Used car shopping: 1) new cardealer (used) - 2) used car dealer - or 3) private party

[bulwnkl]

I don't know what kinds of cars you like to drive, Pablo, but my wife and I have a rule of thumb by which we've come to buy cars:

Only fools buy used Hondas or Toyotas, and only fools buy new domestics. Present company excepted, of course!

The cost-benefit tradeoff is just not good. Of course, if you keep them until they absolutely wear out in all respects, that adjusts the tradeoff somewhat. Just a rule of thumb, but it applies most of the time.

 

[Jimbo]

quote:

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Originally posted by LT4 Vette:
Actually KBB has some crazy figures. I use NADA.

Thanks for the info, some used car dealers make more profit on a used car than a new car.

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That is because KBB only shows the overinflated asking prices. The real transaction price is not reported.

A car salesman (privately, not at work) told me that the used car market has a lot more customers with poor credit and the repo risk is much higher. If the customer defaults within a few months, the bank sticks the dealer who qualified the buyer with any loss.

 

[bulwnkl]

quote:

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Originally posted by Jimbo:
If the customer defaults within a few months, the bank sticks the dealer who qualified the buyer with any loss.

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Based on what?? The bank agreed to lend the money and take the risk. No sales contract I've ever seen or signed has such a stipulation. Now, the bank might not have such a cozy relationship with that dealer after that, but they don't have any legal way in the world to do that to my knowledge.

 

[eljefino]

I know someone who had a real junky cutlass ciera... was full of rust holes and worth $200. But the dealer "gave" him a KBB value of $1200 on it as a trade-in. Probably didn't come down on the new car price much but the inflated trade value looked like a solid down payment, percentage wise, to the bank.

Suspect if banks could prove dealers did this to them often enough they'd be mad... this is likely what goes on when a salesman promises he'll "work the numbers" for you.

 

[Pablo]

quote:

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2001 TOYOTA COROLLA 152K 4 door, LE, auto, air cond., sharp $9995

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Yeah right......

 

[Tosh]

I think using the KBB trade-in value (good or excellent condition) is a fair price when buying from a private party. This value is what they'd get if they traded it, and it seems pretty close to or slightly above "wholesale" value. But you'll need some patience and experience to figure out how motivated the seller is and his maintenance and driving habits. I have been very pleased with spending 65% of retail for my car (1.5 years old and 28k) and about 70% of retail for a friend's car (1 year old and 22k). We both got exactly what we wanted, down to options and color (and neither one of us feels foolish for getting a used Acura).
But time is money, and I can see the argument for having to buy new.

 

[ex_MGB]

I will always buy new. Vehicle technology continues to improve. A new Mazda3 is a better vehicle than a used Lexus of the same price and will cost way less to maintain for the next 150k miles.

 

[Tosh]

I'll take your bait, XMGB. Just for giggles I looked on ebay this very minute and found a 2002 IS300 SportCross w 43k. I think this is the Lexus model most comparable to the Mazda3 hatch. It has a buy-it-now price of $20850 and a KBB trade-in value (excellent condition) of $20025, which is about what a new loaded Mazda3 might go for. I am sure the Mazda gets better gas mileage, but a 'better vehicle' in any other way? Which would you rather have? Tasty, refined, reliable Lexus wagon, please!
IS 300 sedans are available even cheaper. I think you would be surprised at what reasonable prices late model upscale cars go for.
PS. Ebay item no. 4558505674

 

[ex_MGB]

Well, to each his own, but I'd rather a new Mazda3. In my case, I wouldn't buy off e-Bay. If I were going to spend that much on used, I'd want to go through a dealer with a previously owned certification type program warranty and now you're up to 26k for that Lexus.

[ July 01, 2005, 03:24 AM: Message edited by: ex_MGB ]

 

[Tosh]

XMGB,
The only thing the certification program does is certify that the dealership makes a lot of money on a used car sold at 'used retail' price. I've seen 'certified' used cars with mismatched no-brand tires, paint work, and no service records (not all at the same time). Extended warranties can be purchased if that's important to you.
"If I were going to spend that much on used" sounds like you're placing a lot of dollar value on the knowledge that something is brand new, or in a 'known condition.' Alright, "to each his own," but I think I'll spend the time and effort to determine the condition for myself and for the same money buy something nicer than a new economy car.
There are some things I will pay retail for, but a car is not one of them, unless I have formed some kind of emotional attachment...

 

[Slick17601]

Some banks offer dealer financing where the dealer gets a percentage of the interest. I.E. the bank give the dealer a base rate of say 8%. The dealer can then mark up the rate up to whatever the customer will pay or the state usury rate. The Bank then requires recourse of the loans. In other words if a loan goes past due and they lose money on the repo, the dealer shares in the loss.

 

[mikemc]

quote:

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...Depreciation is a moot point if you kep a vehicle a while, and extract proper utility from it... resale value is fools gold if you sell it early, youre still loosing money and never extracted proper utility from the vehicle. The best bet is to buy the car you want at a reasonable markup from invoice/discount rom MSRP, and keep it for a LONG time. Youll never loose out with that tactic.

JMH [/QB]

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That is exactly what I have decided is best for me personally. I find a new vehicle that has the features I want, wait until the rebates are attractive and then offer the dealer invoice minus all rebates. If they don't take it, there are other dealers. I usually keep a vehicle over 4 years so the difference in price over a late model used is worth the peace of mind of knowing I got a new vehicle with no question marks in its past.

 

[Patman]

Keep in mind that those little used car only lots are buying their cars from the auction. And the cars which get sold in auction are the ones that the dealerships did not want, due to higher miles, or less than perfect condition (mechanically and/or visually)

So if you want to find the best condition used car, you'll find it on the used car lot of a new car dealer. Or a private sale. I don't like private sales though, I just worry about possible risks.

Buying a used car from a new car dealer can often cost you big $$$, but sometimes you can find a deal. When I got my 98 Corvette from the Infiniti dealer last summer for $33,000 CDN, it was priced about $5k less than similar low mileage 98 Vettes in the Auto Trader. And my car is in near showroom condition, with lots of nice upgrades too (the upgraded chrome wheels alone would've cost me $2000!)

 

[obbop]

When looking at used vehicles sold by a private party I tell the seller I want my girlfriend to have a comfortable ride so.... before I test drive it, look the car over and under and within, I have the owner take me for a ride so I can "experience the car as my girlfriend in the passenger seat will."

I don't care what a passenger thinks..... what I hope to determine are the driving habits of the car's owner!!!! If the current owner has owned the vehicle for all or most of its life I can determine how hard that car's life has been.

Quick acceleration and sudden stops? Warning signs, to me. Does the driver operate the vehicle in a manner that indicates intelligent operation that lends itself to long vehicle life? Then I'll dig into the vehicle deeper. Generally, the majority of motoring numbskulls treat their vehicle as a throw-away device with little to no consideration of vehicular longevity.

 

[Mr Nice]

Patman,
How much is $33,000 CDN in US dollars ??

Hopefully in 3 or 4 years my wife will let me get a used low mile Z06 if I am good.

 

[Islandvic]

obbop, that's a great idea!

 

[Patman]

quote:

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Originally posted by LT4 Vette:
Patman,
How much is $33,000 CDN in US dollars ??

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Roughly $27,000. At the time it was a very good deal, although the prices have come down even more since last summer.

 

[LVHospiceRN]

I sold cars for two years...quite an education...

I sold new toyotas and used cars...usually cars we took on trade...at the time, Toyota was HOT...we routinely added our own sticker to the MSRP and then added a $500-$700 "protection package" and anywhere from $995-$5000 "market adjustment" price to the car/truck. This gave us a huge amount of profit potential and "room to dicker" with people coming in. The protection package was added on by the lot kid who washed the car...a bit of spray on scotchguard and a can of undercoating was the primary adds. Oh yeah, a Protective film, that was sprayed on the car then wiped off...nothing more than a "detailer spray" i think.

Most salesmen, i was, are on commision. Of course you want to sell the car for the highest dollar amount you can get. Everyone talks about "repeat customers" and "repeat sales" but for the most part, its just the here and now. Car salesmen frequently change dealerships so the repeat sales arent usually a huge deal to them.

One gimmick we used still makes me laugh. Toyotas in solid black were hard to find. We told the customers, commonly called "ups", that black was a ceremonial color in Japan. In honor of that, Toyota only producted a few black cars...and there were fully optioned in honor of the status Japan felt toward them...i even got to where i could say that with a straight face and never had a customer call me on it...

Anyway..my take is...
New Car Dealer: Obviously new cars have advantages, mostly warranties and no issues with prior maintenance. Used cars usually have some sort fo warranty from there...depending on the dealer, alot of times there are useless...read the fine print...the dealership (stealership) i worked for basically offered a warranty that gave you @0% discount on parts and labor..hardly a deal.

Used Car Dealers: Virtually same as new car, however, many can be fly by nite. At least at a dealership, they are usually in business long enough that, if you have a complaint, they are still there....this is iffy with some used car dealers.

Private Party: your best deal price wise but with risks. The car maybe stolen. Check the title closely, is it in the same name as the person who is selling it? Does the seller provide a home phone number or is it just a cell phone? Can you meet the seller at his home or does he just want to meet in the "sumpermarket parking lot"? Also, if you buy the car and find the engine is full of STP to keep it from burning oil...you have little recourse...of course you can sue..which you might or might not win...but that is little good if the car is crap...

Good Luck...

darrell
sin city

 

[Mr Nice]

LVHospiceRN,

I want to know how much does a car salesman realistically make per year selling Honda, Toyota, Nissan....etc, etc.......not the high end cars like BMW, Jag, Lexus. How much commission did you make per car ??

Thanks

 

[LVHospiceRN]

quote:

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Originally posted by LT4 Vette:
LVHospiceRN,

I want to know how much does a car salesman realistically make per year selling Honda, Toyota, Nissan....etc, etc.......not the high end cars like BMW, Jag, Lexus. How much commission did you make per car ??

Thanks

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I sold cars for two years, this was back in the 90's....they, they being the sales managers that hire salesman, claim the earning "potential" is unlimited. Our top salesmen was drawing around $35000-$40000...but the "average" was much less...

Its a hard way to make a living..you have to be there practically all the time the dealership (stealership) is open. While you dont get scheduled for those hours, if a customer comes in you have worked a deal with before, asks for you, and you arent there, you split the commision with the salesman that finished "your" sale.

You have to always be in a good mood, at least when you are with customers...they want someone who is upbeat and positive..

Your job is to extract as much money from the deal as you can...this increases your check and the dealerships profit...it can involve anything from "not telling the whole truth" or "outright lying"....depending on your morals and how hard the bosses are riding you...

While the income is fairly good...if you divide that by the hours worked, its depressing!!

just imho, ymmv
darrell
sin city