Buying a Used Car - Negotiation on Price with Dealer

motorguy

cwcw wrote: »

Please can I have some negotiation advice? My trade in is fine.

Your trade in is NOT fine - it has £500 of hidden work needing done, that you have no inclination to declare.

So sorry, no, i wont be offering you negotiation advice.

Let hope you reap what you sow.

GolfBravo

Give the guy a break.

He wants to trade in his old used car to get a newer and better used car. Dealers go through their trade in inspections (they may take it for a test drive) a few times a week, they know what to look for, and it is entirely up to them to find any issues with the car - they are the industry pros, not they buyers. As soon as they identify an issue they deduct appropriate amount from the trade in amount. They expect trade ins to have faults (this is the main reason why people upgrade cars) and they also expect their trade in inspection to miss a few less significant faults. This is one of the reasons why there is a difference between trade-in price and selling price - they fix minor faults, add their profit margin and sell the car.

They will definitely first try to "suckback" (undervalue) the trade in price anyway.

What about the other trade in wear and tear issues? Should he fix that too? What about tyres, are they brand new? How about a professional detailing before trading it in? Maybe a full RAC inspection for the dealers peace of mind and to add more faults to the list? A respray? The receiving dealer would love to get the trade in a bling-bling condition with a full tank of motion lotion and just immediately pop it on to their lot with a £2K margin.

As a customer trading the old car in you have to draw the line somewhere, and the best thing to do is to wash the car and that's it, nothing else. The dealer will not pay you for your trade in a penny more than the wholesale price. Any minor electrical faults, chipped paint, small dents, etc. don't matter. Spending £500 to fix that electrical fault will not add £500 to the trade in's value. Previous "paint protection", floor mats, mud flaps, sunroof, any extra accessories don't influence the trade in price, they will not add value to the wholesale price. Dealers are not emotionally attached to their cars, the owners are - dealers don't care, this is just a numbers game, sometimes they win a lot, sometimes less.

And yes, most dealers (even franchised) regularly use back street garages to fix their used cars.

motorguy

GolfBravo wrote: »

Give the guy a break.

He wants to trade in his old used car to get a newer and better used car. Dealers go through their trade in inspections (they may take it for a test drive) a few times a week, they know what to look for, and it is entirely up to them to find any issues with the car - they are the industry pros, not they buyers. As soon as they identify an issue they deduct appropriate amount from the trade in amount. They expect trade ins to have faults (this is the main reason why people upgrade cars) and they also expect their trade in inspection to miss a few less significant faults. This is one of the reasons why there is a difference between trade-in price and selling price - they fix minor faults, add their profit margin and sell the car.

They will definitely first try to "suckback" (undervalue) the trade in price anyway.

What about the other trade in wear and tear issues? Should he fix that too? What about tyres, are they brand new? How about a professional detailing before trading it in? Maybe a full RAC inspection for the dealers peace of mind and to add more faults to the list? A respray? The receiving dealer would love to get the trade in a bling-bling condition with a full tank of motion lotion and just immediately pop it on to their lot with a £2K margin.

As a customer trading the old car in you have to draw the line somewhere, and the best thing to do is to wash the car and that's it, nothing else. The dealer will not pay you for your trade in a penny more than the wholesale price. Any minor electrical faults, chipped paint, small dents, etc. don't matter. Spending £500 to fix that electrical fault will not add £500 to the trade in's value. Previous "paint protection", floor mats, mud flaps, sunroof, any extra accessories don't influence the trade in price, they will not add value to the wholesale price. Dealers are not emotionally attached to their cars, the owners are - dealers don't care, this is just a numbers game, sometimes they win a lot, sometimes less.

And yes, most dealers (even franchised) regularly use back street garages to fix their used cars.

No one is expecting the o/p to repair all wear and tear issues - its the fact that he is proposing not telling the dealer of issues with the car - that is underhanded and i am sure he wouldnt like it if it was done on him.

Yes the dealers are the 'experts' however for customer convenience they will tend to take short test drives and run with their gut feeling about the customer and the car.

I recently got a Golf TDI from a lovely middle aged couple who failed to point out that the car went into limp home mode when you go over 70MPH. Now is it realistic that i drive every car at 70MPH along country roads just to make sure? Their underhandedness cost me £300 to sort out.

I've a Zafira here that after an hours driving runs like a dog, but is fine on short runs. Again i'm sure the previous owner knew that. Not so easy to tell on a test drive.

02 clio with an oil leak? Easy fix? No, turned out to be the turbo oozing oil out of every seal - cant check that unless you strip the top off the engine, but i'm sure the seller had been told.

05 Golf 1.6 FSI petrol - after 10 miles the clutch starts to slip - theres another £300 bill.

04 Mondeo TDI - lovely driving car - unfortunately as my mechanic described it it starts like a 'bag of !!!!!' when its cold. Cant see how the really nice couple didnt spot it filling their driveway with smoke every morning.

And i really love the O/P's fantasy that the garage gets their labour done for 'free'. Thats a fantastic way of justifying how a £500 bill is really a £50 one. Brilliant. And irrespective if its main dealer garage rates or back street rates, labour is certainly not FREE.

So no, i'm not going to sit here and condone someone hiding the truth about their substandard trade in.

And yes, ALL customers will suffer because traders are more and more often having to budget in £300-400 in their trade in values for 'hidden problems' even when the car doesnt have any.

But no doubt that will be on here as a problem too when people get low ball bids for their trade in.

motorguy

GolfBravo wrote: »

sometimes they win a lot, sometimes less.

For info even franchised dealers are probably working on less than £500 Net profit. Small time dealers are maybe averaging £300 per car net.

You can therefore see how this can suddenly be a problem, given that the £500 hidden problem on this car will likely destroy the profit not only on this car but on the next one too.

But sure its ok to screw over the dealer isnt it?

GolfBravo

pgilc1 wrote: »

For info even franchised dealers are probably working on less than £500 Net profit. Small time dealers are maybe averaging £300 per car net.

For info, used car dealers have lot fees AND net margins. New car dealers have profit margins AND holdbacks AND generous demo car allowances. Then they have kickbacks from finance, insurance, etc. And If they were to average £300 per car it would mean that they are not even earning the minimum wage.

I have just under 10 years of experience of working for two large car manufacturers - and I had the opportunity to spend a lot of time with dealers. Contrary to what most dealers would like you to hear it is one of the most profitable industries.

colino

I'd agree with the previous advice of making the car as clean and presentable as possible and leave it at that. If however, when you get the trade in offer, which will be incredibly lower than the £4k and you start with, "it's just", then prepare to get the stock speech that, at the end, when he reminds you that the last service was "just" the special offer one and that the paintwork is "just" a little faded, etc., etc., if he is properly trained, you will be letting the car go for less!
Big organisations spend a lot of money on training sales staff, medical equipment, photocopiers, the themes are all the same. Please do not think you have come up with a new angle, we've heard it all before and if you are a "It's just" customer, preferably with a rolled up copy of Parkers in your back pocket, you will be considered fair game and get the full works.
Your logic doesn't work, if its a simple fix and you haven't bothered to attend to that, what else have you brushed over?

s_b

GolfBravo wrote: »

For info, used car dealers have lot fees AND net margins. New car dealers have profit margins AND holdbacks AND generous demo car allowances. Then they have kickbacks from finance, insurance, etc. And If they were to average £300 per car it would mean that they are not even earning the minimum wage.

I have just under 10 years of experience of working for two large car manufacturers - and I had the opportunity to spend a lot of time with dealers. Contrary to what most dealers would like you to hear it is one of the most profitable industries.

get your head out of the sand we are talking second hand trade in and second hand purchase here
NOT kickbacks and pre registered unsaleable motors (i bet the companies you have worked for have filed for chapter 11 this past 2 years too

motorguy

GolfBravo wrote: »

For info, used car dealers have lot fees AND net margins. New car dealers have profit margins AND holdbacks AND generous demo car allowances. Then they have kickbacks from finance, insurance, etc. And If they were to average £300 per car it would mean that they are not even earning the minimum wage.

I have just under 10 years of experience of working for two large car manufacturers - and I had the opportunity to spend a lot of time with dealers. Contrary to what most dealers would like you to hear it is one of the most profitable industries.

As S B has said already, you need to live in the real world for a while. New car margins are as low as £50 on say, a new Astra once a customer has got all the discounts they've come to expect.

Used cars - which is what we're discussing here - will work on a very low NET profit margin. I am not talking about GROSS profit margin. If you dont know the difference then google it or ask a grown up.

I, like S B, am a motor trader and so see it how it really is, not the 'everyones making a fortune' viewpoint you have.

Margins are waifer thin, and trust me on this, its NOT a fantastically profitable industry.

GolfBravo

s_b wrote: »

get your head out of the sand we are talking second hand trade in and second hand purchase here
NOT kickbacks and pre registered unsaleable motors (i bet the companies you have worked for have filed for chapter 11 this past 2 years too

Haha! Yes, the first one is very familiar with CH11 procedures, the second one is making a fortune. Anyway, this whole profit margin thing is a little OT.

Since you're in the car game, would you really expect a customer to advise you of all the minor and major faults? Of course not. You would expect a radiator full of stop leak. Car dealers have seen it all before, and they are all well prepared and trained for things like that. And it is their job to find these things out, you never know they may even find lots of other stuff requiring attention.

I think the best advice for the OP is to completely detach themselves emotionally from the purchase - it's just a numbers game. Make sure the car you want to buy (and not the one you want to trade in) is fine, work out the change over price you're happy with and walk away if it doesn't work out.

GolfBravo

s_b wrote: »

get your head out of the sand we are talking second hand trade in and second hand purchase here
NOT kickbacks and pre registered unsaleable motors (i bet the companies you have worked for have filed for chapter 11 this past 2 years too

pgilc1 wrote: »

As S B has said already, you need to live in the real world for a while. New car margins are as low as £50 on say, a new Astra once a customer has got all the discounts they've come to expect.

Used cars - which is what we're discussing here - will work on a very low NET profit margin. I am not talking about GROSS profit margin. If you dont know the difference then google it or ask a grown up.

I, like S B, am a motor trader and so see it how it really is, not the 'everyones making a fortune' viewpoint you have.

Margins are waifer thin, and trust me on this, its NOT a fantastically profitable industry.

Yes, I think you both are right - I forgot it's 2012 and not 2007.