Stealership full of thieves
02-26-2010, 04:15 PM
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Stealership full of thieves
I went to the stealership today to discuss a possible trade from an 07 2dr rubi to a 2010 4dr rubi. ( I don't know what got in to me. 
) The damn sales manager comes back with a trade in value of 14K 
. I was like WTF. KBB on it is around 18K. I told them that I was planning on returning it to stock specs before trading it in and he still wouldn't give KBB value on it.. Unbelievable... 
I guess I will just continue forward with this build..
) The damn sales manager comes back with a trade in value of 14K . I was like WTF. KBB on it is around 18K. I told them that I was planning on returning it to stock specs before trading it in and he still wouldn't give KBB value on it.. Unbelievable... I guess I will just continue forward with this build..
02-26-2010, 04:41 PM
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Banks and Dealers mostly use Black Book or NADA. My buddy and I work at a dealership and clowning around he wanted to see how much his 2dr 2006 Jeep Rubi would be on trade in. It priced it out at $11K~ roughly.
Most and I do mean Most people always think the dealership screws them. Truth is the numbers that decide what your vehicle is worth is based off of what vehicles like yours are going for at Auto Auctions.
See Link:
http://www.blackbookusa.com/home.aspx?m=2&s=1&t=D&i=20
Remember, he is going to offer you what he believes he can get for it and what Black Book and NADA say the vehicle is worth.
Don't always slam the dealerships. They are a business too. They have hard working sales people that have to make money. Sure there are a few rotten apples out there, but in most cases, your gonna get the straight answer. There are too many available sources of information out there. Sadly, when it comes to trade in value, consumers still don't understand.
Most and I do mean Most people always think the dealership screws them. Truth is the numbers that decide what your vehicle is worth is based off of what vehicles like yours are going for at Auto Auctions.
See Link:
http://www.blackbookusa.com/home.aspx?m=2&s=1&t=D&i=20
Remember, he is going to offer you what he believes he can get for it and what Black Book and NADA say the vehicle is worth.
Don't always slam the dealerships. They are a business too. They have hard working sales people that have to make money. Sure there are a few rotten apples out there, but in most cases, your gonna get the straight answer. There are too many available sources of information out there. Sadly, when it comes to trade in value, consumers still don't understand.
02-26-2010, 04:58 PM
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Banks and Dealers mostly use Black Book or NADA. My buddy and I work at a dealership and clowning around he wanted to see how much his 2dr 2006 Jeep Rubi would be on trade in. It priced it out at $11K~ roughly.
Most and I do mean Most people always think the dealership screws them. Truth is the numbers that decide what your vehicle is worth is based off of what vehicles like yours are going for at Auto Auctions.
See Link:
http://www.blackbookusa.com/home.aspx?m=2&s=1&t=D&i=20
Remember, he is going to offer you what he believes he can get for it and what Black Book and NADA say the vehicle is worth.
Don't always slam the dealerships. They are a business too. They have hard working sales people that have to make money. Sure there are a few rotten apples out there, but in most cases, your gonna get the straight answer. There are too many available sources of information out there. Sadly, when it comes to trade in value, consumers still don't understand.
Most and I do mean Most people always think the dealership screws them. Truth is the numbers that decide what your vehicle is worth is based off of what vehicles like yours are going for at Auto Auctions.
See Link:
http://www.blackbookusa.com/home.aspx?m=2&s=1&t=D&i=20
Remember, he is going to offer you what he believes he can get for it and what Black Book and NADA say the vehicle is worth.
Don't always slam the dealerships. They are a business too. They have hard working sales people that have to make money. Sure there are a few rotten apples out there, but in most cases, your gonna get the straight answer. There are too many available sources of information out there. Sadly, when it comes to trade in value, consumers still don't understand.
Knowing that will always allow for some serious negotiating. I know that most dealers offered me their "auction prices" for my Jeep (16K for an 08 X with 19000 miles), but I wouldn't settle for paying more than the sticker on my new HD Ram. It took many trips to three different dealers and it finally worked out! Zero down, owing 30K on my Jeep and only 2000 in rebates, I pulled it off somehow. Probably one of the best deals I've ever put together, but just saying it's possible and you have to work at it sometimes.
ADDED: Funny thing is, the dealer is now asking 29K for my 08 Wrangler X. It's a nice jeep, but not 29K nice. They will be lucky to get 23 or 24 for it.
02-26-2010, 05:01 PM
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I wasn't expecting to get 23k or 24 k for it (would be nice but not realistic) but I was expecting to at least get KBB value for it. Hell, he had an 07 sahara on the lot he was asking right at 21k for and all he was willing to give me for my rubi is 14k. If he is going to sell an 07 sahara for 21k then he would sell my rubi for ,what, 24k??? I understand the business side of it but that seems a bit off to me...maybe I am just being unreasonable..
02-26-2010, 05:02 PM
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Very true. One of the things they factor in, but not on paper, is what they are going to do with it and they have to consider that a potential buyer is going to negotiate and close the profit margin closer to the price they paid you for it.
Give us credit. All dealers aren't shady, but we are a business. Understanding that makes life easier.
Give us credit. All dealers aren't shady, but we are a business. Understanding that makes life easier.
02-26-2010, 05:20 PM
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I wasn't expecting to get 23k or 24 k for it (would be nice but not realistic) but I was expecting to at least get KBB value for it. Hell, he had an 07 sahara on the lot he was asking right at 21k for and all he was willing to give me for my rubi is 14k. If he is going to sell an 07 sahara for 21k then he would sell my rubi for ,what, 24k??? I understand the business side of it but that seems a bit off to me...maybe I am just being unreasonable..
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02-26-2010, 07:02 PM
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Can't speak for all dealerships - every region is different, so is every dealership. And just want to start off by saying - I'm in no way trying to change people's opinion that all dealerships = stealerships.
That said, I agree with Ko-hai. Most dealerships DO NOT use Kelley Blue Book. We use the Blackbook that is printed weekly, which summarizes transaction values from regional auto auctions - classified in Rough, Average, Clean, etc. on condition. When it comes to calculating loan values for financing, the books usually used are the NADA books - most lenders will finance between 100% - 125% of NADA values. Many places will also use online auction resources such as Manheim to see what the most recent auction transactions were.
Most dealership trade-in value [often called ACV or Actual Cash Value] will be in the Average condition of Black Book values or closer to the "Fair" rating by KBB values under "Trade-in". Reason is, they have to factor in that there would be re-conditioning costs - from simple maintenance items to more expensive parts that may be needed before the vehicle can be re-sold [granted, there are dealerships that won't do much re-conditioning but probably ask for top dollar - like I said before, no two dealerships are alike].
I know, at our dealership, we also offer a dealer powertrain warranty on vehicles that are out of factory warranty. So, within the mileage/term, if the customer that bought the vehicle has a major issue - engine, transmission, etc., we take care of it - the customer is out a $100.00 deductible.
The other thing is that just because we trade for a vehicle today, does not mean that it'll sell tomorrow or next week. There are times when a traded vehicle has sat on the lot for 6 - 8 months. Most dealerships don't have cash flow to pay for the trade-in value they offer the customer; this is borrowed money that they pay between 6% - 8% interest on [usually called Floor plan interest]. When a trade-in vehicle sits on the lot unsold for months, the amount of profit margin they have disappears pretty quickly when that interest accumulates - again, things customers don't usually see. If you think that doesn't happen, just look at the Jeep Recycler section and see how many members have listed their JKs for sale, several of which may not have sold yet.
Then, there's the commissions that need to be paid, there's insurance that the dealer has to pay for all the vehicles sitting on the lot, utilities, etc. etc. So, it's not always a simple - they gave me $15K and they're selling it for $20K and making a killing off of every trade-in. At our dealership, our average profit margin on used vehicles is around $1,800.00/unit... average profit on new is closer to $1,000.00/unit - even on vehicles that are close to $50K - $60K MSRP.
Bottom line - automotive dealerships are retail businesses - not wholesale. Every time a customer walks into the dealership and gets a "stellar deal", keep in mind there's a salesperson that's also making a meagre commission on that sale. What's good for one can be bad for another. I'm not saying make a killing off of every sale - or for that matter, give every vehicle away; there are happy medians that can work for both parties.
I'm sure everything I said here is debatable - but I wasn't aiming for a debate. Just wanted to show that there's always another side to the story. In the end, everyone'll make up their own minds on what they want to believe. Remember - perception, is reality.
PS: I just hope I haven't stepped on anyone's toes about this. It just gets frustrating when every other thread has something to do with how dealerships are pure con artists!
That said, I agree with Ko-hai. Most dealerships DO NOT use Kelley Blue Book. We use the Blackbook that is printed weekly, which summarizes transaction values from regional auto auctions - classified in Rough, Average, Clean, etc. on condition. When it comes to calculating loan values for financing, the books usually used are the NADA books - most lenders will finance between 100% - 125% of NADA values. Many places will also use online auction resources such as Manheim to see what the most recent auction transactions were.
Most dealership trade-in value [often called ACV or Actual Cash Value] will be in the Average condition of Black Book values or closer to the "Fair" rating by KBB values under "Trade-in". Reason is, they have to factor in that there would be re-conditioning costs - from simple maintenance items to more expensive parts that may be needed before the vehicle can be re-sold [granted, there are dealerships that won't do much re-conditioning but probably ask for top dollar - like I said before, no two dealerships are alike].
I know, at our dealership, we also offer a dealer powertrain warranty on vehicles that are out of factory warranty. So, within the mileage/term, if the customer that bought the vehicle has a major issue - engine, transmission, etc., we take care of it - the customer is out a $100.00 deductible.
The other thing is that just because we trade for a vehicle today, does not mean that it'll sell tomorrow or next week. There are times when a traded vehicle has sat on the lot for 6 - 8 months. Most dealerships don't have cash flow to pay for the trade-in value they offer the customer; this is borrowed money that they pay between 6% - 8% interest on [usually called Floor plan interest]. When a trade-in vehicle sits on the lot unsold for months, the amount of profit margin they have disappears pretty quickly when that interest accumulates - again, things customers don't usually see. If you think that doesn't happen, just look at the Jeep Recycler section and see how many members have listed their JKs for sale, several of which may not have sold yet.
Then, there's the commissions that need to be paid, there's insurance that the dealer has to pay for all the vehicles sitting on the lot, utilities, etc. etc. So, it's not always a simple - they gave me $15K and they're selling it for $20K and making a killing off of every trade-in. At our dealership, our average profit margin on used vehicles is around $1,800.00/unit... average profit on new is closer to $1,000.00/unit - even on vehicles that are close to $50K - $60K MSRP.
Bottom line - automotive dealerships are retail businesses - not wholesale. Every time a customer walks into the dealership and gets a "stellar deal", keep in mind there's a salesperson that's also making a meagre commission on that sale. What's good for one can be bad for another. I'm not saying make a killing off of every sale - or for that matter, give every vehicle away; there are happy medians that can work for both parties.
I'm sure everything I said here is debatable - but I wasn't aiming for a debate. Just wanted to show that there's always another side to the story. In the end, everyone'll make up their own minds on what they want to believe. Remember - perception, is reality.
PS: I just hope I haven't stepped on anyone's toes about this. It just gets frustrating when every other thread has something to do with how dealerships are pure con artists!
02-27-2010, 06:12 AM
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It's not that most dealers are con artists, but the percentage of shady, slimy salesmen is too damned high, so the public gets the perception and it sticks for all.
As for trade-in value, my dad and uncle have buddies that have been in the business for years. It's a fact that there is potentially more money to be made on used vehicles than new. There are many new dealers that only sell the bare minimum number of new vehicles just so they can get their hands on off-lease and other used, late-model manufacturer sources.
The internet has allowed consumers to have a pretty good idea what a dealer paid for a new vehicle, so they know how much room there is to negotiate. As for used, it's definitely not abnormal for a dealer to pick up a trade in a sweetheart deal and make many thousands on it. Consumers may think they know what a dealer paid for a used vehicle, but quite often, he got it for far less.
Yes, there are reconditioning costs and overhead, but to lowball a clean vehicle that can be turned around quickly at high profit is shady and further reinforces the prejudice against dealers.
As for trade-in value, my dad and uncle have buddies that have been in the business for years. It's a fact that there is potentially more money to be made on used vehicles than new. There are many new dealers that only sell the bare minimum number of new vehicles just so they can get their hands on off-lease and other used, late-model manufacturer sources.
The internet has allowed consumers to have a pretty good idea what a dealer paid for a new vehicle, so they know how much room there is to negotiate. As for used, it's definitely not abnormal for a dealer to pick up a trade in a sweetheart deal and make many thousands on it. Consumers may think they know what a dealer paid for a used vehicle, but quite often, he got it for far less.
Yes, there are reconditioning costs and overhead, but to lowball a clean vehicle that can be turned around quickly at high profit is shady and further reinforces the prejudice against dealers.
02-27-2010, 08:32 AM
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It's not that most dealers are con artists, but the percentage of shady, slimy salesmen is too damned high, so the public gets the perception and it sticks for all.
As for trade-in value, my dad and uncle have buddies that have been in the business for years. It's a fact that there is potentially more money to be made on used vehicles than new. There are many new dealers that only sell the bare minimum number of new vehicles just so they can get their hands on off-lease and other used, late-model manufacturer sources.
The internet has allowed consumers to have a pretty good idea what a dealer paid for a new vehicle, so they know how much room there is to negotiate. As for used, it's definitely not abnormal for a dealer to pick up a trade in a sweetheart deal and make many thousands on it. Consumers may think they know what a dealer paid for a used vehicle, but quite often, he got it for far less.
Yes, there are reconditioning costs and overhead, but to lowball a clean vehicle that can be turned around quickly at high profit is shady and further reinforces the prejudice against dealers.
As for trade-in value, my dad and uncle have buddies that have been in the business for years. It's a fact that there is potentially more money to be made on used vehicles than new. There are many new dealers that only sell the bare minimum number of new vehicles just so they can get their hands on off-lease and other used, late-model manufacturer sources.
The internet has allowed consumers to have a pretty good idea what a dealer paid for a new vehicle, so they know how much room there is to negotiate. As for used, it's definitely not abnormal for a dealer to pick up a trade in a sweetheart deal and make many thousands on it. Consumers may think they know what a dealer paid for a used vehicle, but quite often, he got it for far less.
Yes, there are reconditioning costs and overhead, but to lowball a clean vehicle that can be turned around quickly at high profit is shady and further reinforces the prejudice against dealers.
And if it's shady to buy something for less and sell it for more, then wouldn't the whole stock market be shady?
Just a thought... Again guys, like I said before, I'm not trying to change people's opinion of the whole industry - just keep in mind that not every dealer is a crook, not every salesperson is shady.