If they had said current auction prices are 29k to justify their 32k ask I would have felt much better paying the extra money...
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What Exactly is Your Trade Worth?
- Thread starter 13COBRA
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Obviously dealers can't sell and buy vehicles at auction prices.
EDIT: Just saw your edit. I understand. They just didn't justify their price to you.
this is great information.
Even today, however, this all boils down to WHEN you are looking to buy/trade in (as a consumer, wait till quarter end!) and how excited you are about your new purchase.
People tend to make worse decisions (me included) when they really, really want something.
Oddly enough, lots of human psychology at play here.
Even today, however, this all boils down to WHEN you are looking to buy/trade in (as a consumer, wait till quarter end!) and how excited you are about your new purchase.
People tend to make worse decisions (me included) when they really, really want something.
Oddly enough, lots of human psychology at play here.
I disagree.
A perfect market makes quarterly and monthly goals get small in terms of priorities. The goal is to sell cars as fast as you can, increase the turn. The days of manufacturers giving dealers huge kickbacks for hitting volume numbers are almost out the door.
For example, in the last 3 years we have lowered our gross per vehicle retailed, however increased the turn rate of my inventory dramatically. We are more profitable now, our customers are paying less for vehicles, my service department sees more vehicles, etc. It's a win-win for everyone.
Thats kind of sweeping generalization of the entire industry though isnt it?
Some of the trends certainly differ depending on what part of the country you are in and who actually owns, or how large the franchise is. It sounds like the Co you work for understands big business better than the dealers ive dealt with.
My industry operates the same as you describe (trucking) just as any large business looking to increase value to its share holders.
A business that operates at a 90 OR on a $2b top line revenue still makes less money than one that operates at a 98 OR with $20b top line.
Some of the trends certainly differ depending on what part of the country you are in and who actually owns, or how large the franchise is. It sounds like the Co you work for understands big business better than the dealers ive dealt with.
My industry operates the same as you describe (trucking) just as any large business looking to increase value to its share holders.
A business that operates at a 90 OR on a $2b top line revenue still makes less money than one that operates at a 98 OR with $20b top line.
It's a sweeping generalization that will prove to be true.
Just a few weeks ago, I emailed some local dealers about buying my C6Z outright (No trade in as I am not buying a new car) & the best offer was $32k. I sold the car last week for $35k
That's not too terribly bad.
The dealer probably expected to sell it for $35k or so. It wouldn't be worth their time to buy it from you for $34k, then sell it for $35k.
The $1k profit would get eaten up by their salesman's cut, salesmanager's cut, etc. It would've been a loser for the store in general.
Of course, it wouldn't be worth it for a dealer to buy at 34k then sell at 35k lol. Maybe someone desperate to sell takes $32k is the idea
Of course, it wouldn't be worth it for a dealer to buy at 34k then sell at 35k lol. Maybe someone desperate to sell takes $32k is the idea
You keep bringing this car up. At the end of the day, it's a 10 year old Corvette. It's not (wasn't) worth what you think (thought) it was. $32k is more than fair for that car, unless of course you can't sell it for that because you owe more. The dealer has to make money too, they aren't a charity. $32k is the price that it takes for them to make some money and gets you a car sold. What's the problem?
First, thanks for another inside look at the industry. Great thread.
Second, I have to agree with you on this. I bought a used car in Tampa last year and heard pretty much everything you said when I was negotiating on price. I don't think I believed them at the time, but hey, I was negotiating. You know? Lol
Thanks again. I completely get it now.
The market on the C6 taked over the last couple months. Just last summer I was offered $40k for it multiple times. Unless someone really really wants it gone, why would they take $32k when you can get a few grand more with common sense & patience? I was not desperate to sell it.
The entire industry has changed an incredible amount in the past 10 years...I'm a firm believer that it will change that much or more, again in the next 5 years.
Dealers will adapt and flourish, or they will fight it and perish. Consumers are privy to the same information that dealers have now, there is no wool being pulled over anyone's eyes.
A lot of people that have a fairly late model car, need to get rid of it in order to afford the newer vehicle.
Some states require you to trade it in to a dealer in order to get the sales tax credit.
Etc etc etc.
I'm glad you weren't in either of those positions! Sounds like you got the best of both worlds!
So do you not have hold back on used? Our store puts 1k on every trade then the 800 recon. So even when they sell to an employee for 500 over "cost", they make 1500. Or in my case they tell you they took a 300 loss, (cause they didn't know i saw the back screen), when really they made 700.
Holdback is from the manufacturer, so no we don't have holdback on used.
What you're referring to is a hard pack. And no, we do not do that. Dealerships will start going away from that, as they won't be able to stay competitive in the market.
For example, if they have a $1k pack, they will have to trade or buy vehicles $1k lower than any of their competitors to keep the same profit margin, etc. By doing that, they will miss a lot of trade ins and not be able to buy them at the auction, because the guy down the street will give $1k more for the same car.
Another dying business practice.
Really awesome info in this whole post! Thank you.
Vauto calls that "velocity selling" I believe. Definitely true. Quicker turn makes more money for service and more cars on the street. That's s proven fact I would say. I am surprised you say hard packs are a thing of the past. Last time I "shopped" that to see how we stack up most dealers are still around 700ish if you combine new/used in my area.
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