one that fits my needs and will consider purchasing.

Before I walk on the lot I'd like to arm myself with more information though. I know how to calculate the dealer's "true" cost on a new car with MSRP, invoice, holdback, incentives and other items, but for used cars I'm not so sure.

Here's the information I have:

Their price: $9995
KBB "suggested retail:" $7991
KBB Private Party: $6841
KBB Trade-in: $5781

Has been in dealer inventory for at least 2 months.

I was considering offering $7500 and if they take it great, and if not I keep looking. But should I start lower? IIRC the last time I did this PenFed took the KBB retail value as their max financing amount, and the price then was several thousand under KBB so I was able to get them to give me more to finance the tax/title/tags too (rates are so low so it's not a big deal to finance more). That was a private seller.

Any advice? TIA.

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As an auto dealer, I never find KBB to be accurate. I've seen the numbers both too high and too low, often by significant amounts.

Check out Craigslist to see what similar cars are listed for.

Another data point, the CARFAX doesn't show it as sold at any auction and the car stayed local for all of its life. It looks like this person traded it in/sold it to this dealer, so I'd be more inclined to believe they paid something close to the KBB trade in value. So that puts what I think their cost to be at around $5800.

what stanolshefski said. When I bought a used car, I gave the dealer what I thought was a fair price. they didn't want to take it. They called me a month later to see if I was still interested, asked if I was willing to go up, I said no, I'm not here to negotiate, I gave you what I thought was a fairprice and what I'd think was fair if I was trying to sell it. I got it for my price.

look on craigslist, cars.com... see what others are selling it for. get an idea what it should go for. But always remember, that used cars, unlike new cars, are all unique.

Why do you think the dealer would give you a 25% discount rather than gradually lowing the price, say 5% a week?

rufflesinc said:   Why do you think the dealer would give you a 25% discount rather than gradually lowing the price, say 5% a week?
At the end of the day, the dealer is only going to get market price, or some small premium above it. If this car sells for $8k, they aren't getting $9.995k.

Find out a what the fair market price is, and work up or down from there.

rufflesinc said:   Why do you think the dealer would give you a 25% discount rather than gradually lowing the price, say 5% a week?

because whoever traded the car in probably got hosed by the dealer, so the margin could be significant. not a guarantee, but possible.

if OP can find out how long the car has been on the lot, that is good info. the longer it has been on the lot, the more willing they will be to drop the price.

Sure the dealer overpriced it, but why wouldn't they lower it gradually to try to find someone that is willing to overpay by 5 or 10%? It costs nothing for them to cross out old price and write a new one in every week.

rufflesinc said:   Sure the dealer overpriced it, but why wouldn't they lower it gradually to try to find someone that is willing to overpay by 5 or 10%? It costs nothing for them to cross out old price and write a new one in every week.

Available capital. That someone will still be looking for a car and will still overpay one week later than the OP. Better to make two sales than one.

Maybe its easier to calculate the cost of a car coming of a lease after 36 months. There are topics on edmunds where people post the money factor and the residual value of a car. Go back three years, check for the model that is on sale now, and go from there.

Point of reference:
Residual for 2011 Sonata leased on 02/2010 was 12750 (MSRP of 21700). Returned the car with nothing wrong and the dealer turned around and listed it for $17,000, and it sold within 2 weeks. Since 02/2010 was when they first came out, there are not many 2011 models coming out of leases yet, but once they start flooding the market, the used price will probably drop to the 14-15k.

Gotta know the history of the model too.

ETA: 2 months later KBB Retail = $16600
KBB Trade in = $13300
KBB Private Sell = $14900

As a data point for MilleniumBuc's post. A couple months ago I purchased a 2011 Sonata with 28k miles for 15,200 from a local Hyundai dealer. This was about 1k above the lowest private party price I had found, however I considered it a better deal since there were more miles, flaws, and bad tires on the craigslist cars I looked at. I also shopped eBay, but nothing on there seemed to be any better at the time. eBay is a good place to get an idea for price, especially completed auctions.

Edmunds seems to be the most accurate for pricing. I'd go in low and negotiate. They are always going to start off ridiculously high, so you need to go in ridiculously low.

Great tip about Edmunds. They're showing $4700 trade in and $7000 dealer retail. I'll go look at it today.

If it's sat there for 2 months, it's sat way too long and the price is way off. $9995 sales price and 5700 trade in, I can bet you that they shafted the previous owner on the trade. Roach lots can't hold on to cars for long because they need the space to process more cars from auctions. Anything making $300 to $500 is a sale to them. Depending on the used lot, some are way greedy, some are there just to process as many auction cars as possible.

Another tip is to find out the auction prices for similar models and go offer him something close to it, if they say no just pass on it.

rufflesinc said:   Sure the dealer overpriced it, but why wouldn't they lower it gradually to try to find someone that is willing to overpay by 5 or 10%? It costs nothing for them to cross out old price and write a new one in every week.the name of the game is turnover. When you have a buyer on the hook, you reel them in because you don't know when the next buyer for that care will come in.

The dealer has a bottom line price for every car, the amount he has invested in it, that is the point they are negotiating from - as soon as your offer is above that price they know they have a deal, and it's just a matter of feeling out how much extra they can squeeze from you.. Especially after the car has sat on the lot for 2 months.

I wouldn't even negotiate - figure out what the car is worth to you, walk in, and make an offer. Either they accept, or you leave (leaving your phone number in case they change their mind). Eventually, someone will take your offer, or at least come back with an asking price you like.

Sort of unrelated, but is it unreasonable for me to ask them to either remove the dealer sticker or give me another $100 off? I don't want to advertise for them and if I have to remove it I'll have to get adhesive remover for cars (3M makes one I was reading about) and my heat gun to get it off.

Also, I did look into Bubble King, but I wanted slightly better mileage

DaGimp, I just was talking with someone who shared the same sentiment. "If they can make $500 on the sale they'll do it all day long."

christoj879 said:   DaGimp, I just was talking with someone who shared the same sentiment. "If they can make $500 on the sale they'll do it all day long."

I process auction cars in my spare time, unless it's a really nice car that I want to drive for a bit say an e46 M3, once I pick something up, clean it up and it's posted for sale. $500 to $1000 in 2 weeks ain't that bad for 1 car.

The numbers should be the other way around.

When I bought my car I looked for KBB/Edmonds retail value of $10K and the dealer asking less. I got my 05 Infiniti G35 for under $8K OTD.

Give me the make model and miles on the car and I will tell you the average going price at Manheim.

ETA: Manheim is a dealer auction.

DesiVibe said:   Give me the make model and miles on the car and I will tell you the average going price at Manheim.

ETA: Manheim is a dealer auction.



PM'ed, thanks!

PM replied

Anyone tell me the Manheim Chicago prices for baby recently sold Smart, any model , any year

Thanks for all the great info so far. No go yet (this one had a broken sunroof too) but negotiations were easy.

While the "if they can make $500-1000 on the car they'll take it " theory sounds logical its not always the case .

I found a Mercedes 500sl at a used car dealer in an unusual color I liked. It was a 20 year old car with nearly 200k miles so I figured I could get a deal, as nobody shopping for a "transportation appliance " is going to consider a car of that age and mileage

So I sat down with the boss and told him "look I know you're here to make a profit , how about I pay you $1000 over your costs ". He was matter of fact , and told me he got the car for $1200. So obviously there was no way in hell he would sell it for $2200 or even $3200 as non running parts cars sell for more. His advertised price was $5985 and he was going to keep it on his lot till he found a sucker to pay that much.

And eventually he did .

So dealers are not always desperate to take a deal as long as there's a profit . A lot of times they will hold till the right sucker comes along

Im sure there are public sites that you can buy a repo, consignment... for trade value. I know i did on my motorcycle (repo).

JaxFL said:   Im sure there are public sites that you can buy a repo, consignment... for trade value. I know i did on my motorcycle (repo).

Can someone point me to these public sites?

The experience was interesting. As I said before, the sunroof wasn't working. I was told they'd get it to work for me, but having just owned that same line of car I know that sunroofs are a PITA to fix and keep working properly if/when they do break.

We got in to the office to talk numbers, and he brought out the 4-square. Not sure why, as there was no finance or trade in, but I figured he was just doing his job.

I started at $5500 considering there were some issues - huge scratch on a wheel, ripped weatherstripping, trim piece sticking out and the sunroof. He "went to his manager" but almost in a going-through-the-motions way as he knew I wasn't going to go a lot higher.

He even brought out a piece of paper that showed that they "bought" the car for $8400 then put $1200 into fixing it. Uh-huh. Then he asked me "could you do $8500?"

They were all very nice but in the end we all decided it would be for the best that they investigate the sunroof before we talked any further numbers. I won't be back, but it was a good experience to stick to a number and walk out when it didn't work.

Sunroof issues, eh? Are we talking about a Mercedes?

christoj879 said:   .

I started at $5500 considering there were some issues

I won't be back, but it was a good experience to stick to a number and walk out when it didn't work.

Given the numbers you posted, $5500 may have been a bit aggressive for a 'take it or leave it' offer rather than a negotiating starting point. You do want to be reasonable to have credibility, and the KBB prices do already factor in the assumption there are some of the issues you were discounting for. But it was a good start.

I went with my sister a few years back to sell her 2-year-old Mustang. I figured I would look at dealers selling the same car, see what they were selling them for, and offer to sell hers for like $2,000 or so less -- I figured that was a more than fair profit. I found a dealer selling a same-year Mustang (but with higher miles) for $16,000. He looked my sister's car over, said it was "immaculate," and noted it had fewer miles. I said we'd sell it for $14,000. No dice. "OK, you'll list this one for $16K or $17K, but maybe actually sell it for like $15K, so how about $12,000?" Nope. $10K? No. The highest he would go was $8,500 -- he wanted to double his money.

A few other dealers provided similarly lowball offers, until we finally went to CarMax and got $10,000.

Moral of the story? I'm not sure, but for whatever reason, dealers don't seem to be as happy with $2,000-$5,000 profits as I'd think they would be.

/CSB

AlwaysWrite said:   I went with my sister a few years back to sell her 2-year-old Mustang. I figured I would look at dealers selling the same car, see what they were selling them for, and offer to sell hers for like $2,000 or so less -- I figured that was a more than fair profit. I found a dealer selling a same-year Mustang (but with higher miles) for $16,000. He looked my sister's car over, said it was "immaculate," and noted it had fewer miles. I said we'd sell it for $14,000. No dice. "OK, you'll list this one for $16K or $17K, but maybe actually sell it for like $15K, so how about $12,000?" Nope. $10K? No. The highest he would go was $8,500 -- he wanted to double his money.

A few other dealers provided similarly lowball offers, until we finally went to CarMax and got $10,000.

Moral of the story? I'm not sure, but for whatever reason, dealers don't seem to be as happy with $2,000-$5,000 profits as I'd think they would be.

/CSB


Dealers know how much it will cost to get your car at auction / what they would get for it at auction if it doesn't sell. The fact that they are listing it for much more doesn't mean they'll get it and they know it.

Edmunds numbers looks nice when buying a car but you'd never be able to buy a decent/nice car @ edmunds price...

I don't get it, why do people sell car to dealer when CL gets you a more $k more?

Bc dealing with ppl in person sucks.


I only use eBay to sell cars and I hate the few who want to personally pay and pickup the car, most of the time these are problem buyers

Interesting. $8,500 is half way between Edmund's retail and dealer's asking price.

ZenNUTS said:   I don't get it, why do people sell car to dealer when CL gets you a more $k more?

Because CL not always great place to sell. Everybody looking for great deal there.

I was selling my car at CL in 2 states for very fair amount 10K (car was in great condition, prices as Fair to sell) - nobody even ask for it in one state and got "great" offer of 7.5K in another over few month. CarMax gave me 11k. In matter of month they sold it for $15K for some sucker who could have it for 10K, oh well, yep, without CarMax logo on the back... BTW, I bought this car 4 years ago for 14.5K from dealer (off 16.5K they were asking)

$7,500 is way too much for a Vic.

Skipping 71 Messages...
Off lower than you want to pay and work up to your price. If after 2 or 3 numbers back and forth they're not coming close, just leave. They'll call you the next day, they always do. I just bought an SUV and it's amazing how many of them want to make a deal. Also don't take it hard when you lose a deal. Like they say, "you win some. You lose some."



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