Modern USED CAR buying TIPS & CUSTOMS

[69GTX]

Speaking of the "quality" of using new car dealerships. I placed a $500/5% deposit on a car back in 2011 at one of the biggest dealers in my area. That was contingent of checking the service history at my local GM dealership. I had seen the CarFax already. I found some serious issues 2 days later via GM service history that weren't on the CarFax. I attempted to get my money back and they wouldn't even return my calls. It took me 5 months and soliciting both BBB and the state DMV/consumer protection to get those guys to give the money back. So I'm not a believer in the "safety" of going to new car dealerships. I've got plenty of stories from failed attempts.

One time I offered $3200 to a dealer on a decent Crown Vic they had (asking price of $3600). They refused, saying it was just impossible as they were making no money. The next day, I saw the same car in the Saturday paper for $2800. I nearly laughed my butt off. I called up the salesman and told him I wouldn't even take the car at $2800. This was at one of the largest dealers in my state, and the largest in my region. They didn't even sell new Fords so this car didn't fit their inventory.

Another time I was given the run around in the show room for an hour while they were "considering" my offer of $2000 on a Dodge. The sales manager finally appears and congratulates me for buying a great car and being a "tough" negotiator. After shaking my hand, and pausing for 5 seconds, he says, "but...we can't give it to for that price...it's $2800 and yours if you want it." I didn't return to a new car dealership for over 10 years. The more I think back, the more I don't want to talk to these guys. Over the years I've read several books on new/used car sales tactics. Some of them are hilarious.

 

[Tdbo]

The gamesmanship used by car salesman is remarkable.
I think that I have had about every angle attempted on me at one time or another. The best way to get them off their game is to put them on the defensive. Example: How much do you want to pay for this car? Answer $5.00.
I have gotten to the point that I am not going to allow a salesman to hold me hostage in a showroom. That is why I buy new and initially deal with salespeople via e-mail, and then if necessary finish any details up on the phone. Only time that I go to the dealer is to pick up car/sign paperwork.
However, that model does not work with a used car. The last two experiences that I had with purchasing used cars went well.
When I purchased the truck in my signature, the dealer refused to go lower than 9K when I visited the dealership. Two weeks later, they put it on line for $5600. I negotiated another $100. off over the phone, bought it, gave them a deposit over the phone, and picked it up that night.
In 2001, I bought a 1994 Chrysler convertible off a small lot.
He quoted $4250 out the door. I came back with $3700 OTD for the next 10 minutes. I explained that time is money, and my time standing on a car lot is worth $300. an hour. Therefore the billable time will start when I hit the start button on my cheap Casio chronograph, and my offer would be reduced by $50. for every 10 minutes that I wait. He was back in 5 minutes to tell me that I just bought the car for $3700.
My advice is:
1. Don't fall in love with a car. Be prepared to walk.
2. You don't work for the salesman. If he tries to put you in a defensive mode, flip the dynamics on him/her.
3. Do your homework in advance, know the value of the vehicle.
4. Make psychology work for you. For instance, if you have a smartphone, put the KBB app on your phone and make sure that you use it in front of the salesperson. Whether or not the KBB value is relevant, it shows that you have done and will continue to be an informed buyer.
5. I discovered that if you sit down a table with a salesperson and put together an offer in front of them using a TI Business Calculator, it freaks them out. I guess they like the people that have to remove their shoes to count to twenty.
Just remember there are plenty of cars for sale, and the dealer that you deal with needs to make the sale to garner income. You don't need to make the buy.

 

[hattaresguy]

The new car sales business model has changed over the past few years. You see new car lots with large used car lots because that is where all the money is made. Selling new vehicles is a very low profit margin business, OTOH these days especially with the insane value of used vehicles they are a great margin product.

Shop around, your price point is low enough that manufacture really doesn't matter. You need to figure out what you want and get one in good shape. If you look a bit you can figure out what the market is.

That's a tough price point for a truck these days, your going to be shopping rougher vehicles.

For example, my buddy just sold his base 2010 Silverado WT to Carmax for $8k. IMHO its a $6k truck; base zero option regular cab in so so shape. From what I have seen Carmax will put it on the lot for $15,999 than finance it. So their profit margin stands at $5k-$6k+ for that vehicle. That's more than the Chevy dealer that sold it to him for $19k back in 2010 made!

Carmax will get that number simply because they will finance it, and offer some sort of warranty. A private buyer can't compete.

 

[cptbarkey]

just hurry up and buy a car/truck/moped so we can have more threads about that vehicle.

 

[javacontour]

Originally Posted By: SumpChump


Any advice on how to "properly " complete a private party transaction for $7-10,000 dollars? Somehow giving a check to a stealership seems less risky. I guess that's all in my head. Have my wife witness the signing of the title by the seller, then perhaps a simple bill of sale . How's it work for payment? They come to my bank and a personal banker prints a check in front of their eyes? I know that I'd never give a $10k car keys over just left with a personal check into my hands if I were the seller.


I usually do such transactions at my bank.

If they don't bank with the same bank, they bring cash which I immediately deposit. I sign over the title and we all sign a bill of sale. My bank offers Notary Service, so I can have this notarized by an impartial 3rd party.

No big deal.

If I'm buying, I offer to go to the sellers bank or my bank to get the money to give them. If we both bank with the same bank, no actual cash changed hands. The "money" is taken from my account and deposited to the sellers.

If I'm buying or selling for more than a couple grand, we are meeting in a bank somewhere.

 

[dareo]

1. Try to buy something brand new, the deals and financing make it worth while. I like used cars 5k or less, 12k for used? No thanks.

2. If you buy used, buy at or near trade in price, preferably private party.

3. Private party deals are easy, buyer seller car and bank/credit union get together for about an hour.

 

[dishdude]

Originally Posted By: dareo
1. Try to buy something brand new, the deals and financing make it worth while. I like used cars 5k or less, 12k for used? No thanks.

2. If you buy used, buy at or near trade in price, preferably private party.

3. Private party deals are easy, buyer seller car and bank/credit union get together for about an hour.


I feel the same exact way.

 

[SumpChump]

Originally Posted By: dareo
1. Try to buy something brand new, the deals and financing make it worth while. I like used cars 5k or less, 12k for used? No thanks.

2. If you buy used, buy at or near trade in price, preferably private party.

3. Private party deals are easy, buyer seller car and bank/credit union get together for about an hour.


Tough order to fill:
A. Avoid cars over 60k miles
B. Buy only under $5k

I wonder if i'd ever find one.

 

[The_Jeff]

In 2004 I got my sister an 01 Hyundai Accent with 52k miles for $3600. Still under factory warranty to 60k.

I bet the horrible mitsubishi crackerbox will depreciate to this point.

 

[Dave Hess]

Econoboxes are very affordable and run great for little money.

 

[Wolf359]

Originally Posted By: Mr Nice
Econoboxes are very affordable and run great for little money.


Luxury cars are a bit more and are great fun to drive. You do pay for it, but if you can afford it, there are no regrets.

 

[69GTX]

Originally Posted By: dareo
1. Try to buy something brand new, the deals and financing make it worth while. I like used cars 5k or less, 12k for used? No thanks....


$3K per year new vs. $1K per year used. Which is a better deal?

Consider my 2002 Lincoln. It's MSRP/dealer invoices new were $38.8K/$35.6K. That owner traded it in 7 years later with 22K miles and got something in the $7K-$10K range for it. The absolute best they could have done was spending $25K/7-8 yrs, approx $3K/yr...assuming no financing charges which isn't likely...and no maintenance costs. I paid $9K cash for it in Nov 2009. I've gotten 6 yrs out of it at 68K miles. It's still worth $3K-$4K. So my cost per year is $916. That sure seems a lot better deal than $3K per year. If I include the maintenance (tires, brakes, 1 front axle, fluid changes, radiator) it comes out to be $1,265/yr. I could include insurance as well but the 1st owner's insurance was certainly a LOT higher than what I was paying. I've been around $400/yr.

In my mind, this car was pretty close to new in 2009, less than one fourth of original MSRP. I too like used cars for $5K or less. It's just not very easy to pay that for well maintained, 1 owner cars with 20K-35K miles, at least not in a full-sized car which is what I've typically owned.

 

[Wolf359]

You can eat ramen noodles every day and save tons too.

Eventually when you've saved enough money and you can afford it, it's ok to spend it.

 

[Silverado12]

Originally Posted By: Wolf359
You can eat ramen noodles every day and save tons too.

Eventually when you've saved enough money and you can afford it, it's ok to spend it.


That's pretty much my thoughts exactly. I'm currently driving my son's old Cavalier we traded for my Challenger, and I'm wondering how long I can stand driving a Cavalier. Life is short. Live it up a little.

 

[hattaresguy]

Originally Posted By: 69GTX
Originally Posted By: dareo
1. Try to buy something brand new, the deals and financing make it worth while. I like used cars 5k or less, 12k for used? No thanks....


$3K per year new vs. $1K per year used. Which is a better deal?

Consider my 2002 Lincoln. It's MSRP/dealer invoices new were $38.8K/$35.6K. That owner traded it in 7 years later with 22K miles and got something in the $7K-$10K range for it. The absolute best they could have done was spending $25K/7-8 yrs, approx $3K/yr...assuming no financing charges which isn't likely...and no maintenance costs. I paid $9K cash for it in Nov 2009. I've gotten 6 yrs out of it at 68K miles. It's still worth $3K-$4K. So my cost per year is $916. That sure seems a lot better deal than $3K per year. If I include the maintenance (tires, brakes, 1 front axle, fluid changes, radiator) it comes out to be $1,265/yr. I could include insurance as well but the 1st owner's insurance was certainly a LOT higher than what I was paying. I've been around $400/yr.

In my mind, this car was pretty close to new in 2009, less than one fourth of original MSRP. I too like used cars for $5K or less. It's just not very easy to pay that for well maintained, 1 owner cars with 20K-35K miles, at least not in a full-sized car which is what I've typically owned.


Their are two problems with your example:

1. It was 2009, now its near as makes no difference 2016. The used car market is vastly different.
2. The model you bought depreciates like a used tissue.

It was snowing a bit this morning so as I was drinking my coffee I scanned Carmax for used WT's. IE regular cab Chevy Silverado's, 2wd. They seem to have depreciated $1k or less per year! I saw a number of 2011's that I know sold for $18k new for $12k-$14k!

I saw my WT's twin, a 2005 for $12,995! I paid $7500 for the same truck with half the mileage back in 2009!

They had a number of low mileage 2014's for the same price as new! Heck one was lower option than my Ram, one year older, and had 10k more miles for the same price that I paid new!

Used truck prices are insane, IMHO a horrible buy right now.

 

[dishdude]

Luxury cars still can be a deal used, but it's been a few years since I have come across a 2-3 year old mainstream car/truck/SUV that I felt was a better value than new. The worst are the certified ones that people buy, and then add on the extended warranty - they spent more on that than a new car would be!

 

[Dave Hess]

I buy new and drive for 15 years.

 

[dishdude]

With the way the used car market is right now, as long as you buy and sell it right, you can trade every couple of years and do pretty darn good.

 

[HTSS_TR]

Originally Posted By: Mr Nice
I buy new and drive for 15 years.

My limit is 25 years or 500k miles whichever is first.

My Lexus LS400 is 22 years old and only 380k miles, so I have 3 more years or 120k miles to go, most likely time is coming up first.

The E430 is only 16 years old and less than 200k miles, it will be in service for 9 more years. The S2000 will be kept forever or until I died.

 

[69GTX]

Originally Posted By: hattaresguy
Their are two problems with your example:

1. It was 2009, now its near as makes no difference 2016. The used car market is vastly different.
2. The model you bought depreciates like a used tissue...




I just looked in my area and there's a carbon copy of my 2002 fifty miles away on a dealer's lot with 55K miles for $4950. Yes, it is the 2016 model year. And I'll stack this car used up against buying something new in 2016 and see who does better. If I were looking, this one would make my list. Might be able to get it for $4500 or less. I'd say the car has held its value fairly well over the past 6 years. It should do even better the next 6 years.

2002 Cont 55K