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2013 Car Purchase - Astounding Profit Margins

Discussion in 'Off Topic Threads' started by DCmodel12, Jan 9, 2017.

  1. DCmodel12

    DCmodel12 Active Member

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    I sure wish others knew of situations like this but they probably don't and maybe even don't care much since everyone I've ever talked to always says they "got a good deal" when they bought their car. I don't see this as "atypical" as I've seen this on most every trade I've ever done - if I was able to get a friend in to get a price on my trade. I'm a "haggler" and will continue to do so.

    I'm not proud of this deal at all but I've been asked to buy my cars elsewhere by several dealers when trying to negotiate with them. Honestly, I'd guess that for every buyer going into a dealership like me - there are maybe a hundred buyers just buying on allowable monthly payments or not haggling at all. Certainly I'm at a disadvantage with my approach. I don't begrudge a dealer a profit but the below, in my opinion and likely yours, is way out-of-line on a single vehicle purchase. I sometimes drive by a local dealers beautiful home, surrounded by acres of land and composite fencing, and laugh to myself.

    Year of trade = 2013
    Trade = 2009 Camry Gold Package (mileage just over 32,000)
    Trade for = New 2013 Subaru Outback (MSRP with options $25,996)
    Estimated cost of Subaru Outback to dealer = 83% of MSRP ($21,577)
    Camry Dealer Trade in Amount (in the door) = $7,800
    Camry Dealer Trade in Amount (after much haggling) = $10,639 (buyer gain of $2839 from in the door $7,800)
    My "Estimate" of Camry worth on open market = $14,500
    Dealer Cost of Camry, later on their Lot and sold = $14,895
    Estimated Dealer Profit on Total Deal = ($14,895 - $10,639) + ($25,996 - $21,577) = $4,256 + $4,419 = $8,675

    PS: At closing, the sales department told me the vehicle had a luggage cover in the back to cover your valuables and I needed to pay another $125 for it. I stood telling them the deal was off and the price went to $0.
     
  2. smokintom

    smokintom Well-Known Member

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    That's Awesome. I guess
     
  3. jroccasano

    jroccasano Member

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    Most people don't feel comfortable negotiating hard. I worked with an older gentleman years ago, who told me "If you don't ask, you don't get. He negotiated every purchase, even his dry cleaning. If you are willing to put in the time it can be done. You have to be willing to stick to your guns and most importantly, to walk away.
     
  4. o-hale

    o-hale Well-Known Member

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    Not many name brand car delalers fail, they, like all businesses are there to make a profit.
    I do agree with you that if they do not want to deal there are other dealers that will.
    I usually have a hard time the 2nd time I try to buy from a dealer where I have purchased before.
     
  5. amboy49

    amboy49 Well-Known Member

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    I have friend who I shoot with who is a used car salesman. (Yeah, I still like him - up to a point !). We were discussing folks negotiating car purchases. He chuckled when I asserted I felt I was a pretty good "negotiator." He said anyone who thinks they can out negotiate the dealer is pretty naive. He said "we do this day in and day out !"

    With that said, I would bet that a huge majority of car buyers aren't even concerned about the price of the car. That's underscored by salesman who ask early on in the discussion about "how much of a monthly payment can you afford ?" I imagine many folks, especially younger ones, don't ever intend to pay off a car loan. Many are now leasing and only look at the monthly payment when considering whether get a new(er) vehicle.
     
  6. Catpower

    Catpower Molon Labe

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    I haggle with most anything sizable, and have done okay, but if buying something from someone just selling an item I have found that Big Ben's are the best haggling point there is, I will take what I want to pay in $100 bills and haggle and when they say they won't go any lower, pullout the bills and fan them, it works 95% of the time
     
  7. grntitan

    grntitan Well-Known Member

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    A lot of buyers will do the "threaten to leave" bit, but never actually leave. I will not only threaten, I have left on several occasions. I always make sure they have my contact info, just in case.
    I got my best deal ever on my wife's current car after leaving because we were still too far apart. A day later the sales associate called me and said they would take my offer. I try to buy in the winter time. Times get tough that time of year and a sale is a sale.
     
  8. RickN

    RickN Banned User Banned

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    The sales guys are the pros but if I could add up the difference in what they said was their best price to what I actually paid on all the cars I've bought in my lifetime, it would amount to several cars.
    And I'm by no means the best haggler.
     
  9. Gussers

    Gussers Well-Known Member

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    I never need a car so bad that I won't walk away. I have several times, but most times I don't get all the way to my car before they call me back inside. I did have a friend drive me 2.5 hours to go look at an Explorer last year. I wanted the vehicle and didn't want to make 2 trips so I planned ahead. It wasn't near as nice as it had been portrayed. I still would have bought it though. I made my offer and he laughed. He replied, "you didn't drive down here 2.5 hours to not buy this car" I said " I didn't drive down here 2.5 hours to get screwed." I walked out, got in my friends car and we ventured home. I found a nicer one 5 minutes from the house about a month later.
     
  10. dirt stirrer

    dirt stirrer Well-Known Member

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    The populace works on monthly payments. amboy is right, most don't even care about the price of a car.

    We were in buying our first minivan back in the early 80's at a dealer in OKC. Shrewd dude, came at us with the "if I don't sell something soon, I can't feed my kids" crap. Kept going to "talk the the manager" about getting the price down, and he would only come back with a lower monthly payment. ounf out they were just adding months to the note. Finally got him on the price wavelength, and we haggled until we unloaded our car trunk and was nearly ready to drive it out. It was down to the last $50. He told us he couldn't believe we would let a car go over $50. Just told him I couldn't believe you would let us walk outta there over $50. He sold us the car at our price.
     
  11. SD Trap Family

    SD Trap Family TS Supporters TS Supporters

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    End of month/end of quarter is always a good time to "chat" with the salespeople. Needing to hit numbers. Like Grntitan said, Winter can be a good time to talk to dealers.

    Over the last 15 years I have always got multiple dealerships (minimum of 3) involved to see who wants the sale the most.
    8 months ago was on a Ford F350. Trade in's for the a 2007 Dodge diesel ranged from $8,000 to $20,000. That is a wide variance.

    Not being in a hurry certainly works to your advantage but most want it now. After we get close I will let all the dealerships know the date that I will make my decision. Again, end of month/end of quarter as they get very hungry to close the sale. Amazing how many calls I get to get the deal done and what the offers are.

    Always fun to negotiate. Just watch Pawn Stars on TV to see how people come down quickly and do not want to walk.

    Bud
     
  12. DuckNut

    DuckNut Well-Known Member

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    I never question or haggle on lower priced items as I know there is not much wiggle room.

    On large purchases I live by one rule: if I am not embarrassed by my first offer then I bid too much.

    Example: in June of 2010 I wanted to buy another piece of property. Found a house and I told my wife what I was willing to pay. She would not join me in making the offer. Had a meeting with the realtor and told her I would pay $269k. She told me "do you realize the asking price is $710k?". I told her I did and reminder her that she now has a legal obligation to present the offer and I told her I want it in writing along with the sellers response. The next morning I received an email from the realtor - they accepted it.

    I am still disappointed because I feel I offered too much because they really didn't think about it and did not even counter.
     
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  13. ShotStop

    ShotStop Dedicatedto keeping gun clubs open and shooting.

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    So, you sold your $14,895 Camry to the dealer for $4,256 less ($10,639)and somehow you think you made a good deal?

    Further, you didn't tell us what you paid for the Camry that was only 4 years old that you put all of 8,000 miles per year on. What was wrong with it that you had to dump it at such a huge loss?

    What am I missing here?
     
  14. Stl Flyn

    Stl Flyn Banned User Banned

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    I am confused. You upped the trade in value to $10,639 from $7800.00, but paid the MSRP of $25,596 for the Subaru. I think that is what they do to make you think you are doing well. I would have tried to get that trade-in value, and paid $21577 for the Subaru. Then after they agreed to that I would have said I thought some more, and wanted $11,000 for the trade-in. More than likely I would have been walking out the door well before that though.

    As for the luggage cover, I would have told them to deduct that $125 from the total, as I did not need it.
     
    David Weeks thanked this.
  15. reddbudd

    reddbudd Well-Known Member

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    I was looking to buy a 4 wheel drive truck. I found one I liked. The salesman said they would knock off $22oo on a clean deal with no trade in. I agreed and he said all he had to do
    was confirm it with his manager. We walked across the street to the main building and after about 20 minutes came back and said his manager said the most they could discount
    the truck was $800. I said no thanks. He said wait and went back across the street. The next offer was a $1200 discount and again I said no thanks. This went on a couple of more
    times until he said if I would go $100 higher a could buy the truck. I asked that another $100 would buy the truck and he said yes. I said in that case go back across the street and tell them
    a $100 means a hell of a lot more to a working man than to someone who owns a car dealership. He went across the street and came back and said you bought yourself a truck.
     
  16. DCmodel12

    DCmodel12 Active Member

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    I think if you read my OP, in no way am I saying I made a good deal - quite the contrary, it's the worst I've ever settled for and completely my fault. My only reason for posting it was to alert others to look deeper into their deals. What I paid for my Camry or what was wrong with it isn't at all part of my intent in sharing the data. If one searches for like vehicles, with like mileage, and what they're going for on the open market (before dealing) you could at least be armed with that info going in. What the dealer actually pays for the car (percentage of MSRP) is important too but hard to come by. Years past, in Consumer reports, they used to publish that information - in detail too, if you wanted to pay them a fee. I simply estimated the 83% from past experience but it's likely close to that, give or take a few percent. In no way do I claim a good deal - my intent was to simply plant caution in any readers mind so they're properly armed from the outset.
     
  17. ShotStop

    ShotStop Dedicatedto keeping gun clubs open and shooting.

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    OK, it just kinda sounded like you thought you had negotiated a good deal. That's the part I missed.
     
  18. CactusJW

    CactusJW Well-Known Member

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    I told one dealer if he went to the back" room" one more time I would be gone when he came back. he didn't go and I bought the car.
    jack mc
     
  19. 320090T

    320090T Well-Known Member

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    Some stories you just shouldn't tell.....
     
  20. Catpower

    Catpower Molon Labe

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    A while back i was looking for a pickup for my wife, the place I had done bidness with was about 150 miles away since we had moved, but they had a truck like she wanted so we looked around the metromess and were at a deal talking to a female sales person and I told her what she wanted, so she typed it in the puter, she said there is only one like the one she wanted and it was in Houston. I told her no there was one in Weatherford, she snidely said well why didn't you buy it? I took out my phone as I had the other salesman's number on it, I hit redial and said Hey Denny get that truck ready we will be there in a couple hours, and I want all the paper work done, no extended warranty, just the truck

    Her jaw dropped open and she got bug eyed, and was almost trying to stop us from leaving, saying she could make a better deal, we have the best service blah blah blah