By on June 9, 2016

Used Car Dealership NYC

Not all used cars are created equal.

Used cars have become somewhat commoditized in the last five years, thanks to the rise of pricing tools and third-party advertisers, but there’s still some truth behind the old school notion that every used car is a unicorn.

While most car dealers mean that each car is unique in its mileage, color, trim level, and condition, there’s one hugely important factor that most dealers would prefer you ignore: how they obtained the car.

Each car on the lot has its own story, and knowing those stories might help you figure out if you want a particular car to become part of your life story.

Used cars arrive at dealerships in a number of different ways. Let’s look at each one and learn about the path a car ultimately takes before being marked for sale.

Trade-ins

Every dealer would love to get more trades, but most dealers aren’t particularly good at acquiring them. While a dealer should have a goal of taking in about 50 to 55 percent of the trades they evaluate, in reality, most dealers are closer to 30 percent or below. The reason? There’s nearly always a large delta between what the consumer thinks his trade is worth versus the real wholesale value of the trade (or what a dealer could sell it for today at auction). The average dealer is not good at explaining this difference to a customer, which immediately causes a high-stress situation.

In fact, most dealers don’t have anything like a “trade-in process.” Smaller dealers, in particular, are likely to have “a guy” who’s been in the business a long time who specializes in putting a number on a car. Problem is, the “guy” makes mistakes. Not that often, perhaps, but when he misses on a car, he’s likely costing his dealership a couple of thousand dollars. I’ve had trades evaluated at stores like this, and the “guy” almost always misses things like worn tires and brakes, defects in the interior, scratches in the paint, etc. I had one guy swear to me that my Boss 302 needed new brake pads and rotors, just because my brand-new Hawk Blues squealed.

Bigger dealers tend to live and die by their pricing tools when evaluating trades. These are expensive pieces of software that evaluate all the similar inventory within a predetermined radius, as well as recent auction pricing. While this is certainly a more scientific way of doing things, there’s a lot left to be desired about this method, too. Aftermarket equipment is almost never considered, and trim level isn’t typically weighed as heavily either. A “value price” or “one-price” store typically looks at what price it will take to be the most competitive in the market, subtract their reconditioning cost and desired profit margin from the sale, and — boom — there’s your offer.

What’s reconditioning cost, you may be asking? That’s the amount of money it will cost a dealer to bring the trade up to retail standards. At most reputable dealers, that includes brakes and tires at a minimum, but it certainly doesn’t have to mean OEM-spec tires and brakes, and often doesn’t. I often enjoy walking the lots of high-end exotic dealers in Florida and checking out the absolute garbage tires many of them put on $100,000+ cars.

Dealers love trades because they don’t have to pay auction fees or transportation costs, but sometimes the reconditioning costs can be higher than they’d like. Also, at any lot that specializes in sub-$10,000 inventory, a lot of the trades coming in are “junk cars” that will go directly to auction, which can be a hassle.

You should love trades because they should, in theory, be priced a bit less than cars acquired through other methods, and the service history might be easier to get, especially if the car was originally purchased and serviced at that dealership.

Off-Lease

I’m telling you, man — the lease bubble is about to pop in a big, big way. The market simply cannot sustain the amount of residual puffing that the captive finance arms are doing now. There is going to be an absurd amount of lease return vehicles coming back into the market in 2016 and 2017, and the banks have to do something with them. Their financial struggle could be your gain, if you play your cards correctly.

Off-lease cars typically fall into one of two categories — either abused and treated like crap by their “owners” because they knew that they weren’t going to keep the cars for very long, or meticulously maintained (because maintenance was included in the lease price) and driven a low number of miles. I don’t think that it takes a rocket scientist to figure out which is which, but you’ll want to do your own inspection.

Dealers love leasing because it gives them a chance to sell a new car to a customer every 24-36 months, and they get some fresh, late-model, certifiable inventory to sell. Certification can be a love/hate relationship for a dealer, but that’s another topic for another time.

There’s almost always some serious recon to be done on a lease return. Nobody ever replaces tires or brakes on a lease return. Therefore, while the cars might be in good condition, you may end up paying a price premium for a certified lease return.

Fleet Cars

Ever notice that there seem to be a ton of 2014 and 2015 model year used cars on the market? Who on Earth buys a new car, only to sell it a year later? I used to wonder that … until I learned about fleet cars.

The vast majority of those late-model domestic and Korean cars (and, increasingly, Toyotas and Nissans) that you see on dealer lots are purchased directly from rental car agencies. While this might be setting off all sorts of red flags and danger signs in your mind, it doesn’t necessarily mean that the car has been abused (although it can certainly mean that). I have some friends who work for rental car companies, and they’ll swear up and down to you that rental cars are maintained better than any personal vehicle you’ll ever see. After all, they’re checked out weekly to see if any maintenance is required, including fluids, belts, tires, etc. As somebody who rents over thirty cars a year, I can tell you that it’s incredibly rare for me to pick up a rental car and have something be amiss. (Notable exception: I recently had a Jeep Renegade with a broken power driver’s seat. I didn’t notice because I was the same height as the previous driver, but my 6’4″ valet at Ink48 had major issues.)

For that reason, dealers love to buy rental cars. They don’t have to put much reconditioning money into them, and those vehicles tend to be well optioned (forget the old-school “rental specials” as most rentals these days are at least mid-level trim) and in easy-to-sell colors. However, there is a big downside for a dealer, which is that these cars are incredibly commonplace. It’s difficult to convince customers that the seven 2015 Impala LTs that you have are in any way, shape, or form different from the ones that the guy has across the street.

That means good news for you, because if a dealer is buying fleet cars, he’s got to be competitive on price, which means that you can work a great deal on a low mileage, late-model car. If you really find yourself fancying an Impala, Malibu, Fusion, Town and Country, Altima, Sonic, etc., then there’s no reason not to check out a fleet car.

The Auction

Ah, the auction. If you’ve never been to one, you should try to find some way to do it. It’s a pretty cool scene. However, if you really like cars, you might find it disturbing to see them being treated so differently as they pass through the lanes.

The auction is the bane of many a dealer’s existence, a necessarily evil that he must endure because he can’t trade for enough cars to stock his lot. And there aren’t a lot of belles of the proverbial ball passing through the auction lanes, either.

Why? Well, a car typically ends up at auction for one of three reasons:

  1. It’s an off-make, and the dealer doesn’t typically do well with those — meaning that a Chevrolet store traded for a Lexus, and they can’t move them. That’s not such a bad thing, although it’s rare. A lot of those cars simply end up getting moved around dealer groups or sold to friendly stores.
  2. It’s one of the previously mentioned “junk cars.” The dealer can’t or doesn’t want to put the necessary money into reconditioning the car, or it’s super high-mileage and/or dated.
  3. It’s a car that the dealer can’t sell after months of trying. This is the most common reason for a car to be auctioned, and it’s also the most disturbing. Think about it: a dealer is so desperate to get a car out of his inventory that he’s literally willing to take whatever somebody will give him for it at an auction. That’s not good.

In recent years, especially since Hurricane Sandy, auctions prices have been very, very high, as used car inventory becomes more and more scarce. That’s not good for either the dealer or you, the consumer. If a dealer picked up a car at auction, it’s likely out of necessity. He probably overpaid for it, paid an auction fee, paid to have it shipped, and he might have discovered that it needed additional reconditioning work once he got it back home.

If I were you, I’d probably try to avoid auction cars. Luckily, this can easily be determined on the third-party vehicle history report of your choosing. There’s not a lot of win for you on an auction car.


There you have it, folks. While there are certainly some other ways a dealer can take in a car, these are the most common. If I were you, I’d shop for cars in exactly the order that I described them: Trade-in, lease return, fleet, and auction. A vehicle history report should help you identify each type, and it never hurts to ask the dealer to provide as much history as they can about the car. If what they tell you doesn’t match the history report, well, that’s a good indicator that you’re dealing with a shady character.

Good luck, and good hunting.

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134 Comments on “Bark’s Bites: Where Do Used Cars Come From?...”


  • avatar
    PrincipalDan

    Where do used cars come from?

    Well you see Son, when a man commits to a car the love affair doesn’t always last…

  • avatar
    dukeisduke

    The stork.

  • avatar
    bball40dtw

    Bark, I have a question. I was looking at vehicles at the Lincoln dealer I go to, and most of their used vehicles seem to have been new vehicles they leased, took back after the lease, and then purchased them at an auction (or at least that’s what CarFax says). Are they really buying these at auction? Or just buying them from Ford Credit and it’s being listed as an auction? Or is it a separate auction Ford Credit does with dealers?

    • 0 avatar
      notwhoithink

      Seconded. I’ve been looking at all sorts of CPO cars lately (Honda, Lexus, BMW) and I’ve seen on most of the CarFax reports that these cars were leases that the dealer then bought “at auction”, even if the dealer offering it for sale today was the same dealer that leased it originally. Is that auction line showing up because they bought it back from the bank and it’s counted as an auction?

    • 0 avatar

      There are closed auctions that the manufacturers and their financing arms do at some of the auctions that are only available to franchise dealers or in some cases their specific brand of franchise dealers. Ford Motor Credit holds a weekly auction here in my area. These vehicles can be a combination of what Bark mentioned above. The car may have been sold to a rental car company or returned as a lease then brought to this auction.

      You can look at the bottom of page 6 here for a little more info: https://credit.ford.com/webcontent/investorcenter/2012_annual10K.pdf

      • 0 avatar
        bball40dtw

        Thank you Bozi. That’s what I figured was happening, but I wasn’t sure. It’s not a coincidence that the dealership is selling a bunch of CPO vehicles that were originally sold there new and serviced there.

      • 0 avatar
        brettc

        Thanks for the information. I’ve been looking at some CPO C-Max cars and noticed Avis-Hertz Adesa stickers on the window. Found out that Adesa is an auction company with a location in Boston. I knew they were from a rental fleet based on the Carfax, but I had no idea what Adesa was until I looked it up.

    • 0 avatar
      Scoutdude

      Yes that is right the dealer didn’t “lease” the vehicle they were just an agent for the leasing company that actually owns the car and who usually takes possession of the vehicle on lease return. They then sell them at auction. In the case of the captive finance arms they usually sell most of their cars at closed auctions open only to dealers for that mfg that are in good standing. (years ago as a way to cut down on warranty costs Chrysler forbid dealers that did too much warranty work from their in-house remarketing auctions)

      Those auctions are either online for vehicles sitting on dealer lots across the area, or are sent to the standard auction house where they accumulate until the day of the week or month that they have the in-person closed auction.

      It sounds like the vehicles you are seeing have been through an online process. The dealer who took it in can actually fully inspect it, often has inside knowledge of the vehicle having serviced it, and doesn’t have to pay shipping fees, so they are likely willing to pay a little more than the guy across the state that hasn’t seen it in person and who would have to pay to have it shipped.

      Many former rental cars also go through the auction process with a good chunk of those going through the mfg’s remarketing auctions with those lease cars. The deals that are often set up for those fleet buys are designed to provide those late model used cars to their dealers. For example to get the best price per unit the mfg may stipulate the model mix, 20% base, 50% mid range, 30% top model, color mix, no more than 20% white. The mfg will then agree to buy back a certain percentage of that fleet at a predetermined price but only those units below a certain mileage, that haven’t been in a reported accident, ect and again at a certain model and color mix.

      Now when those lease and rental cars don’t sell at the closed auction the mfg will send them to the standard open auction. When the crash first hit the local dealer auction had one lot stuffed with Chrysler LX cars that just wouldn’t sell either through the closed auctions (probably hurt by cutting off so many dealers) or the open auctions.

    • 0 avatar
      ldl20

      Some of these cars may also be program cars and/or employee cars. My B-I-L works for BMW NA in Woodcliff Lake, NJ, and by the time he trades in a car (usually fully-loaded X5 or 3 or 5-series), he orders his next one. Barely puts 6,000 miles on a car before he drops it off at this magical garage with about 2-300 BMWs and Minis, and drives off in a new one. He told me BMW auctions them off to dealers so they can sell them as CPO.

      • 0 avatar
        JimZ

        depending on where you are, “program” cars might actually be ex-rentals.

        http://oppositelock.kinja.com/dont-be-tricked-into-buying-a-former-rental-car-the-p-1770762756

        • 0 avatar
          Scoutdude

          Yes the program cars are often heavily former rental cars that the mfg bought back as part of their original agreement and those rental returns get auctioned off to dealers along with the company cars used by employees and the lease returns.

      • 0 avatar
        Scoutdude

        Yeah my friend’s dad used to work for the Ford regional office and got a new company car every 6 months and of course they usually ended up as CPO cars. Most of the time he got to pick whatever he wanted but with the fish mouth Taurus turned out to be a flop he got stuck in a string of those, but got to change them out at 3 months instead of 6.

  • avatar
    LS1Fan

    The “Guy” helped me out on both of my used car purchases.

    One- my Camaro came with aftermarket drilled rotors and upgraded calipers. Because they were hidden behind the stock 16″ wheels the dealer never knew .

    Two- my daily driver had a Remote Start system fitted to it. Dealer didn’t know about that feature either. I had to find out “the hard way” by pressing the wrong button on my keyless entry remote after purchase.

    A hat tip to the “Guy”. Your mistakes saved me money, and for that I thank you!

    • 0 avatar
      Scoutdude

      The aftermarket rotors and calipers do not add value to the price of the car for retailing it. Yes they make it more appealing to certain customers, but the average person isn’t willing to pay more for them and often sees aftermarket performance equipment as a red flag that the vehicle was abused.

      • 0 avatar

        On the last car that I traded in, the broken factory stereo was replaced with an aftermarket unit. The dealer was very anxious to get the original stereo, which I fortunately saved in a box in the attic. The car was worth more with the broken factory stereo than with the working aftermarket stereo with better features (it has the USB input that the original lacked).

  • avatar

    They come from people like me who use them and discard them like sanitary napkins when the new, bigger, better, faster stuff comes out.

  • avatar
    JimZ

    do re-pos end up at auction most of the time?

    • 0 avatar

      Repos go to auction, When I worked insurance I used to go to Southern Auto Auction in East Windsor CT to look at Repos all the time. (which as Bark mentions is a pretty cool place) The bank would look up the insurance at the time of the repo and try to claim all kinds of stuff, funny but true. The lot guys tell me several banks had them towed straight from the owners homes to one of the auction holding yards.

    • 0 avatar

      I bought and sold many repos in the past and they almost always end up at auction. Manufacturer financed repos will end up at their specific sales many times and the rest are run at various auctions including smaller local ones. The only exception that I have seen is that some of the local sub-prime lenders will offer their repos to local dealers before sending them to auction in hope of saving some cash on the fees.

      • 0 avatar
        JimZ

        are repos “supposed” to show up on a Carfax report? I’ve suspected the Ranger I bought a few years ago was a repo. ended up at a dealer (used car arm of a Ford dealer) with surprisingly low miles.

  • avatar
    gtemnykh

    Again and again, I’ve been reminded of how important the previous owner’s approach to car ownership is when I go look at used cars. Year and mileage takes a far back seat to maintenance and good old pride of ownership. I went and looked at a ’06 Sequoia with 85k miles that looked good in photos. It turned out to be a rattly, smoked in mess with a rusty looking undercarriage. I took a gamble and looked at a higher-mile ’07 (139k miles) with an impressive carfax replete with regular visits to the local Toyota dealer and it was night and day. Additionally, it originally spent much of its life in southern IL and as a result the frame looked very clean. Even the tires were OE-spec Bridgestone Duelers, that’s how good the previous owner was about getting all work done at the dealer (not that I particularly care for those particualr tires). The car with 138k miles drove like it barely had 50k on it. Conversely, the 85k mile unit felt much more worn both in terms of cosmetics, and how it went down the road. The lower mile car was being sold by a “high end used import” outlet in a worse part of town (probably bought at auction), the clean 138k mile Sequoia was a trade in at a Buick dealership in a very nice northern suburb outside of the beltway.

    • 0 avatar
      Felix Hoenikker

      This!
      Plus I automatically disqualify a car for purchase that has been smoked in. The residue is a top coat of carcinogens. Rightly or not, I also associate smoking with lack of good judgement that translates into abuse of the auto in question.

    • 0 avatar
      CoreyDL

      I always gawk at the offerings of that high end import used store when I pass on me way to my aunt’s house in Fishers. Off of 37 at 131st.

      • 0 avatar
        gtemnykh

        Corey this was on the South side, I won’t name names. I did once look at a supremely overpriced Montero Limited up in Fishers. fender rot under the plastic cladding, leaking valve covers, sticky transfer case, filthy interior. All yours for the low-low price of $8000!

  • avatar
    dukeisduke

    Bark, you left out part of the fleet returns; cars and vans coming back from corporate fleets. The 2008 Sienna we bought back in 2011 came from a small used car lot in East Texas (third-generation, same family owned since the 1940s) that specializes in corporate fleet returns, and in fact takes in all vehicles from Hallmark cards in this region of the country. Ours was a van leased to a fleet management company, and driven by a female pharmaceutical company rep in Louisiana.

    Ours was three years old, but had 83,000 miles on it. In decent shape, and the only reconditioning was cleaning and putting on a set of crappy disc pads at all four corners (AutoZone DuraLast Gold).

    Most of this dealer’s high-mileage two-year-old minivan returns (especially Grand Caravans) have a second life as taxis in Dallas. This is because the city of Dallas put in an ordinance years ago that all taxis in the city be no more than five model years old. This after a ten-year-old Caprice with a leaky brake master cylinder rear-ended a woman and killed her, coming off an exit ramp on LBJ Freeway.

    The accident investigation showed brake fluid running down the firewall and into the brake booster; the cabbie had been adding fluid all the time, rather than fixing it. The five year rule isn’t perfect (because there’s no mileage limitation), but it’s better than what they had. The rule caused taxi drivers to seek out the cheapest two-year-old minivans they could find, to get three more years out of. Our Sienna wasn’t eligible for that reuse as it was already three years old.

  • avatar
    yamahog

    For those of us who are willing to buy a car without a test drive, are there people who would act as auction brokers? E.g, could I have them bring my car to auction and sell it for me? And then buy an auction car through them?

    Is there any way for an average joe to figure out what auction prices are on a car? I tried signing up for manheim but they wanted to make sure I was a dealer and I’m not.

    • 0 avatar

      You might be able to find some dealer who is willing to do it but in most cases there is no value for them. Buying a car at auction with a promise from someone is tricky because you have to guess at reconditioning costs and any other problems that can come up. I only did this for a few close family and friends and even then it was a lot of work for no profit. I would never do it for a guy coming of the street and offering me some amount over auction price since I still needed to transport the vehicle, recon it, and make sure it could pass an inspection.

  • avatar
    gtemnykh

    Re: tires

    This one really chaps my behind. Nothing ruins NVH/ride/handling more than a cheap set of tires on a car. And the salesman will cheerfully crow “look, new tires!” I explain to them that if I did buy that particular car, I’d immediately be trading in their junk tires on something decent.

    • 0 avatar
      CoreyDL

      Takes an Eagle RS/A eye for tire detail.

    • 0 avatar
      dal20402

      Yep.

      One reason I was willing to travel to California to buy my used LS460, based only on pictures, is that I could see in the pictures that the tires were Michelin Pilot Sport A/S 3s. An owner who would put those on isn’t a cheapskate. And, sure enough, the car turned out to be immaculately maintained (although it still experienced the disintegrating control arm bushing issue). My indy said that except for the control arm bushings it looked new underneath.

      Super-cheap “new tires” on a used car are a big yellow flag for me.

    • 0 avatar
      dukeisduke

      Our Sienna came with three different brand tires on it. One failed on the drive home (120 miles). Fortunately, the owner reimbursed us for a set of Michelins I had put on (about $700) because he was so embarrassed. They also fixed a couple of minor issues after the sale, and gave us a Grand Caravan to drive for a few days while the work was being done.

  • avatar
    BerlinDave

    I always thought that the used car fairy came into play at some point???

  • avatar
    Corollaman

    buying from Hertz seems like a good deal, fair prices and well maintained vehicles, I would not buy a sporty car like Mustang or Camaro, most likely they got treated badly by renters who wanted to see how fast they could go, stop and turn. A family or economy car would be a better choice

    • 0 avatar
      redmondjp

      Funny Hertz rental car story from back in the 1990s. The nearby town had a Hertz retail sale lot where they sent their rental cars. I used to go check it out regularly. Lots of 5.0l Mustang notchbacks with 20K miles on them and no rear tire tread left (the obviously didn’t rotate the tires)!

      At any rate, they had the OJ-mobile, yes, a white full-sized Bronco. It was parked in the far back corner as far away from the street as they could get it. It sat there for a long, long time! The same one as pictured on that other article on this site today about the LA police department purchasing electric BMWs (great photoshop BTW).

    • 0 avatar
      threeer

      We bought our 2013 Cruze 2LT from Hertz recently. Pleasant experience, no issues with the car yet. Granted, we didn’t go for the rear-wheel drive muscle car. I wouldn’t hesitate buying a similarly-purposed vehicle from them again.

      • 0 avatar
        Corollaman

        I am in the Orlando area, good place to get a used rental, most people rent them, park in one of the theme parks all day and then just drive to the hotel or for a meal. Good roads, no snow and most of those family renters don’t smoke.

    • 0 avatar
      ChevyIIfan

      Be wary of buying large SUVs or minivans that were rentals. I can tell you tons on environmental engineers/consultants use them for sampling groundwater and well, as a former field person, can tell you those vehicles get treated… poorly.

      • 0 avatar
        highdesertcat

        Most rentals and fleet vehicles are treated poorly, or worse. Many are downright abused.

        Dealerships have received 2-yo rentals for resale with >24K miles on them that never had an oil and filter change, to where the engine oil resembled tar.

  • avatar
    Alfisti

    We were recently shopping for a small/mid size SUV with a prestige badge and I have to agree with a lot of your article after this shopping experience.

    We wanted a Q5 but could not find the options the mrs wanted (power liftgate, nav, cameras and parking sensors all round). Settled on a 2013 X3 that was not listed as CPO but BMW agreed to certify it for a further two years (total of 30 months warranty). 25,000 miles and the drive away price was about 40% less than new.

    Tyres:
    Soooo true, people tend to ignore the tyres and i found many vehicles, even at prestige dealers, wanting for tyres. Our X3 tyres were marginal and if i had not made a fuss they may have tried to sneak it through the CPO process. We drove away with brand new OEM spec tyres.

    Trim:
    Disagree a bit here, i found retail pricing reflected trim packages. FINDING out what cars had what options was insanely trying but the prices reflected the trim levels.

    Lease Returns:
    Agree a million percent here and is one reason i felt more comfortable with BMW than Audi, all maintenance was rolled into the lease.

    In regards to rentals, we bought a Hyundai Accent about 10 years ago, that was a rental return, was pretty reliable for the 6 years we had it.

  • avatar
    Land Ark

    A couple times recently I had dealers try to say that they weren’t willing to sell at the price we were trying to get the car for because they could get more for it at auction. One even pulled up Manheim listings for what cars had been selling for to try to convince me he’d be better off at auction.

    I just don’t get it. You can tell me the car would sell for a grand more at auction than what I’m willing to pay. That does not mean you are going to make $1000 more, you’ll probably still come out worse off. And the minute I try to explain that I have some understanding of how that process works and that they have a buyer right there the deal is blown up and they don’t want to talk anymore.

    Also, Bark:
    “I had one guy swear to me that my Boss 302 needed new brake pads and rotors, just because my brand-new Hawk Blues squealed.”

    You know as well as I do that no dealer is going to want to try to sell a car with squealing brakes, regardless of the quality of the brakes. Joe Q. WantsaStang is going to want a discount because of it once he takes it on a test drive.

  • avatar

    A long time ago I worked for a dealer and one of my jobs for about a month was doing the mechanical refurb on trades. (by the way the trade in guys at all the dealers in the dealer group I worked in were all pretty lite on inspection no test drives just a 30 sec walk around the car I assumed they always low balled to make up for it). We had a old warehouse with 5 lifts in it and a wash rack and detail area. All the cars from the dealer group showed up there, we had a set list to check on each car. We did an initial checklist if we found too many things off to auction it went, otherwise we checked the brakes and throw on pads and turn rotors as required do an oil change and a few other things and send them to detail. Most were late model trade in’s to our Lincoln point or Jeep dealer but the Kia dealer took in some real junk from time to time.

    • 0 avatar
      slance66

      I’ve not seen any dealer spend more than about a minute looking at my potential trade. They walk around, check the miles, then grade it a grade below what it deserves and that’s your quote. Rather than look at brake, tires, maintenance, etc. they just take the lazy approach and downgrade the condition. If you bring them junk, you win. If you bring them a damned nice car, well maintained, you lose.

      • 0 avatar
        highdesertcat

        “I’ve not seen any dealer spend more than about a minute looking at my potential trade”

        That’s because they rarely give you anywhere what it is worth in trade as part of a deal.

        The “fudge” is already factored in between the actual retained value of your trade and the actual cost of that new vehicle you’re hoping to buy.

        The buyer ALWAYS loses on the paper deal! It’s all about how much the buyer is willing to give up to have that new-car smell.

  • avatar
    slance66

    I knew you’d get around to the piece I requested eventually

  • avatar

    Nothing pisses me off more than looking at trade in value and then looking at retail value… Just because a car’s on a dealer’s lot it’s worth $5,000 more than trade in?

    Also, I don’t know why anyone would trust KBB since many dealer’s pay for and use their software! KBB has a vested interest in keeping the gap between trade in and retail prices far apart.

    • 0 avatar
      JimZ

      “Nothing pisses me off more than looking at trade in value and then looking at retail value… Just because a car’s on a dealer’s lot it’s worth $5,000 more than trade in?”

      Hi, are you aware of how the business of selling things works?

      • 0 avatar

        Name another industry where there is such a pricing discrepancy between a business selling a used item and a person selling one. Is a home listed by a Realtor worth 30% more than an FSBO? Does a thrift store sell things for 30% more than what they would go for at a Garage sale?

        Car Dealers charge more, but don’t actually add any value, they just have the benefit of being in “closed markets” like factory auctions.

    • 0 avatar
      stevelovescars

      Yup, that’s why I like to buy cars from FSBOs. I get to meet the previous owner and see what kind of car person he/she is, what else is in their garage, and how clean they keep it. Seriously, with a used car, as this article implies, you’re buying the previous ownership as much as the vehicle. AND, I can buy the car for a lot less than a dealer who, frankly, offers me very little value in return for the markup.

      Other than CarFax, previous maintenance records are usually destroyed by the dealer as to isolate the previous owner from the next guy. Buying from the owner directly often nets me a folder full of receipts. Was the timing belt done? When were the brakes last changes? Coolant, you get the picture.

      The one time I bought a used car from a dealer (a Mercedes) the car went a week before a radiator hose blew and stranded my wife on the freeway with our baby in the car. I had been assured by their supposed inspection. I understand that there isn’t really a way to check hoses, but if I had bought the car from the previous owner and knew that belts and hoses were original (75k on a 15 year old car) I would have had them all changed out proactively as I usually do.

  • avatar

    “If I were you, I’d probably try to avoid auction cars. Luckily, this can easily be determined on the third-party vehicle history report of your choosing. There’s not a lot of win for you on an auction car.”

    Seriously? lol. No…seriously?

    Way too much to get into here about how this blanket statement is extremely misleading and inaccurate…

    Where exactly do you think dealers source their inventory from? 75-80% are from auctions, sorry to tell you. CARMAX sources from auctions. Franchise dealers source from auctions. Everyone uses the auctions and, no, ‘prior auction history’ is absolutely ZERO indication as to the quality of a car.

    Where do you thing DTAG runs their rentals? Hertz? Fox/SIXT/etc.? Where do you think captive lessors run the cars their dealers DON’T keep? Where do you think fleets runs units, by the piece or by the dozen?

    An auction is merely a way of getting true wholesale market price for a vehicle.

    As for your ‘three reason why,’ have you even been to a wholesale auction lately?

    Such a ludicrous YahooAutos-esque statement.

    I’m really not trying to come off as brusque, but my God…

    And suggesting buying a rental car. Good luck with that.

    • 0 avatar
      slance66

      Maybe. But my personal experience has been that you the consumer must be much more cautious with an auction sourced car than with one that came in directly via trade to the dealer. That may depend on the dealer, but many here, including luxury franchises, slap cheap Chinese tires on them, mark them up and put them on the lot. They don’t so much as run a vacuum over the carpets.

      • 0 avatar

        You’re using auction car as a catch-all descriptor for a below-average sled. When in reality an auction car can be anything from a current year program demo with 10 miles on it 220 year old $300 junker.

      • 0 avatar
        brettc

        Found that when I looked at a CPO C-Max at a local Ford dealer. Inside definitely hadn’t been cleaned since it came from the auction. I wasn’t sure if they were trying to make negotiations easier for the potential buyer or if they were just lazy. It did have the factory Michelins at least, but it needed a good interior detail.

        • 0 avatar
          Scoutdude

          But I bet that is the way all of the cars on that lot are no matter where they were sourced. They aren’t going to detail a car just because it was a trade and not detail another car because it was an auction car.

          Really dealers don’t treat cars differently based on where they purchased it, whether it is in pricing it or reconditioning it. Yes car a may need more recon than car b but hopefully that was figured in from the beginning.

        • 0 avatar
          HotPotato

          That’s good. Those Michelins are a custom model for the car. They’re extremely good tires, but not cheap.

      • 0 avatar
        Scoutdude

        As mentioned in the article sometimes a car that is take on trade just doesn’t “fit” on that particular dealer’s lot so it goes off to auction. For example the BMW dealer isn’t going to want that 2 year old Hyundai on the lot that the guy that just got a big raise traded in on a new 3 series. So that perfectly fine Hyundai gets picked up at auction by a Mitsubishi dealer that is trying to add a little class to his lot.

        I also don’t think that the dealer is going to spring for new Michelin for a car because it was a trade. He will put on the same Mayrun as he does on all cars that need tires that pass through his lot.

        However in general a new car franchise dealer will keep the best of the late model trades of the new car line(s) he sells. But that doesn’t mean that a good chunk of their inventory is not those lease/rental/corp returns that went through the auction process.

        • 0 avatar

          Actually, that Lexus dealer is DEFINITELY going to keep a two-year-old Hyundai for their used car department as its an extra-nice ‘switch car’ for someone who cannot qualify for a Lexus but still wants a late-model vehicle. Heck, even if its a 2006 Santa Fe, that lexus dealer might keep it as long as the mileage is low and the condition is excellent.

          Again, lot of market-dependent variables at play.

          • 0 avatar
            Scoutdude

            Speaking of market dependent variables I had a customer years ago who’s business model revolved around those market dependent variables. He liked to buy at auction in Utah and claimed the prices were usually much less there. He would fly down with a tow bar wrapped in a blanket and usually bring back two cars at a time. He would also take VW’s to CA and frequently bring back Subarus.

    • 0 avatar
      Scoutdude

      Well those are 3 valid reasons why a dealer would send a trade to auction, or in the case of #3 send a car back to auction to turn it back into cash that they can hopefully use to purchase a unit that will actually turn in a reasonable period of time.

      But as you noted the auction is where many of the lease return, mfg use, and former rental cars end up too.

    • 0 avatar

      Try reading it again, this time with less anger and vitriol.

      I said there’s not a lot of win for the customer. Do you deny that dealers pay more to acquire vehicles at auction, on average, than they do on trades?

      • 0 avatar

        It goes without saying that aquiring a vehicle off the street whether by a trade-in or private party sale can be cheaper than buying a car at auction, but one cannot live off souring inventory off trade-ins alone regardless of the type of dealership you are.

        All I’m saying is a car having auction history does not make it a bad car.

        Also, I guarantee you a dealer – especially a franchise dealer – is NOT going to cut you a deal on a car just because he paid less for it.

        • 0 avatar
          Scoutdude

          I was going to say essentially the same thing. A smart dealer bases the asking price on what the market will pay, not on what he paid for it. The reality is that a car won’t be bought if the dealer doesn’t think he can make his minimum acceptable profit. Anything made more than that on a particular unit is gravy and is used to offset the fact that sometimes you don’t end up making that minimum profit on other units for whatever reason.

          If the going price for a 2yr old 24K mi Family Truckster CUV in the “not so bleh” trim level is $19,500 it will go on the lot at $19,999 whether the dealer paid wholesale at the auction or bought it for $1500 under wholesale as a trade.

          • 0 avatar
            slance66

            Yet I find some dealers price straight at market and others at an uplift over cost. Those that price over cost often have cars that are great deals and terrible deals on the same lot.

            I was at one such dealer two weeks ago. One car I liked, and was priced really well, sold that morning. Another I liked was priced $3k too high. I’ll wait until they’ve had that one 90 days thanks.

          • 0 avatar
            Scoutdude

            Is he basing on price or pricing some vehicles as loss leaders to get you on the lot with the hopes of flipping you into something with more profit because that other one “is already sold”?

            But yes I’m sure that there are dealers out there that just tack X% or $X onto what they paid for the vehicle. That doesn’t mean that they know what they are doing though. That means that the are leaving money on the table on some deals and sitting on others until there is no profit left in them.

          • 0 avatar

            The majority of my inventory I price at below market value. I use AutoTrader, Cars.com, and CarGurus for the bulk of my advertising, so my listing are competing with CARMAX and new-car franchise dealers, meaning my pricing has to be aggressive because I’m trying to pull middle to upper income middle class suburban people FROM those franchise stores to by my vehicle out of my 40-car ‘dirt lot’ (its not literally dirt) used car dealership.

            Of course, I have a LOT less overhead than the big guys do, so I can take a much slimmer deal while still making a decent profit for myself and the company.

            In fact, I used to by a few cars a week from the Ford store in Tarpon Springs for that reason. Their internal ‘packs’ and PDI-run-through costs virtually obliterated any respectable profit margin on lower-priced cars ($2-7k). Me on the other hand – aside from real money spent on recon – pack $300 for the house and move the unit.

            By running small, tight, and aggressive, I can eeek out a decent living doing something I enjoy and still sell a ‘nice’ product versus the typical used car sled most other places tend to offer.

            Most of the time, if I see a smewhat decent profit on a car, it rolls. I can always find another Jetta, another Malibu, whatever. If its something nice and hard-to-find, I do ask the money for it. But we make our cars are right, so I don’t have any qualms about it. Nothing is worse than selling junk…and not telling people its junk.

            I think being forced to live in a 10-mile radius of your dealership would cause alot of used car dealers and used car departments to reconsier how they do business.

  • avatar
    Frank Galvin

    I loved the auction buying experience. A friend of a friend had a nice gig going – small amount of cash to him and he’d take the buyer to the auction. Adesa is the larger auction house for the Boston area and their big auction was run out of a closed GM factory. Very easy back in 2006; grab the run lists, check out the vins on Carfax and be prepped for the next day. I got a 62k 2000 Accord LX for under 10k (with all fees / charges etc) that had been traded at a Jaguar / BMW store. One owner – we checked it out, saw the owner’s manual had been left which contained the most elegant old lady penmanship noting her rigid adherence to the factory recommended service schedules. Also, she had left her cataract glasses in the glove box with a bottle of factory touch up paint. Car needed nothing for the next 130k miles.

  • avatar
    threeer

    Then there is the humorous case of finding your recently sold 2004 Lancer Ralliart Sportback (that you listed on Craigslist…with 171k and a BLOWN engine) being advertised as a “no problems” vehicle with 126k actual miles (and a picture on the ad showing it). Never mind that I have a picture from May (of 2015!) showing miles then of 162k. How does one even go about rolling back a digital odometer???

    • 0 avatar

      How to replace the cluster or if the odometer gets a reading from the engine management computer there’s another way involving a computer program in the OBD2 hook up…

      … at least that’s what a friend told me

      • 0 avatar
        threeer

        nice friend…

        • 0 avatar

          A guy actually came by my lot one day about two years ago and dropped his card offering “speedometer calibration” services. I told him all my speedometers were fine, thank you very much. He then leaned in to me and said quietly, “You know what I mean when I say ‘speedometer calibration,’ right?” I told hm I did…and goodbye.

          Very ballsy

          • 0 avatar
            CoreyDL

            Hey you gotta tell me if you a cop if I as-s-you.

          • 0 avatar
            fincar1

            I knew of two cases where that happened in the 1960’s in my area. One was my old car, the other had belonged to the father of a good friend. Interestingly, each car with the odo turned back had been offered by a different dealer than the car had been traded to – leading to no way to prove who’d had the speedo work done.
            Also, at that time I knew who to go to for “speedometer calibration” – one tire shop was fairly open about it..

      • 0 avatar

        There are many ways. Some legitimate but many illegitimate. Some can be done thru an OBD2 cable and software on a laptop, others involve removing the cluster and modifying the EEPROM chip if so equipped.

    • 0 avatar
      greaseyknight

      They may have swapped in a a motor and cluster from another car, so its sorta correct. Not that I approve at all.

      As @Flybrian said, its now possible to roll back digital odometers.

  • avatar
    gasser

    Just traded in a 2009 Lexus RX 350 with 54K on the clock. The dealer didn’t even start it up.

    • 0 avatar
      dal20402

      Same with the ’13 Forester XT with 28k that I recently sold to a dealer. They walked around it, noted the one big door ding (ignoring the small ones), poked the tires (50% left), opened the door and looked around the interior, and made me an offer.

      • 0 avatar
        bball40dtw

        How’s the C-Max? I’m really tempted by the lease deals…

        • 0 avatar
          dal20402

          It’s great. Love electric-only driving. We are averaging 86 mpg overall so far, with about half our miles in electric mode. The C-Max form factor is really comfortable for driver and passengers. Sync3 is a nice improvement over MFT. Glad we spent the extra money to get the big hole in the roof. We get compliments all the time on the Ruby Red paint.

          My only complaints are pretty piddling…

          1) Michelin Energy Saver A/S tires are miserable. They may be low rolling resistance, but they have the grip and ride of a Big Wheel.
          2) No memory seats. C’mon, guys, this is the fully loaded version and it would be one lousy switch and a couple lines of code. Result is that I sit higher than comfortable so that we only have to adjust the seat in two directions to switch drivers.
          3) Interior assembly isn’t perfect; there are a couple rattles. Better than Subaru by Fisher-Price, not anywhere near Lexus standard.
          4) No way to force the Sync3 nav screen into dark mode at all times (I have the same complaint with the LS460).
          5) Nowhere to store the cargo cover. The Subie had a nice little well under the cargo floor just for it.

          • 0 avatar
            CoreyDL

            “4) No way to force the Sync3 nav screen into dark mode at all times (I have the same complaint with the LS460).”

            Ouch – Infiniti gives you a dedicated Day/Night/Off switch, and it stays where you put it til you change it!

          • 0 avatar
            bball40dtw

            My commute is only 12 miles round trip now, so the lease is enticing. I would be in EV mode all the time.

            I replaced my OEM tires last year with Pirelli Cinturato P7 Pluses. So much better.

          • 0 avatar
            dal20402

            Go for it. EV mode really is awesome. So smooth and peaceful.

          • 0 avatar
            DeadWeight

            I am genuinely discovering that the more I ignore the media, reduce buying useless $hit, get rid of the $hit I’ve accumulated and never or rarely use, focus on quality vs quantity, take on quality work assignments versus quantity/volume, and simplify, simplify, simplify everything from vehicles to food choices, the WAY less stressed I am.

            Choice is good, but there is so much choice now in everything from beer to shampoo to vehicles to insurance to technology to food items to “lifestyles” to whatever (much, if not most of which, is useless crap), that The Paradox of Choice has finally become paralyzing to many.

          • 0 avatar
            dal20402

            I’ve been trying to simplify as much as possible for years.

            Simple love life: one really-well-chosen woman, no shenanigans, no worries.

            Simple housing: buy newer houses, fix things as durably as they possible when they go wrong.

            Simple commuting: both home and job within easy walking distance of public transportation. No dealing with city parking (or its prices), save driving for fun times rather than the grind.

            Simple investment management: invest in index funds covering broader equity and debt markets, make sure allocation is right, don’t worry about the rest.

            The only things I really can’t simplify at all are my job, raising my children, and dealing with my in-laws. Those are complicated no matter how I look at it. And I just don’t have the time or mental energy to complexify anything else in life.

          • 0 avatar
            Scoutdude

            I’m going to try those Energy Saver A/S when I get back from the trip I’m taking next week. A while back I was looking for Mustang wheels on Craigslist one Fri eve. I found a set that included tires listed for $200. It was late and when I fired up the computer the next morning he had dropped the price to $100. I got there as quick as I could. Come to find out two of the tires had 9/32″ of tread. The other two had 5/32″ with one of those that had a gouge in the sidewall. On ebay I found a pair with 9/32″ of tread for less than one new so I figured they are worth a shot just to see how much they improve MPG. If I absolutely hate them I know I can get $400 for the set and I’m all in for less than $250.

          • 0 avatar
            highdesertcat

            dal20402 wrote, “I’ve been trying to simplify as much as possible for years.

            Simple love life: one really-well-chosen woman, no shenanigans, no worries.

            Simple housing: buy newer houses, fix things as durably as they possible when they go wrong.

            Simple commuting: both home and job within easy walking distance of public transportation. No dealing with city parking (or its prices), save driving for fun times rather than the grind.

            Simple investment management: invest in index funds covering broader equity and debt markets, make sure allocation is right, don’t worry about the rest.

            The only things I really can’t simplify at all are my job, raising my children, and dealing with my in-laws. Those are complicated no matter how I look at it. And I just don’t have the time or mental energy to complexify anything else in life.”

            What an excellent philosophy! +100

          • 0 avatar
            DeadWeight

            “The only things I really can’t simplify at all are my job, raising my children, and dealing with my in-laws. Those are complicated no matter how I look at it. And I just don’t have the time or mental energy to complexify anything else in life.”

            Job simplification is possible, depending on debt/no debt and propensity to keep up with Stanley Johnson (who’s up to his eyeballs in debt fronting).

            Kids, family, in-laws? THOSE are inevitable time & resource black holes (in ways both good and bad, with no certain outcomes at end of day), that REALLY require intelligence, diplomacy and patience to manage.

  • avatar
    Arthur Dailey

    My neighbour a retired mechanic recently traded his 5 year old SUV with 42,000kms (yes kms) and 2 years left on an extended warranty for a new SUV. Washed and detailed weekly (never washed or polished in direct sunlight) and meticulously maintained by himself and the dealer.

    When he showed me his new purchase, I with utmost courtesy informed him that I would have loved to have purchased it from him directly. So he provided me with the name of the dealer and we called immediately. The dealer still had it on the lot, marked up by $7k over what they had given him as his trade in value.

    • 0 avatar
      SCE to AUX

      I suspect that its trade-in value didn’t respect your neighbor’s meticulous care.

      He probably got gouged on trade, because the dealer can’t price the car so high it won’t sell. Their $7k increase probably only puts it at the high side of average used car prices for that model.

    • 0 avatar
      yamahog

      Ding! You always hear used car dealers say ‘there isnt that much markup in the price and our margins aren’t that high’

      But whenever I trade in my car, I see them list it for 3-5k more. And I know I’m paying 3-5k more than they did for the car. So how aren’t they making at least 5k on the transaction?

      • 0 avatar
        Scoutdude

        Well lets see the salesperson gets a cut off the top, then there is the fact that they had to put a new set of Mayrun tires on it, had their kid spend two hours cleaning the mung out of the interior, put new brakes on the front, had the glass guy fix the windshield and the paintless dent removal guy take care of that big ding in the passenger door. And all of that is before they pay the rent, the floor plan, licensing, insurance, advertising, secretary and the lights.

        They may not be going broke but there is a lot of overhead to running a business that must be covered before their is any profit.

        • 0 avatar
          yamahog

          Let’s talk about my case. The car I bought had factory glass, and Goodyear tires with a 3 year old build date. The car I traded in was very sound. It was listed for sale the very next day, at 4k over the trade-in price. And the car was gone a few days later.

          I’m sure dealers generally work hard for their money. But it seems like they don’t give people enough credit for solid cars. And because they live in a penumbra of crony capitalism, they don’t have to be worried about operational excellence lest someone scrappy eats their lunch.

          • 0 avatar

            You are seriously deluded about how much money dealers make on cars.

          • 0 avatar
            yamahog

            I don’t think I am. I just think that someone could do a better job of evaluating trade-ins and compete against dealers on the basis of more accurately valuing used cars. But the hypothetical company that excels at more accurately pricing used cars won’t be allowed to exist because of the barriers to entry.

            I know that dealers get burned and people try to misrepresent their cars. But the lazy dealers try to overcome their due diligence failures by under-valuing trades coming in and marking up trades going out.

            I’m not miffed at the deal that I got – I was willing to pay the price and my car is my #1 favorite but as I see it, the dealer grossed 3k on the car I bought from them, and they grossed 3k on car I sold to them.

  • avatar
    SCE to AUX

    Our (my son and I) recent purchase of a 2007 Sonata was from a reputable large dealership. They got it on trade.

    I reasoned that for them to even carry such a car, it must be in fairly decent condition; after looking around, I really didn’t want to take a chance on a second-hand lot. The car is OK (for 9 years old), but they judiciously refrained from completely reconditioning it – I get that. But it had 4 new brakes, 2 new ball joints, little frame rust, an all-OEM interior, a recent battery, serviceable no-name tires, and an oil change.

    For my part, I changed the transmission fluid, flushed the brake lines, changed a leaky valve cover gasket, installed new spark plugs and cabin air filter, and changed the engine coolant and thermostat. Next will be flushing the power steering fluid.

    The dealer couldn’t perform all this work and make a profit, and I don’t mind doing this work on a basically sound car. Most used car buyers don’t even care about these tasks.

  • avatar

    Trade In: for any dealer a trade in is the most economical and efficient way to acquire a used vehicle. Close ratios are higher than 30%, dealers are increasingly dealing with “negative equity” to close deals. Customers are not only shopping value but also diminishing the negative equity. With software dealers are increasingly “pulling ahead” customers from long term loans.

    Off Lease: dealers also pull ahead their lease customers and will buy any vehicle that the residual makes sense. If the residual is too high the vehicle is returned to the “captive finance” and usually sold at auctions which are a great platform to better justify residual losses. The residual risk is assumed by the “marketing arm” (manufacturer) and “finance arm” (captive finance). The residual hit if applicable was factored in when that vehicle was leased new.

    Fleet: in many jurisdictions a daily rental must be identified as such. Turning a rental into a CPO alleviates the stigma, while permitting the dealer to get a higher price.

    Auctions: are a financial market to sell vehicles. Many dealers on Wed mornings run 2 screens to monitor 2 lanes or 2 different auctions. Auctions are a great platform to exploit “windows of opportunity” regarding vehicles and prices.

    Dealers (franchised) that balked at CPO have been set on the right path by their respective manufacturer.

    Dealers are “suggested” to meet their off lease quotas to participate in enhanced “used vehicle programs”

    The average customer wants to pay “market price” for the “average vehicle” with at best “average reconditioning”. Customers have a limited desire to pay strong money for a really good vehicle with provenance and strong reconditioning.

  • avatar
    brentrn

    Most local major brand dealers seem to list their used cars for $2K more than KBB or other guides say is the value of the car. Can I assume this is done to put in negotiating room for those willing to haggle while getting a nice profit for those who don’t haggle? If so, what is the expected profit margin by dealers on their used cars?

    • 0 avatar

      If they make 10% of the cost of the vehicle they are doing very well. Will usually make 8% to retail a vehicle within 30 days.

      Asking more provides an initial cushion for “negative equity” in a trade in.

    • 0 avatar
      highdesertcat

      “what is the expected profit margin by dealers on their used cars?”

      The short answer is, “As much as they can get away with!” Also, “How much you are willing to pay.”

      There are a lot of variables that play into that margin, among them how much the dealership actually has tied up in that used car, what an individual buyer is willing to pay, and how much the dealer had to shave off the MSRP of the new car to make the sale.

      Add some fixed expenses like overhead, operating and administrative, and you’ll find no two dealers are exactly alike in what they need to sell for.

      But they have to sell in order to make money. A car on display does not generate income.

  • avatar
    eggsalad

    As for dealers wholesaling off cars from other brands, that’s not what I see around here. Every dealer is part of a “group”, so if you trade in your Chevy at a Hyundai dealer, they just shuffle it off to the Chevy dealer that’s part of the same “group”.

    • 0 avatar

      Except that’s not how it works. At all. The Chevy store has to buy it from the Hyundai store at a profit, regardless if it’s in the same group or not. They have different budgets.

      Every group in the country operates that way.

      • 0 avatar
        Scoutdude

        Except that is how it works. Yes some entries will be made in the accounting system that shows the Hyundai dealer made $x wholesaling it to the Chevy dealer who then shows $x profit from retailing it. The big dealer groups know exactly what sells best in each of the stores and do their best to keep them stocked accordingly. So they set up transfer pricing/store to store trade policies to encourage that transfer of vehicles to where they will sell the quickest and at the highest total profit to the corp, regardless of the outcome on one particular used car manager’s profit for the period.

        The last thing they want to have happen is for the Hyundai dealer to send it to auction and have their own Chevy dealer buy it or a similar unit for the same price plus fees.

    • 0 avatar
      Scoutdude

      Yup that definitely happens with the big dealer groups. I’ve seen some cars advertised as for sale at both Joe’s Chevy and Joe’s Hyundai even though the dealers are located across town from each other.

      • 0 avatar

        Some dealer groups also have a “central appraisal” function that reviews all the appraisals done by their dealers in a specific region. Vehicles are transferred from one dealer to another to sell them quickly.

        The originating dealer does not always make a profit transferring to another dealer.

        Better to transfer from the outset at cost than to have the vehicle age, and potentially transfer at a loss in 30 days.

        Dealer groups work on a 30 day to retail, 30 days to dispose for a total of 60 days then its gone.

      • 0 avatar

        That’s just a function of them not splitting their rooftops with their advertisers. It’s a terrible customer experience.

        • 0 avatar
          slance66

          All the big groups around here tell you they can get any used car listed at any other store they have. Most of them also cover nearly every make.

          There are clearly some dealers that are keeping many trades, and price your trade somewhat close to fairly. Other dealers give you low-ball wholesale no matter what you are trading if it isn’t their make.

      • 0 avatar

        When I was a kid reading the Auto Shopper in NJ, there was a highway Nissan dealer that also operated a dirt-lot main street buy-here-pay-here car lot to dump their less desirable inventory. Sometimes you’d see the same car in both ads.

  • avatar
    walleyeman57

    I learned long ago that it is rare to get a fair price for your trade. My experience is that before any negotiation on a new car takes place it must be determined if you have a trade. If you do, prepare for the three card Monty. If they give you a great offer on your trade you can be sure it is coming out of the discount they would give you on a new car. I usually tell them I want to deal on the new car first and that I may have a buyer for the old one. Of course, some of the shadier dealers won’t do this dance. They will work to screw you on both ends-pun intended.

  • avatar
    onyxtape

    I did my first trade in last month. (I’ve always sold my own cars on the List of Craig with great success). It was a Subaru Outback in Seattle. They offered just a little below private party market value for a fair condition (which it was – plus scuffed up paint on the bumper, scuffed up interior, torn CV joints, leaking rack and pinion, old brake pads), and they offered the trade-in sight unseen as I drove my other car to the dealer. I brought it in the next day and they took it without incident. They unloaded it in less than a week after listing it for double what they offered me (don’t know if they wholesaled it or sold it).

    For my new car, I did my research before hand and know that the price I got was around the best you can get for the area (and very close to the lowest in the nation).

    And I didn’t buy anything in the F&I office.

  • avatar
    PentastarPride

    I only buy used via private party and that will never change. I could be a millionaire and I would still buy used. Cars depreciate from day one (unless it is a Toyota/Lexus/Honda/Acura, because the fanboys and dealers believe that these cars are good for eternity, so to them there’s no difference between 0k miles and 60k miles and its priced accordingly).

    Just because I buy used does not mean I am not picky. I will only buy one-owner cars. I aim for cars that are three to five years old. I require a reasonable service history as a condition of sale, and it must have no accidents (at least not a repair requiring anything more than cosmetic work).

    My 2013 200 Limited was purchased in cash, in full for $13,500 with a liyyle over 20k miles. It was sold by an elderly lady that needed a vehicle a little higher up off of the ground like a minivan or crossover. I have a current warranty through 2019 (regular plus an extended warranty puchased by her) and saved about $3k buying used from a dealer and about $6k buying new.

    I also pay myself a car payment. I have been contributing to this fund since I worked in high school. I have never had an auto loan and I intend to keep it that way. On the other hand, my wife does buy cars new (though she paid roughly 30 percent down on her 2016 Outback to shorten the term).

    At my current rate of savings I will have approximately $50k to play with from my car fund in ten years. Of course, I won’t be using it all on one car–at most, I’m willing to spend $20k max. I keep the remainder in this account.

  • avatar
    Felix Hoenikker

    Pentastar,
    In your searches for used cars, have you run into curbstoners pretending to be the owner?

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  • Fred: The “Tech” option on my 2014 TLX had a backup camera I wanted. But for $2000 it was a bit steep. So...

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