School Me on Buying Used at Dealer

[MisterB]

I am toying with idea of getting rid of my 2004 Lexus suv GX470 (74k) for a 2006 750i (44k)
The BMw is at a SAAB dealer, priced at 29,000

So Edmunds for GX 470 Trade- 17,000 PrivParty- 18,900 Dealer-20,630

750i Trade- 22,300 Priv Party 26,046 Dealer 29.000

So how do not sell low and buy high..... I have no patience when i am at the dealer and not good at negotiating....

[kaisen]

Is it the 750i or the longer 750Li?

Edit: found it online

[Zeke]

Private sellers have gotten to be such a PITA that it's becoming more easy to just go to a dealer and know that the paperwork is going to be a breeze whether you are financing at your source or need a smog, ect.

I have gone through 2 sellers of Jags that won't even show me the car. This is CL stuff. They lie about everything and when I ask about a few things, they clam up.

[avi8torny]

Keep them on the same playing field and use the difference for your bottom line.

KBB trade in value
BMW - 26,300
Lexus - 20,800

difference of 5500.....that's the number I would shoot for.

[MisterB]

Wow so simple... thanks....I will see where it gets me

[masraum]

You need to talk to kaisen. He's a broker and has helped several people get good deals on cars.

[Brando]

Also a good idea when buying pre-owned at a dealer to have the cash/financing ready so you can just walk in, write a check and drive out. Know the value of the car. Don't feel bad to make a straight "out the door" offer at market value. Make sure they know that "out the door" offer includes all their fees and whatnot they tack on 'at the end'. They say no tell them "here's my number, call me if you change your mind". There are plenty of dealers out there that will say yes.

[McLovin]

lol, he was all over it within 5 minutes. amazing.

[dennis in se pa]

Never take their first offer. And make them be the first to mention a number. Don't be afraid to lowball a starting point. Use edmunds.com not KBB.com for true value info. Always walk away from the first deal.

[Laneco]

If at all humanly possible, sell your trade yourself. Bringing cash to the deal, no trade-in, generally will get you the lowest REAL price on the newer vehicle. When a trade is involved, the idea for the dealer, as you've already surmised, is to buy the trade cheap and sell the other car high.

Bringing no trade to the deal eliminates that bargaining chip for them. If you must do a trade, as advised above, concentrate on just the difference between the two vehicles.

angela

[nostatic]

Originally Posted by avi8torny

Keep them on the same playing field and use the difference for your bottom line.

KBB trade in value
BMW - 26,300
Lexus - 20,800

difference of 5500.....that's the number I would shoot for.

I'll bet it'll never happen. They will offer wholesale for his car, and want to sell theirs at retail. That will be their starting point. Using the numbers given:

So Edmunds for GX 470 Trade- 17,000 PrivParty- 18,900 Dealer-20,630

750i Trade- 22,300 Priv Party 26,046 Dealer 29.000

The dealer will be looking for $12K to do the deal. I doubt they would drop below $8K

[Steve Carlton]

Check what kbb.com says about the cars as well, although both of them are somewhat irrelevant. What's going to matter is what the dealer will do. He'll likely look at what the auction stats are for the car you want to trade in and what he's in his BMW for and how long he's had it. Consider what cosmetic damage and mechanical needs the car has, especially brakes, rotors, and tires.

If you want to trade in your Lexus, this is what I'd suggest- call 3-5 Lexus dealers, ask for the name of the used car manager, then ask to speak to him. Otherwise, you'll likely wind up talking to a salesman. Don't get talked into bringing the car in- it's not necessary for a number based on described condition. See what he and a few other Lexus used car managers will buy your car for outright. Work the deal on the BMW before disclosing the Lexus trade-in. Then see what they'll give you. You might as well ask for more than you've been offered by the Lexus dealers.

[kaisen]

Originally Posted by McLovin

lol, he was all over it within 5 minutes. amazing.

I'm always happy to amaze you. Thanks.

Expanding on what Steve Carlton said, the auction data on a 2006 BMW 750i with 44K miles suggests they've gone for $24-26K. It makes sense that they are asking $29K. The same data source on a 2004 GX470 with 74K is $17,200-19,000. In both vehicles there are recent sales for much more than that, proving that exceptional cars will break the bank.

So let's say $25K for the 750, and $18K for the GX. $7K is the auction delta. But they've already made investments in the BMW to make it ready for resale, where your GX still needs to be sorted. So make it $8K wholesale to wholesale. They'll want to make $1500, minimum, so that puts a logical trade difference at $9000-9500. Nostatic is right, I don't think they'll go under $8K.

Wait a couple months and you'll see dealers avoiding large, prior generation, V8 SUVs like the plague.

[Rick Lee]

Originally Posted by kaisen

Wait a couple months and you'll see dealers avoiding from large, prior generation, V8 SUVs like the plague.

You got that right.

[kaisen]

Additionally, it appears from the CarFax data that the car was originally traded in to the Mercedes dealer in late December, offered for sale there and they had it 30 days and couldn't sell it. They transferred it to their Saab dealer (same dealer group) to give it a fresh re-start on the books. It's now been at the Saab dealer almost 30 days.

[jyl]

Use kaisen, that's what I'd do, have a guy who lives and breathes this stuff on your side.

[onewhippedpuppy]

Originally Posted by milt

Private sellers have gotten to be such a PITA that it's becoming more easy to just go to a dealer and know that the paperwork is going to be a breeze whether you are financing at your source or need a smog, ect.

I have gone through 2 sellers of Jags that won't even show me the car. This is CL stuff. They lie about everything and when I ask about a few things, they clam up.

Wow, your dealers in SoCal must be much better than those in the midwest. I'll do anything I can to avoid the lying scumbags that sell overpriced used cars at a dealership. I've very rarely been disappointed buying cars from individuals, and I have a chance to talk to the actual owner about maintenance, repairs, etc. I also have a good shot at getting some sort of service records, which is damn near impossible with a dealer. If you apply a little common sense when dealing with individuals you can nearly always rule out the crap before wasting time to look at it, they're not professional liars like a used car salesman.

Originally Posted by Laneco

If at all humanly possible, sell your trade yourself. Bringing cash to the deal, no trade-in, generally will get you the lowest REAL price on the newer vehicle. When a trade is involved, the idea for the dealer, as you've already surmised, is to buy the trade cheap and sell the other car high.

Bringing no trade to the deal eliminates that bargaining chip for them. If you must do a trade, as advised above, concentrate on just the difference between the two vehicles.

angela

This. You'll always lose money when you trade in your car, that's the nature of the beast.

[Christien]

Here in Ontario, a trade makes a huge difference because you only only pay sales tax (13%) on the difference. So 20k sale price less 10k trade = 1300 in tax, a savings of 1300 vs selling the trade privately and buying at full price.

If at all humanly possible, sell your trade yourself. Bringing cash to the deal, no trade-in, generally will get you the lowest REAL price on the newer vehicle. When a trade is involved, the idea for the dealer, as you've already surmised, is to buy the trade cheap and sell the other car high.



Bringing no trade to the deal eliminates that bargaining chip for them. If you must do a trade, as advised above, concentrate on just the difference between the two vehicles.



angela

[Rick Lee]

Originally Posted by Christien

Here in Ontario, a trade makes a huge difference because you only only pay sales tax (13%) on the difference. So 20k sale price less 10k trade = 1300 in tax, a savings of 1300 vs selling the trade privately and buying at full price.

Ditto in AZ. But there is zero sales tax on private party sales. That saved me $1000 on my last motorcycle. You would think that would force dealers to be at least 8.75% more competitive on used vehicles, but I don't think that's the case here. When my wife gets her next car, it will probably be a barely used one we find private party.

[kaisen]

Originally Posted by onewhippedpuppy

Quote:
Originally Posted by Laneco
If at all humanly possible, sell your trade yourself. Bringing cash to the deal, no trade-in, generally will get you the lowest REAL price on the newer vehicle. When a trade is involved, the idea for the dealer, as you've already surmised, is to buy the trade cheap and sell the other car high.

Bringing no trade to the deal eliminates that bargaining chip for them. If you must do a trade, as advised above, concentrate on just the difference between the two vehicles.

angela

This. You'll always lose money when you trade in your car, that's the nature of the beast.

Careful, 'always' and 'never' makes for dangerous advice. Many states calculate sales tax on the trade difference. In those states, if he buys the BMW for $29K and gets $20K for his GX, he will pay sales tax on the $9K difference. Ohio is weird, as they differentiate between new and used vehicles (most states don't). So if he bought a NEW vehicle, he would get sales tax credit on his trade. But buying a used vehicle, he won't get any credit.

IF he bought a NEW car of some kind, the $18K he might get for the GX on trade would really be worth $18K x 1.0775 (Cleveland = Cuyahoga county 7.75% sales tax) meaning he'd effectively have to sell his trade on his own for more than $19,335 to break even.

In the case of the used 750i, you'd *think* he'd be better off selling the GX on his own. But how many people have $20K cash laying around, or have access to finance $20K on a 7 year old, 74K mile SUV? Most banks will want to offer a 36-42 month term, making payments as expensive as leasing a new one. It's different story when selling a $5000 Camry on Craigslist. Some people don't like the hassle of having strangers come out to their home, or meeting alone in a parking lot. Is their cash real? Is their cashier's check real? How will I know if they go register the vehicle, or will they leave it in my name and go rack up tickets? Etc, etc. There is a value in avoiding the headache..... but it's not thousands.

It's worth trying to sell the GX for $19950 for a week (eBay and Craigslist), unless you were worried about 'losing' the 750i.