By on February 28, 2009

When I was a little boy, my father regaled me with tales of magical creatures that lurked in the Ardennes Forest, the Alps and the high steppes of the Cossack Frontier. Dozens of ‘em. And yet Dad forgot the one about the Magical Depreciation Fairy. You know: the creature that lurks in vast concrete expanses that harbor shining metal dragons that enslave weaker members of our society. I shall now inform the Best and Brightest of the characteristics of the Magical Depreciation Fairy, lest ye fall victim to its devious ways.

I discovered this common, yet elusive creature in the environs of Oklahoma, where I heeded the call of a shiny Dodge Challenger SRT 8 with a manual. It was the only example of said vehicle in all of Oklahoma City that did not have dealer tack-ons, nor an adjusted market value sticker. At 2000 hours (8 p.m. for real people), the settled price for the Challenger came to $42,500, from $45,185. Trade in value for my VW Jetta TDI, $13k. Done. My plan: export the Challenger to Europe (where I will reside in three short weeks), drive it for six months, and then sell it on consignment. The broker for the deal was OK with the news from OK.

Overnight, a fat, hairy, sweating beast with golden rings and wings bounced through the lot, dusted my Jetta with depreciation dust, left dirty hand prints on my hood, and bounced on down to HUMMER to create more havoc with the already beleaguered brand.

Next morning, I discovered the value of my Jetta had suddenly and otherwise inexplicably dropped from $13k, to $10k. Apparently the Depreciation Fairy’s friend in used cars couldn’t get the promised trade-in value after calling “the markets” the next morning. The Depreciation Fairy’s friend, The “Waste My Time Fairy,” kept me in the dealership for four hours whilst we discussed, called around, and tried to find a cure for the damage caused by the mythical miscreant.

Once the Fairy’s magic started to weaken, I called the broker in the Netherlands, told him the deal was off due (to mitigating magical malfeasance), and walked out. At least the “Banish the Customers” Troll was afoot; from 0800-1230, nobody graced the Dodge dealer’s door besides myself. Seems like the dealer would kill this Troll as its keeping his three children from being fed (yes, he really did use this line).

Moral of this tale: there be but one way to keep the Depreciation Fairy at bay. Get it in writing.

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48 Comments on “The Depreciation Fairy Bedevils Capt. Mike...”


  • avatar
    Colinpolyps

    Does the word weasel come to mind (as in weaseling out of the deal)?

  • avatar
    rodster205

    I have never sold cars professionally but have bought plenty of new & used. There is one thing that MUST be known… your deal is for right now only. They minute you walk out for any reason, even if to arrange financing to come back later and “complete the paperwork”, your deal will change if it involves a trade. If you are buying outright the numbers will probably stay the same, but they will almost always pull this stunt with a trade.

  • avatar
    KixStart

    Hmmm…

    I think you’re better off with the Magical Depreciation Fairy dusting your Jetta with $3K of Depreciation Dust rather than having said fairy come by later and take a $10K Depreciation Dump on the hood of your Challenger.

  • avatar
    Robert Schwartz

    Sounds like you Dodge the bullet Mike. But why did you want to drive a Dodge around countries that sell gas for $6/gal.? I know you wanted some hot runs on the A-bahn, but couldn’t you just rent a Beemer for the occasion?

  • avatar

    I always heard that the creatures that sprang out of the Ardennes were called the 6th Panzer Army, but maybe my sources are less authoritative than Mike’s father? But I digress…

    You bring up yet another reason why car dealers are headed for extinction. Who hasn’t had this bullshit pulled on them at least once, and likely several times in their lifetime? There are several things that are guaranteed results of this modus operandi:

    * People loathe car dealers (redundant, I know.)
    * To survive, the auto manufacturers will have to dump the dealers and go to a direct sales model, using the Internet as the “showroom” AND dealer.
    * The few remaining dealers will fight, but the franchise laws that have sheltered the dealers for 75 years will be legislated out of existence because even the politicians won’t be their friends anymore.

    Good riddance.

    Oh, Mike, Kixstart is right. The light dusting on the TDI is nothing compared to the freefall that Dodge’s value is guaranteed to suffer. It won’t see its value get above water for another 35 years.

    –chuck

  • avatar
    ajla

    It sounds like your salesman wanted the originally agreed upon deal to go through, but one of his higher-ups wanted him to squeeze more out of you.

  • avatar

    OK I’d hate to feed this beast “over there”, but the “Yank Tank” aspect would rock.

    A dealer realizing he had a buyer but could play with the numbers ? I don’t believe it.

    As to the four hours…Car dealers are a lot like civil service. We will be here all day. You can be too.

    Once you realize this is an “all day” deal, you remove a potent weapon from the dealer.

    Sorry you wasted a full day on this. Get something bitchen in Europe and bring it back !

  • avatar

    I have to say that in several years of working for and with dealers, I never saw anything like this happen. Once you write the deal, that’s the way it goes.

    Just so I understand: they sat down and wrote you a purchase order, complete with trade-in value, and then the next day said they couldn’t complete the terms on the purchase order? Or was this a case where the sales manager said, “That Jetta should pull about $13K, come in tomorrow and we’ll give you a firm number”?

    I have seen used-car managers make a mistake and put a strong number on a car… but the new-car side usually makes ‘em hold to it.

    What a shame; the SRT-8 would have made a great vehicle for Europe and, given that most of the vehicles in holy Germany are Twingos or 1.8 diesels, you would have ruled the Autobahnen.

  • avatar
    kaleun

    Jack Baruth: a car with nothing bad blind spot won’t rule the Autobahn…
    And the TDi will outrun it for the sake of not having to stop every 60 minutes to refuel & repair
    With the gear ratio common in the US I doubt the car would even go that fast.
    And why would anyone use a Chrysler in Europe? Not even at $2/gallon someone wants to buy that pig, at $8/gallon I see even less demand. And do you know how expensive shop are? You have to get a 3rd mortgage to pay for repairs in of a Chrysler in the US, you will need to trade in your yacht to afford that in Europe. Especially since they need to fly in every spare part (like they charge you in the US for VW repairs)
    Except a Dukes of Hazard fan, of course…

  • avatar
    SunnyvaleCA

    I had a (female) friend who considers a car nothing more than a fashion accessory. The local Toyota dealer had her convinced she could trade in her 1990 Honda Accord with 200k miles and serious engine, body, and interior problems and get $4500 credit towards a new Prius. This was the very same dealer that put a sheet of cardboard under her vehicle to protect their parking lot from engine oil and transmission oil drips!

    I think the trick here is that the dealer wants you to spend a few days fantasizing about the new car and telling your friends all about it and about the terrific deal you intend to get. Then, when they tell you the rock-bottom actual trade in value you feel already attached to the new car and so decide to take the bad deal anyway.

  • avatar
    SunnyvaleCA

    You might get a good deal on the Chrysler here in the USA because of the bad economy. Guess what? The economy is just as bad in Europe, so you’ll lose any benefit. Also, the exchange rate isn’t as favorable as it was a year ago.

  • avatar
    rochskier

    Just a couple things:

    – Suddenly I don’t feel so bad about getting dinked $200 on my last trade-in.

    – Couldn’t agree more with the people that noted the Depreciation Fairy may have saved Capt. Mike from a hideous financial situation. Waiting sucks, but I think prices on all Chrysler products (even SRTs) are going to dip hugely in the near future.

    – From a pure bang-for-buck standpoint you could save even more picking up an Challenger R/T that comes in at 376 bhp. From what I’ve read 400+ would be achievable with very light modifications.

    – This is totally nitpicky, but the car in the pic is a Challenger R/T. Just saying.

  • avatar
    ajla

    - This is totally nitpicky, but the car in the pic is a Challenger R/T. Just saying.

    To be even more nitpicky, the picture is actually of the Challenger Concept car.

    The crosshair grill did not carry over to the production version.

  • avatar
    Paul W

    At a dealer in the small European country I call home, I saw a new Challenger R/T 2009 listed at 39k euro($49k+).

  • avatar

    @ Kixstart,

    Granted, in the US, the Challenger will have a huge turd from the Depreciation Fairy on the hood, but in Europe, its a bit different since they were never officially imported.

    Prices for the SRT 8 have held steady in Germany at about $50-55K Euro, a nice profit for anybody, hence the broker in the Netherlands.

    Also, the fuel prices, I would pay what Americans pay, since I would be fueling up on-base, at American prices… but the person I would be selling it to probably would not.

    However, importing a Challenger is a risk. They are niche vehicles that have a certain zeitgeist for a limited time. In 6 months, when it came time to sell it, would it still be in the people’s minds, or would it have been replaced by the Camaro, or new Mustang.

    In the end, the dealer pulling that stunt, and more analyzing the risks, I decided it wasn’t worth it. And the blind spots are so big in that car that a small Peugeot would easily disappear.

    And FYI, the final drive ratio on a manual would enable an SRT 8 to attain 175mph on the autobah… while getting I think 2mpg.

  • avatar
    Juniper

    Screw trade-ins. I buy new, keep em for 8-10 yrs. Take good care of them and sell them cheap to a friend of a friend or friend of a kid in need of decent affordable transportation. Don’t pay me back, pass it on.
    Too bad you couldn’t take that Challenger to Europe, you would have turned a lot of heads and shown them up front and personal what American muscle is all about. Good or bad, Don’t forget, the grass is always greener ….

  • avatar
    rochskier

    I realize that buff books are tremendously passe in these parts, but I’d also like to point out that MT did a story about taking the Challenger SRT8 to Europe:

    http://www.motortrend.com/features/travel/112_0811_2008_dodge_challenger_srt8_in_europe/index.html

    Again, just sayin’.

  • avatar
    Phil Ressler

    This isn’t the pattern of what I’ve seen with respect to how deals agreed-upon go down, but then again I haven’t bought a car yet *this* year. However, no one buys a Challenger SRT-8 or anything remotely like it out of rational thought. You just want it. So, you walk away from a $42,500 deal due to a mere $3,000 change of terms? Well, I guess you just didn’t want that Dodge.

    There’s nothing new here. Cars depreciate and they always will. Most performance or specialty cars depreciate horrifically, if you take a green eyeshade view of them. Until they get scarce and desirable enough to occasionally appreciate, just like guitars. Anyway, buy the car, drive it 8 – 10 years and sell it for what you can get. Then depreciation just doesn’t matter. Let someone get a good deal and go get your next one. Or maybe you’d like to try your luck at buying art.

    Oh, the whining…

    Phil

  • avatar

    Hey Mike, what’s the price difference between a gallon of 87 octane and Diesel up there in OKC?

    From my experiences, it seems like TDI Jettas are one of the worst cars to trade in, much better off selling on craigslist…even with the tax credit.

    Dude, I betcha you can sell that car for trade+tax credit combined to a local in Austin on craigslist. If I had more time selling the TDI from my blog post, someone from Austin would have made my day.

  • avatar
    NulloModo

    If the dealer put in writing the price they were willing to pay for your trade, then pulled it, yeah, that is slimey. If they just mused over what they thought it would be, well, they shouldn’t have quoted anything to you until they were sure, but still kind of slimey.

    Hybrids and TDIs are way down in trade value vs. this past summer however. The values in KBB and NADA are thousands above what people are actually paying at auction.

  • avatar
    mtymsi

    Did you have a purchase agreement countersigned by the dealership’s management with the $13k trade in or was this an instance where the entire deal was merely discussion and the reason you came back the next day was to get the final figures?

    In the first instance you would have a legally binding agreement, in the second nothing more than conversation.

    My guess is the second as most dealerships want to consummate a deal and deliver the vehicle on the spot, not the next day.

  • avatar
    mikey

    A deal is a deal is a deal.If the guy give you a
    firm commitment,and renaged the next day, him,and his boss are both slimeballs.Walk away and don’t come back.

  • avatar

    The dealer wrote down the figures on the back of the “four square” (as I refused to use the front of the four square sheet… insult to my intelligence and all). I had a copy of the four square. We shook on the figures.

    Apparently, its not legal and binding unless the dealership signs the sheet with the figures on it. Until they sign something… its all speculation. Hence, why we did the post, to remind all of ya’ll to have the dealer sign the figures before you leave to come back the next day to do “final paperwork”.

    I walked out on it in on principal, because I hate it when they pull crap like that. There are other Challengers out there, its not like it would be the only one I’ve seen. Dallas has A LOT!

    @ Sajeev,

    Diesel is about $.10 more than 91 octane here. TDI’s are a hard sell in OKC, especially a manual transmission. And I would sell on Craigslist, however, due to time constraints of needed to get a car on a boat bound for Europe limits this. The car is on the Lemon Lot at Tinker AFB if anybody is interested!

  • avatar
    walksatnight

    Oh man what a disappointment…..

    Snide comments from the peanut gallery above aside, the Challenger is a big, beautiful Monster and surely will be the last of it’s kind. The weather will be warming up soon and I couldn’t think of anything more fun then bombing around Europe all Spring and Summer in one! What a blast that would be.

    When it came time to move on, I’m sure you would have no trouble finding a home for it in short order and you would do fine money-wise on the deal.

  • avatar
    mtymsi

    Is there a reason you didn’t take delivery of the vehicle on the spot?

    I agree it’s a lousy business practice on the dealership’s part but it sounds like they found out they put too much in your trade.

    I spent 30 years selling cars and never saw anything like this happen.

  • avatar
    phil

    i think i know this fairy dude, he works at CarMax. bought an 07 E63 barely touched for $75 k (2200 miles). i’ve driven it for 18 months and put 46k more miles on the car (trouble free), so a total of 48, 200 miles. car is loaded and looks perfect, CarMax offer = 36k. sure glad i didn’t buy it new!

  • avatar
    cardeveloper

    I had a dealer suddenly raise the price of a 1+yr old new car about 2,500, because it was obvious I was interested in the car. They traded it about 4 months later to another dealership for less then what I was offering.

  • avatar
    carlos.negros

    I can’t imagine that this car would fetch many buyers in Europe. From my understanding, Chrysler is considered to be a very crappy brand there. I think you lucked out.

  • avatar
    walksatnight

    Nah… He’ll be just fine. Bound to enough Euro enthusiasts who want something different or American service personnel to move it without much of an issue.

    Heck look at what these guys have up for sale:

    http://www.autoscout24.de/Details.aspx?id=vfbvkmuzrerp

    I hadn’t thought about Sassy Grass Green in ages. Ick.

  • avatar
    Prado

    On my last purchase I had to deal with the Depreciation Fairy’s sister… Typo Fairy. The numbers in the contract did not match the agreement I had come to with the dealer. Typo Fairy was stubborn and would not go away until the 3rd printed contract. She almost blew the deal and wasted an extra day of my time. Bitch.

  • avatar
    kaleun

    Carlos.Negros:
    There are some folks in Europe that just love American cars.. like big cruisers or trucks. however, they have them as hobby cars and typically purchase 10+ year old ones that they get cheap.
    It requires some modifications and passing emission tests (different test method!) to legally drive it. Insurance is another problem since that category doesn’t exist, like Golf or Astra.
    Chrysler as a new car never made it thanks to their quality. Near my old home town there was a Chrysler dealer (bankrupt for 4 years) and they had quite some sales in the 1990s since they kind of claimed to sell luxury cars like Mercedes at a much lower price. Well, people learned eventually that it is not a Mercedes they bought.
    for just a show-hobby car a new charger just is too expensive. And a a normal car too
    weird (blind spots, thirsty, repairs, too large to maneuver…). and the people that are interested in those cars have internet too and know exactly what it is worth.

  • avatar
    Gardiner Westbound

    The calculator fairy is a close relative of kaleun’s typo fairy. The salesman again and again miscalculates the value of a column of figures, always in the dealer’s favor.

  • avatar
    walksatnight

    carlos.negros :

    I think he would be just fine finding a buyer. I’ve been to Kiev and have seen plenty of Chrysler 300’s there. Any shady, unscruplous type can roll in a BMW or Benz but if you have that wicked looking 300 then you are styling.

    Looks like this German outfit thinks they can turn a profit or they wouldn’t have gone through the trouble:

    http://www.autoscout24.de/Details.aspx?id=vfbvkmuzrerp

    Hadn’t thought about Sassy Grass Green in years. Ick

  • avatar

    Re-do this deal when gas is back up to $4/gallon.

  • avatar

    @mtymsi,

    Didn’t take delivery due to the figures were agreed upon at 9pm. Banks are closed, dealership is closed, general manager is in bed. If I could have taken delivery on the spot, I would have.

  • avatar
    Sgt_Joe

    Mike,

    Why don’t you look into the Exchange New Car Sales program once you touch down overseas? I believe they have them on base. They were sure pushing cars like that downrange in Iraq on the larger FOBs and in the Stars & Stripes. You’d be able to get a price below MSRP, something like 1% over invoice and then they throw on some other factory discounts on top of that. I almost bought one myself until I found out that the price of my Chevy Impala had depreciated way too much and I was upside down on the loan and couldn’t find anyone to sell it to. By my next tour I should be in a better position financially (student loans out of the way) to purchase on for cash.

    Edit: I think you have to agree to keep the car for at least a year before selling it due to the lower price, so perhaps that won’t work for you.

  • avatar
    don1967

    Mike,

    If you signed a contract with the dealer, then they can’t back out. But if you left without signing a contract, nothing was “settled” and you should kwitcherbitchin.

    Buying a car with a trade-in is a two-way transaction, and just as you want the dealer to “put it in writing” so must you.

  • avatar
    ZoomZoom

    Juniper :

    Screw trade-ins. I buy new, keep em for 8-10 yrs. Take good care of them and sell them cheap to a friend of a friend or friend of a kid in need of decent affordable transportation. Don’t pay me back, pass it on.

    There is a wonderful eloquence to this idea!

  • avatar

    @ Mike: Diesel is about $.10 more than 91 octane here. TDI’s are a hard sell in OKC, especially a manual transmission.

    That’s odd, up here it is (rightfully) 14¢ under regular and 47¢ under premium.

    Your TDI would fetch upwards of $17k here on the west coast BTW. Want me to sell it for you? ;)

    –chuck

  • avatar
    Mrb00st

    oh this BS happens all the time; I was originally going to buy my Jetta (in ’05) from Southern States VW in Raleigh (name-drop time!) Had a good price all lined up, numbers were what they should be, said “alright, i’ll be back tomorrow to finish this up and take the car home!” since it was getting late.

    Came back the next day and the price was magically 1.5k HIGHER than the day before. Said “are you joking?” and departed. No one in their right mind would continue on with a deal like that. Ridiculous.

  • avatar
    BuzzDog

    @kaleun: ..and the people that are interested in those cars have internet too and know exactly what it is worth…

    I keep wondering how long it’s going to take dealers to figure out that consumers have access to this thing called the Internet, which gives them information on new and used car values.

    I’ve even heard stories of some rascals that actually (shocking!) BUY and SELL vehicles on this thing!

  • avatar
    mtymsi

    Mike,

    It sounds like there was no one there from the dealership that had the authority to execute the deal on the dealership’s behalf. Why bother being open if you can’t sell cars? The bank would have only needed to be open if you were arranging your own financing and even if that were the case they could have had you sign one of their contracts to deliver the car. I’m sure the dealership will lose considerably more than $3k over lost business a a direct result of their actions. And rightfully so I might add. Sounds like a real Mickey Mouse operation.

    The biggest problem for consumers using the internet to determine used car values is they usually reference national data bases and vehicles can have substantial regional market value differences. They also often times don’t take into consideration that the retail price a dealer can sell a veheicle for is based on the dealer’s ability to warrant and finance. In essence, they tend to dismiss a dealer is offering a service which has a cost attached to it.

  • avatar
    KixStart

    Captain Mike, “@ Kixstart, Granted, in the US, the Challenger will have a huge turd from the Depreciation Fairy on the hood, but in Europe, its a bit different since they were never officially imported. Prices for the SRT 8 have held steady in Germany at about $50-55K Euro, a nice profit for anybody, hence the broker in the Netherlands.”

    I figured. I figured I’d redirect your thoughts and cheer you up a bit. And I got to write “Depreciation Dump.” Alliteration is its own reward.

    I can well imagine the thrill of charging up the Autobahn in this thing at 160mph and 2mpg with the wake shoving lesser vehicles right into the ditch. I’m truly sorry you won’t be living the dream.

    Ressler: “However, no one buys a Challenger SRT-8 or anything remotely like it out of rational thought. You just want it. So, you walk away from a $42,500 deal due to a mere $3,000 change of terms? Well, I guess you just didn’t want that Dodge.”

    If you don’t work for GM marketing, you should. You’d fit right in.

  • avatar
    Phil Ressler

    If you don’t work for GM marketing, you should. You’d fit right in.

    I don’t and I wouldn’t.

    Having made a thoroughly understandable emotional decision to procure a Challenger SRT-8 for his foray to Europe, Mike had an agreement-in-principle that he failed to pin down in what is an immediate-terms business. Then Mike denied himself a visceral pleasure he put a lot of effort into obtaining, for a ~7.5% change of terms. Now, I realize people do such things, but I’m suggesting life’s too short for 7-1/2 points to separate one from what he wants, when the starting price and the original spead puts him in the sphere of affording an above-median price car to begin with.

    Phil

  • avatar
    don1967

    Came back the next day and the price was magically 1.5k HIGHER than the day before.

    Let me guess…

    You spent two hours test-driving the car, then you went fishing for a “best price” quote five minutes before closing, and he lowballed you just to make sure you come back. Am I close?

    Car salesmen might be slow, but they’re not stupid. They know what you’re up to, and are not interested in helping you buy somewhere else after they spent half their shift with you. They probably make half of what you do, and all they really want is to get the sale. At any price.

    This doesn’t excuse what they do, but it should help explain it. Next time do your homework in advance, and don’t even try to negotiate until you’re ready to sign. Take it from a former car salesman… it works.

  • avatar
    Phil Ressler

    This doesn’t excuse what they do, but it should help explain it. Next time do your homework in advance, and don’t even try to negotiate until you’re ready to sign. Take it from a former car salesman… it works.

    Yes. Always has for me.

    Phil

  • avatar
    BMWnut

    Years ago I was interested in a Ford Mondeo. I went to three dealers for a quote. All worked from the same price list and gave the same 10% discount. There was no trade-in involved.

    Somehow they came up with three different numbers. I figured that if the pre-sales experience was like that, the after-sales department was going to be worse. I got a BMW 328i instead. Good choice, even if I have to agree with myself.

  • avatar
    Kurt.

    Mike,

    You might want to look into the legality of selling an American car to a European citizen. In many countries, there is a SOFA that allows American service members to bring cars from the US “duty free” but they can only be returned to the US, sold to another serviceman, or sold as scrap. This is to prevent local citizens from getting vehicles that don’t conform to local laws or have not paid the customs taxes.

    And gas today is $2.28 on base.


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