Dealer sold last car for more than I paid new!?

[mckennar]

So we traded our worn out 2015 Mazda CX-5 (worn out after 30k of my treating it like a rental car and teaching the wife to drive stick on it) on our new 2016 Trail in early June.

When we bought the Mazda, it had been on the lot for 7 months because nobody buys stick shifts here anymore. We bought it, with 26 actual miles on the clock, for a shade under $19,000.

I feel we got a pretty good deal. It was a base sport 6 m/t with the all weather floor mats and cargo mat, cargo net, rear bumper protector, mud flaps, fog lights, Class III hitch (haha), and a roof rack.

So when we went to trade it in, I was afraid that it was just going to go straight to the auction lot because it took so long to sell initially. In fact, a large portion of the negotiation conducted revolved around what I thought was fair trade value for the thing, and what the dealer thought it was.

We settled on $15,200 which is more than we owed but less than I wanted (I'm greedy, but also lazy and hate selling used cars to people that aren't dealers). They needed to put a new windshield in and replace some wear items like brakes and tires which knocked the price down a bit.

So anyway, the dealer put it up for $21,500 on the front row of their pre-owned lot. The wife and I had a good chuckle and thought nobody could be that stupid to spend $21.5k on it... the Mazda dealer down the street had a bunch of NEW (and better equipped) 2016's listed for less than that with fewer than 100 miles on them.

It lasted all of a week before someone bought it. Wife and I are dumbfounded.

I talked to an employee of the dealer (our kids go to the same day care) and he said the final sale price was $19,250 with no trade in.

Why would anyone pay that much?

 

[BrianSD_42]

Why would anyone pay that much?

Could just as easily ask why would anyone ever "trade in" a car to the dealer.

Btw they try to get you talking about how much you owe so they can give you just barely more and you'll feel good. But how much you owe has no relation to the value of the vehicle. It is just another way that the dealer gains leverage over you.

 

[ZebRuaj]

On the flip side, new owner didn't do their research on that model or couldn't afford the terms of a brand spanking new model.

For every person who think's they are a car nerd and frequent a car forum, there are 1000 (give or take some zero's) who don't.

 

[mckennar]

Could just as easily ask why would anyone ever "trade in" a car to the dealer.

Btw they try to get you talking about how much you owe so they can give you just barely more and you'll feel good. But how much you owe has no relation to the value of the vehicle. It is just another way that the dealer gains leverage over you.

Having owned and sold close to 20 cars privately in my lifetime, I'd much rather take a few grand hit at the dealer than have to deal with the one - in - ten douchebags who think that because they bought a car from you they're entitled to a lifetime of tech support on the thing.

I know why they bring up how much you owe... we owed substantially less than $15k on it. Their first offer was $14,900-something. Trade-ins ranged from $15k - $16k regionally on the same car. And needing a windshield, brakes and tires, I felt comfortable with $15,200 and whatever change. All told, the whole thing took about 20 minutes. Vs. dealing with punters for weeks at a time with a private sale... I value my time more than that (though not very much, apparently, as I spend a good deal of it on this site... heh).

Anyway, I'm just shocked someone paid $19k+ for the thing. It was *tired*.

 

[cfranck1]

There's an a** for every seat...

 

[Gunslinger-13]

I'm not sure why anyone would buy a car from a dealership in the first place?

Auto brokers are the way to go. None of those idiotic fake surcharges, none o the BS tat goes along with sales managers and the games they play and auto brokers bring them right to you to test drive.

You get them for considerably less through auto brokers. You tell them what you want, they go out and find it, and also a few others in the same class by other manufacturers and let you decide, no pressure, no having to be on the lot.

Stealerships suck.

 

[mckennar]

I'm not sure why anyone would buy a car from a dealership in the first place?

Auto brokers are the way to go. None of those idiotic fake surcharges, none o the BS tat goes along with sales managers and the games they play and auto brokers bring them right to you to test drive.

You get them for considerably less through auto brokers. You tell them what you want, they go out and find it, and also a few others in the same class by other manufacturers and let you decide, no pressure, no having to be on the lot.

Stealerships suck.

Have bought from brokers in the past when I lived in large metro areas. Can confirm the amount of ass pain is greatly reduced when doing so. I didn't really save all that much off of the overall cost of the vehicle compared to buying from a dealer, but it was easier to work with them.

 

[Gunslinger-13]

Have bought from brokers in the past when I lived in large metro areas. Can confirm the amount of ass pain is greatly reduced when doing so. I didn't really save all that much off of the overall cost of the vehicle compared to buying from a dealer, but it was easier to work with them.

Hmm, that's interesting to hear. I have bought many vehicles from dealerships and brokers and the brokers are typically 7-10% less than the dealer each time for a comparable vehicle/mileage.

That has been my experience.

I will admit however, the best deal I got on a vehicle purchase ever was at a dealership just after the housing bubble during a terrible economy.

I had cash and bought two vehicles at the same time from a dealership that hadn't sold a car in over 2 months. They were HUNGRY for a sale and I tasted the blood in the water.

I got a 2008 Subaru Tribecca B9 and a 2008 4runner SR5 both with approx 30,000 miles and in excellent shape- together they cost me a total of $38,500.00 out the door.

That type of situation doesn't happen often though.

 

[-JD-]

Could just as easily ask why would anyone ever "trade in" a car to the dealer.

Btw they try to get you talking about how much you owe so they can give you just barely more and you'll feel good. But how much you owe has no relation to the value of the vehicle. It is just another way that the dealer gains leverage over you.

Perhaps this is unique to Canada, but here you dont pay taxes on the value of your trade. Only the difference between trade and whatever you're trading for.
So at our 12% tax rate on say a $20,000 trade in you would have to get $2400 more from a private party to equal what you would save trading it in to the dealer.

Not impossible to do but its a lot more work finding a private seller willing to pay that much more for it. As you get into higher value vehicles it only becomes more difficult as that number gets bigger and often people looking to spend that kind of money need financing or like the perceived 'security' of buying from a dealer (warranty, service, etc).

 

[90goldtsiawd]

So we traded our worn out 2015 Mazda CX-5 (worn out after 30k of my treating it like a rental car and teaching the wife to drive stick on it) on our new 2016 Trail in early June.

When we bought the Mazda, it had been on the lot for 7 months because nobody buys stick shifts here anymore. We bought it, with 26 actual miles on the clock, for a shade under $19,000.

I feel we got a pretty good deal. It was a base sport 6 m/t with the all weather floor mats and cargo mat, cargo net, rear bumper protector, mud flaps, fog lights, Class III hitch (haha), and a roof rack.

So when we went to trade it in, I was afraid that it was just going to go straight to the auction lot because it took so long to sell initially. In fact, a large portion of the negotiation conducted revolved around what I thought was fair trade value for the thing, and what the dealer thought it was.

We settled on $15,200 which is more than we owed but less than I wanted (I'm greedy, but also lazy and hate selling used cars to people that aren't dealers). They needed to put a new windshield in and replace some wear items like brakes and tires which knocked the price down a bit.

So anyway, the dealer put it up for $21,500 on the front row of their pre-owned lot. The wife and I had a good chuckle and thought nobody could be that stupid to spend $21.5k on it... the Mazda dealer down the street had a bunch of NEW (and better equipped) 2016's listed for less than that with fewer than 100 miles on them.

It lasted all of a week before someone bought it. Wife and I are dumbfounded.

I talked to an employee of the dealer (our kids go to the same day care) and he said the final sale price was $19,250 with no trade in.

Why would anyone pay that much?

There's an ass for every seat. I'm car salesman btw. Nobody goes to work for free and you can ask as much as you want for anything. You can always go down but you can't go up in price. Gotta make a living.

 

[90goldtsiawd]

I'm not sure why anyone would buy a car from a dealership in the first place?

Auto brokers are the way to go. None of those idiotic fake surcharges, none o the BS tat goes along with sales managers and the games they play and auto brokers bring them right to you to test drive.

You get them for considerably less through auto brokers. You tell them what you want, they go out and find it, and also a few others in the same class by other manufacturers and let you decide, no pressure, no having to be on the lot.

Stealerships suck.

Lol auto brokers buy the car from the dealer for only maybe $2-300 less than a customer can generally pay(still not always true) then mark it back up higher than the dealer would sell it for. They're the biggest crooks in the game. They sell you people on the illusion that they're not crooks but dealers are and it's no hassle cuz you don't negotiate their "great" price.

 

[Gunslinger-13]

Lol auto brokers buy the car from the dealer for only maybe $2-300 less than a customer can generally pay(still not always true) then mark it back up higher than the dealer would sell it for. They're the biggest crooks in the game. They sell you people on the illusion that they're not crooks but dealers are and it's no hassle cuz you don't negotiate their "great" price.

I've negotiated every time with the brokers. And I have done my due diligence as to whom is less expensive.

With the one exception I noted above, I bought every vehicle for 7-10% less than what I could have at a dealership. I pitted them against each other and the brokers always made a better deal.

I worked at several car dealerships in my youth. I know the games.

 

[90goldtsiawd]

I've negotiated every time with the brokers. And I have done my due diligence as to whom is less expensive.

With the one exception I noted above, I bought every vehicle for 7-10% less than what I could have at a dealership. I pitted them against each other and the brokers always made a better deal.

I worked at several car dealerships in my youth. I know the games.

We sell to brokers so we know what they pay. It's no rocket science. If you're smart enough to know better you wouldn't deal with the middle man. All the info for invoices and incentives are online nowadays.

 

[Gunslinger-13]

We sell to brokers so we know what they pay. It's no rocket science.

I'm sure there are other dealers selling to them as well, I doubt you are privy to all of the dealings, correct?

I only know my personal experiences from both sides. Working at the dealership, buying from the dealership and buying from brokers.

Me paying 7-10% less for the equivalent vehicle isn't rocket science either.

If the dealers would have the better deals I'd buy from them, they haven't in my experience except for what I stated above.

 

[90goldtsiawd]

I'm sure there are other dealers selling to them as well, I doubt you are privy to all of the dealings, correct?

I only know my personal experiences from both sides. Working at the dealership, buying from the dealership and buying from brokers.

Me paying 7-10% less for the equivalent vehicle isn't rocket science either.

If the dealers would have the better deals I'd buy from them, they haven't in my experience except for what I stated above.

Shop dealers against each other it's the same thing. The brokers do this too. I'm 3rd generation in the business(dad for 45 years, uncle for 30+, 10 myself) and my grandfather owned a dealership back in the day so I think I have a pretty good idea of how things work. We all own the cars for the same amount, nobody owns the same metal for less. Did you set your own pricing and structure your own deals when you sold cars or just take orders?

 

[ben550]

I'm not sure why anyone would buy a car from a dealership in the first place?

Auto brokers are the way to go. None of those idiotic fake surcharges, none o the BS tat goes along with sales managers and the games they play and auto brokers bring them right to you to test drive.

You get them for considerably less through auto brokers. You tell them what you want, they go out and find it, and also a few others in the same class by other manufacturers and let you decide, no pressure, no having to be on the lot.

Stealerships suck.

What auto brokers did you use?

Shop dealers against each other it's the same thing. The brokers do this too. I'm 3rd generation in the business(dad for 45 years, uncle for 30+, 10 myself) and my grandfather owned a dealership back in the day so I think I have a pretty good idea of how things work. We all own the cars for the same amount, nobody owns the same metal for less. Did you set your own pricing and structure your own deals when you sold cars or just take orders?

Any suggestions for successful negotiating at dealerships? I usually look up car values for trade in then look at the vehicle asking prices... seems like there is a several thousand $ markup on price from the trade. Is it reasonable to negotiate off the "trade in value" of what the dealer paid for the car? Seems reasonable that the dealer would make a few thousand off the transaction, however it is over the top when they are making over 5k on a used car sale...

 

[mckennar]

Nobody goes to work for free and you can ask as much as you want for anything.

I know, I'm not shocked that they listed it that high; I'm shocked someone looked at the car and said "yeah, $19,250 is a reasonable price to pay for this thing."

 

[Gunslinger-13]

Shop dealers against each other it's the same thing. The brokers do this too. I'm 3rd generation in the business(dad for 45 years, uncle for 30+, 10 myself) and my grandfather owned a dealership back in the day so I think I have a pretty good idea of how things work. We all own the cars for the same amount, nobody owns the same metal for less. Did you set your own pricing and structure your own deals when you sold cars or just take orders?

I never actually sold cars. I just got an education from the sales guys I worked with. I didn't intend for it to sound as if I was selling them. I apologize if it came off that way. I just learned the ropes from them so I would be better prepared to buy vehicles myself and negotiate with knowledge.

Another thing I should have mentioned is I've never purchased a brand new vehicle, I always buy used.

I've used a broker several times and each time I got smoking deals each time. Better than what I could find at a dealer or from a private party. And I looked and shopped around for a long time until the deal was right.

I think a lot of people go into buying a car needing it very quickly and looking to finance, but that is not me. I save the cash for it and wait until the deal comes up. Timing is everything in my experience.

 

[Gunslinger-13]

What auto brokers did you use?



Any suggestions for successful negotiating at dealerships? I usually look up car values for trade in then look at the vehicle asking prices... seems like there is a several thousand $ markup on price from the trade. Is it reasonable to negotiate off the "trade in value" of what the dealer paid for the car? Seems reasonable that the dealer would make a few thousand off the transaction, however it is over the top when they are making over 5k on a used car sale...

I've used a few, but HM Brown is the one I liked working with the best and continue to use. I made friends with one of the brokers; we refer business to each other and he always takes real good care of me and my friends/family.

 

[90goldtsiawd]

I never actually sold cars. I just got an education from the sales guys I worked with. I didn't intend for it to sound as if I was selling them. I apologize if it came off that way. I just learned the ropes from them so I would be better prepared to buy vehicles myself and negotiate with knowledge.



Another thing I should have mentioned is I've never purchased a brand new vehicle, I always buy used.



I've used a broker several times and each time I got smoking deals each time. Better than what I could find at a dealer or from a private party. And I looked and shopped around for a long time until the deal was right.



I think a lot of people go into buying a car needing it very quickly and looking to finance, but that is not me. I save the cash for it and wait until the deal comes up. Timing is everything in my experience.

You didn't get a good education then.


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