How to choose counteroffer price when negotiating for a used car?

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First post! I did search but did not find this exact question answered.

I'm looking to buy a vehicle at a dealer (German vehicle at German dealer) and would like some pricing help. I don't know how to suss out the dealer's lowest price point and where to place my first counteroffer. Details:

  • The dealer recently dropped the price $2k to $30k after the car had been sitting on the lot for 4 months. The car is a 10k mile lease return with 30 months of warranty left.
  • KBB dealer price is $31k.
  • KBB wholsale price is $28k.


The car has a couple of things going against it. It's black, which isn't as desirable for this model. Also, though it had a $45k sticker when new, the new model year this year at that price is such a technological upgrade that the one I'm looking at feels a bit behind now. And it's located 10 hours away.

I'm not sure where to make my first counter offer and what price to hold to. My gut tells me it should be somewhere around $27k (10% below list), but given the wholesale value at $28k that may be too aggressive if I hold to it. The option package I want is not that common, and there are maybe 10 cars in the country with this package for sale right now on the major websites.

If anyone has access to mannheim auction pricing or other expertise, I'd love to hear from you!
 

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Interesting, buying cars from Dealers for Fun and 'Profit'

forbin4040 (Feb. 27, 2017 @ 1:44p) |

except, OP was / is a TROLL.

Mickie3 (Feb. 27, 2017 @ 7:10p) |

Why do you accuse me of being a troll?

RT55 (Feb. 27, 2017 @ 8:00p) |

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Why the vagueness? If you really want help then post details.

@jason745 Do further details help? I'm not sure how. It's an Audi A3.

2016?
80% of MSRP selling price
CPO?
Cost to dealer for Audi CPO ~1500

Get a 2014 off lease S5

RT55 said:   The car has a couple of things going against it. It's black, which isn't as desirable for this model. 
  Says who. Apparently it's desirable enough for you.

Look at Edmunds in addition to KBB, sometimes they provide very different numbers.

Also check http://www.nadaguides.com/ for vehicle pricing. Between KBB, Edmunds, and NADA you should get good idea. You dollar amount sounds fine. Worst they do is say no and you up offer or walk away.

Late model used cars are generally a 'dime a dozen.' Not like you're buying a vintage something or another where there aren't thousands more just like it. You desire for a particular trim/option package is something informing your willingness to pay, not necessarily what the market will bear.

Offer lowest price you're willing to pay that might get accepted. Find who the internet sales manager is, e-mail them your offer. They will let you know.

New car sticker is irrelevant, used car market is main factor. The fact that new model of same care is out and better is likely already getting reflected in the used car market pricing.

Check the eBay "sold" listings filter to get specific examples of actual selling prices.

28k out the door.

Negotiation is art, not science. Spit ball it.

Doing a nationwide search on cars dot com, I see that there's 21 a3's in a bunch of different colors with under 10k miles and priced under $24k including some with 2.0 engine and with quattro. Without knowing anything other than the model and color (you haven't said what engine or trim for the one you are looking at) I'd offer $24k

2016 a3 awd 4 door premium:
01/10/17 Ohio Regular $25,300 9,660 Avg White 4GT A Yes
01/05/17 Pennsylvania Regular $24,000 20,175 Below Black 4GT A Yes
01/05/17 Ohio Regular $25,500 2,170 Avg Gray 4GT A Yes
12/23/16 Pennsylvania Regular $24,200 9,884 Avg White 4GT A Yes
12/21/16 Central Florida Regular $22,000 10,968 Below Black 4GT A No
12/19/16 Atlanta Lease $24,800 12,553 Avg Gray 4GT A Yes
12/17/16 Digital Marketplace Regular $26,200 5,616 Above 4GT A Yes
12/14/16 Utah Regular $25,000 2,546 Avg Silver 4GT A Yes
12/14/16 Seattle Lease $26,100 10,542 Above Black 4GT A Yes

I would ignore how much the dealer has already come down from initial list price and the listed KBB retail price. I would look at the trade-in price on KBB, Edmonds, NADA, etc. and try to get a good feel of "wholesale" value and then shoot for 300-500 over that. Dealer will not sell for less than they can get at auction and probably will not sell for less than wholesale plus a little to cover their overhead.

If you can get the car somewhere between that and those sold on eBay, you are doing pretty good. I would imagine that the ones on eBay are sold fairly low to cover the risk of being sight unseen and the additional costs of shipping.

What are the potential disasters here?

A) Offer too high - price is accepted and you overpay by X and get a car
B) Offer too low - dealer is so upset and insulted he blocks you from ever dealing with him.

A) becomes a bigger and bigger deal as X grows.
B) Typically the dealer counter offers, or ignores your bid if it is too low. You're welcome to up your bid, and typically there is no penalty for resubmitting.

GreyRabbit said:   What are the potential disasters here?

A) Offer too high - price is accepted and you overpay by X and get a car
B) Offer too low - dealer is so upset and insulted he blocks you from ever dealing with him.

A) becomes a bigger and bigger deal as X grows.
B) Typically the dealer counter offers, or ignores your bid if it is too low. You're welcome to up your bid, and typically there is no penalty for resubmitting.

  It is categorically impossible to insult a dealer. I know, I've tried.
 

I never discuss anything other than the otd price. Otherwise some dealers sit there punching their calculators & magically the car has added costs in the total.

So I'd figure tax & license. Then present that figure as otd.



Also how popular are these? Are there many on car lots?

Well you have to have 2 or more cars that you like. If there is only one, you are screwed. You have no leverage to walk out. The best way to negotiate is when you are ready to walk out and you mean it. In this case you are not, dealer will screw you.

king0fSpades said:   Well you have to have 2 or more cars that you like. If there is only one, you are screwed. You have no leverage to walk out. The best way to negotiate is when you are ready to walk out and you mean it. In this case you are not, dealer will screw you.
  
Of course there's leverage, they made thousands of cars if not hundreds of thousands, there's always another one that will pop up later even if you're stuck on a particular model. You just walk out, sometimes there's no leverage. Used car dealers seem to be tougher on pricing than new car dealers. New car dealers I think pay less for their cars because it's typically a trade in whereas used car dealers buy them at auction. Private party gives you the best price but usually with mostly new cars, you don't really find too many of them sold directly by owners. In terms of mileage, I prefer a newer car with higher mileage than an older car with lower mileage. Cars typically last anywhere from 150-200k these days or more. You'll pay more for a car with 10k vs 20k, but it won't really matter much when the car has 130k or 140k. 

RidicuRuss said:   
If you can get the car somewhere between that and those sold on eBay, you are doing pretty good. I would imagine that the ones on eBay are sold fairly low to cover the risk of being sight unseen and the additional costs of shipping.

That's not how car sales work on eBay. They're nonbinding on eBay for vehicles just like real estate. It's little more than a Craigslist ad.

http://pages.ebay.com/help/policies/non-binding-bid.html

henry33 said:   
 
  
Of course there's leverage, they made thousands of cars if not hundreds of thousands, there's always another one that will pop up later even if you're stuck on a particular model. You just walk out, sometimes there's no leverage. Used car dealers seem to be tougher on pricing than new car dealers. New car dealers I think pay less for their cars because it's typically a trade in whereas used car dealers buy them at auction.
 

  You are so right. I always forget that time is on my side...

NADA and edmunds are both slightly higher than KBB. KBB tends to be more realistic and up to date IMO, so I went with that one. The clean retail prices are pretty close but Edmunds and NADA don't have all the options to select and are $800-1200 more for trade/wholesale. So it's priced now about $30k. Wholesale on this car is $28k KBB, $28.8k Edmunds, and $29.2k NADA. The A3 I'm looking at has quattro and the 2.0 engine and mostly loaded. My guess is KBB is closer to reality than the others (NADA is BS).

I will be offering from a distance and doing a fly and drive, if I buy it. This one is in good condition and was originally a lease that the owner couldn't afford and traded in for a cheaper car at a sister dealership, so I would be buying from the same dealer that originally sold the car. 

Also, something I have read about wholesale, dealers pay to have cars auctioned, so they get a better return for selling the car to you at wholesale than paying to have it auctioned. I wonder if this is true?

Edmunds TMV on a NEW 2016 2.0 gas Premium Quattro Sedan is $31k with no options.
That's with a warranty start date the day you drive it home.

I'd want to beat that price by at least $5k, allowing maybe half of MSRP for the options I want, and pretty much nothing for the options I don't want.

OP: have you even seen and driven the car you are so worried about the price of?

I think offering 28k is too high. The dealer would prefer to sell it themselves rather than auction it off. A low mileage recent model year audi is great for an audi dealer to sell. They'll acution off a high mileage malibu all day long b/c they don't want that on their lot. My guess is the previous owner got SCREWED on their trade in. If they are dumb enough to buy an A3 that they can't afford, they proabably got a horrible deal all around. I'd offer 26k OTD and see what they say. Don't forget you are flying/driving so that's gonna cost you 1k I'd bet in ticket, mileage, gas, etc. A

wp746911 said:   I think offering 28k is too high. The dealer would prefer to sell it themselves rather than auction it off. A low mileage recent model year audi is great for an audi dealer to sell. They'll acution off a high mileage malibu all day long b/c they don't want that on their lot. My guess is the previous owner got SCREWED on their trade in. If they are dumb enough to buy an A3 that they can't afford, they proabably got a horrible deal all around. I'd offer 26k OTD and see what they say. Don't forget you are flying/driving so that's gonna cost you 1k I'd bet in ticket, mileage, gas, etc. A

Thanks wp746911. I've got a FF ticket and can do this in a weekend trip, so likely it will cost under $500. It's still my cost but not that high, plus I like to drive. I think you're DEAD RIGHT on the previous owner getting screwed. The dealer said they swapped it for a used Toyota.

@mickie3 I haven't driven the car but I've driven a number of other identical models of the same year, and owned a 2014 A4. The reason I'm looking for this info, is I bought the A4 new in another country, and got f'ed in the A when I had to sell it 10 months later when i moved for work due to economic conditions and a soft market. I was only able to get back 40% of what I paid for it, a mistake that cost me more than the price of the car I'm looking at now. So I'm f'ing gunshy now.

@taxmantoo I just ran an Edmunds TMV is $39k for a new car with these options.

RT55 said:   
wp746911 said:   I think offering 28k is too high. The dealer would prefer to sell it themselves rather than auction it off. A low mileage recent model year audi is great for an audi dealer to sell. They'll acution off a high mileage malibu all day long b/c they don't want that on their lot. My guess is the previous owner got SCREWED on their trade in. If they are dumb enough to buy an A3 that they can't afford, they proabably got a horrible deal all around. I'd offer 26k OTD and see what they say. Don't forget you are flying/driving so that's gonna cost you 1k I'd bet in ticket, mileage, gas, etc. A

Thanks wp746911. I've got a FF ticket and can do this in a weekend trip, so likely it will cost under $500. It's still my cost but not that high, plus I like to drive. I think you're DEAD RIGHT on the previous owner getting screwed. The dealer said they swapped it for a used Toyota.

@mickie3 I haven't driven the car but I've driven a number of other identical models of the same year, and owned a 2014 A4. The reason I'm looking for this info, is I bought the A4 new in another country, and got f'ed in the A when I had to sell it 10 months later when i moved for work due to economic conditions and a soft market. I was only able to get back 40% of what I paid for it, a mistake that cost me more than the price of the car I'm looking at now. So I'm f'ing gunshy now.

@taxmantoo I just ran an Edmunds TMV is $39k for a new car with these options.

  $39k is a new car.. Remember you are buying used and try to buy only if you are getting a great deal on an exceptional car.  You can fly to Michigan and get one for $26k plus tax. CarsDotCom search 
$29k for the car would be paying retail and if you're here you shouldn't be paying retail. 

RT55 said:   
henry33 said:   
 
  
Of course there's leverage, they made thousands of cars if not hundreds of thousands, there's always another one that will pop up later even if you're stuck on a particular model. You just walk out, sometimes there's no leverage. Used car dealers seem to be tougher on pricing than new car dealers. New car dealers I think pay less for their cars because it's typically a trade in whereas used car dealers buy them at auction.

  You are so right. I always forget that time is on my side...

NADA and edmunds are both slightly higher than KBB. KBB tends to be more realistic and up to date IMO, so I went with that one. The clean retail prices are pretty close but Edmunds and NADA don't have all the options to select and are $800-1200 more for trade/wholesale. So it's priced now about $30k. Wholesale on this car is $28k KBB, $28.8k Edmunds, and $29.2k NADA. The A3 I'm looking at has quattro and the 2.0 engine and mostly loaded. My guess is KBB is closer to reality than the others (NADA is BS).

I will be offering from a distance and doing a fly and drive, if I buy it. This one is in good condition and was originally a lease that the owner couldn't afford and traded in for a cheaper car at a sister dealership, so I would be buying from the same dealer that originally sold the car. 

Also, something I have read about wholesale, dealers pay to have cars auctioned, so they get a better return for selling the car to you at wholesale than paying to have it auctioned. I wonder if this is true?

  You're so stuck on this 1 car that you must have missed my post where I told you how to find one with low miles, the 2.0 and quattro for $24k before negotiation.

Thanks to everyone in the thread who contributed. I offered $28k and got it - too easy. There were a few dings on the car when I showed up to buy it along with some road rash on the front end. I still felt it was a good deal and bought it, and did the touch up myself. After the honeymoon period I could not get comfortable in the car, so I listed it and sold it for $28k to a private party (no taxes paid). One dealer said they could have bought the same car at Mannheim auction for $26.5k.

During my experience, I started calling dealers to see if they would buy it. I got ranges from $21k to $28k, the average being $26k. The high offer was a 3.5 hour drive. I think this is a better method for determining value. Get on the phone and call dealers with a VIN, let them punch it into their computers and give you a verbal offer. Then offer the person selling that price or 5% below Mannheim, if they have had the car for a while.

PS this car had a rare option package, which is why I was interested in it. I wasn't interested in a base model for $21k. The car was basically a loaded S3 without the tune, which can be had for about $400. In car terms, for car guys, it was a great value at that price point.

RT55 said:   After the honeymoon period I could not get comfortable in the car, so I listed it and sold it for $28k to a private party (no taxes paid). 
  How did you get a title without paying sales tax?

atikovi said:   
RT55 said:   After the honeymoon period I could not get comfortable in the car, so I listed it and sold it for $28k to a private party (no taxes paid). 
  How did you get a title without paying sales tax?

  
I'm assuming he's in one of those states that don't charge sales tax on a private party sale or doesn't have a sales tax. There's a few out there.

henry33 said:   
atikovi said:   
RT55 said:   After the honeymoon period I could not get comfortable in the car, so I listed it and sold it for $28k to a private party (no taxes paid). 
  How did you get a title without paying sales tax?

  
I'm assuming he's in one of those states that don't charge sales tax on a private party sale or doesn't have a sales tax. There's a few out there.

  I know, Alaska, New Hampshire, Oregon. But he didn't mention that.

I never titled the car in my name. I was an interim buyer, so no need to pay sales tax.

RT55 said:   I never titled the car in my name. I was an interim buyer, so no need to pay sales tax.
  So you jumped title? Illegal in every state.

RT55 said:   I never titled the car in my name. I was an interim buyer, so no need to pay sales tax.
  And drove it unregistered and uninsured during the honeymoon period?  At least you got your purchase price back.

No, it's not illegal. I went to the DMV with the buyer and did the transaction in person, and had asked that question prior to sale. Dealerships have bribed state legislatures to pass laws making private party vehicle sales difficult, but at least in 2 different states you can do exactly as I have done legally.

I drove it on temporary tags for 3 weeks, then bought a 3 days temporary registration for test drives and the sale. All 100% legal.

Interesting, buying cars from Dealers for Fun and 'Profit'

forbin4040 said:   Interesting, buying cars from Dealers for Fun and 'Profit'
  

except, OP was / is a TROLL.

 

Why do you accuse me of being a troll?



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