Automotive

Expected dealer discounts on a used 2017 Hyundai Elantra GL models (CPO and non-CPO)? + other useful info

  • Last Updated:
  • Dec 23rd, 2018 11:05 am
[OP]
Newbie
Jan 9, 2009
5 posts
3 upvotes
Toronto

Expected dealer discounts on a used 2017 Hyundai Elantra GL models (CPO and non-CPO)? + other useful info

I am a die-hard RFD'er who has gained great wisdom over the years by reading through endless RFD forum postings - a big thank you to everyone.

Over the last few weeks I've gone all-out and done in-depth research into buying a used or new car: Toyota Yaris iA Sedan, Hyundai Accent Sedan, Mazda3, Toyota Corolla Sedan, Honda Civic Sedan, Kia Rio Sedan, Kia Forte and Hyundai Elentra GL. I have over 1200 lines of extensive technical notes written from the perspective of an engineer who can be overly critical when purchasing a car :-)

I've scoured the RFD automotive forum and have come up empty on the following questions. I am not asking these questions from a complete newbie standpoint. I'd be really interested in having an open discussion about this on the RFD so that others in the future may learn from my current experiences.

After all of my research I've settled on purchasing a used 2017 Hyundai Elantra GL (not GS) under 20,000km (a Toyota Yaris iA Sedan was my #1 pick but they are just impossible to find used in Ontario). I reviewed a hundred used car postings and those lead to my questions:

- Almost everyone lists them for $16995 under 20,000km or thereabouts (and many or all are off-lease and daily rental cars, some uncertified). The least costly asking prices are $15995. The Black Book trade-in value is $12770 to $14320, avg trade-in $13545 (with suggested resell at $15495). A brand new 2017 based on MSRP and not CarCostCanada dealer invoice cost is $18 783:

$20 349 base price
- $3000 discount
- $411 dealer discount
+ $1845 fees (freight & government)
Total before tax = $18783

The RFD "rule" is $2000 profit on every $10k in asking price (from a used car CPO dealer) and that ~10% off asking price of a CPO used car is generally deemed to be pretty good.

I've vetted a few of these dealers and they don't want to budge off of $16500 to $16995 right now. So the question to those "in the know", what is a logical discount to be applied to these asking prices for such a car? I'm thinking that an acceptable used car price would be $15k to $15.2k + HST? Of course it doesn't seem to make much sense paying close to asking price when a brand new, off the lot, 2017 Eleantra GL can be had for $18.7k (or even a tad bit lower) before taxes.

- Certified-pre-owned (CPO) 2017 Elantra GL's from Hyundai dealership seemingly are priced around $17.8k to $18.5k for 24,000km to 30,000km. As someone else has rightfully noted on the forum, these resale prices are almost the same as buying a new 2017 model from a dealer. My question: what is a realistic expectation of the final amount they would be willing to discount from asking? Other RDF'ers have mentioned 20% margin on CPO models with a goal to get the car at 5-7% off.

- I have seen a pattern. Most of these used 2017 Elantras are either off-lease or rentals. There are few "first owner" used cars for sale. That would all make sense given that this is a 2017 car. My question: what's the TRUE reality of these cars? By off-lease are they one-owner driven or often used in fleet or daily rental situations? "Off-lease" sounds fine to me who has leased before but I am wondering how much these used cars may have been driven into the ground? Is this a "buyer beware" situation with these mass off-loaded vehicles with 20,000km or less?

- Some dealers (like Kia) mention that they get an allotment of off-lease cars from Hyundai Canada. I've seen this mentioned in many used car listings as well. What is the deal here? Who and/or how were Hyundai Canada leasing these cars out to (ie. the general public or fleet sales)? And why are they dumping them on other non-Hyundai car dealerships (what is the major upside for Hyundai that they could not benefit from directly by selling the cars through their own dealer network)?

- Beyond the "150 point inspection" and added peace of mind, is there any major upside to getting a CPO vehicle at a higher premium? I will be taking the car to get my own inspection and hence any major faults may be found before buying the car outright.

Thanks to all who has read through my questions and to all those who have posted great information to the Automotive forum over the last decade.
2 replies
Newbie
Mar 29, 2016
31 posts
5 upvotes
very extensive research based study you did. Great. I was also looking for elantra 2017. It seems within 30 k kilometres price ranges 13k to 14.5k possible. What's your findings. I wish to buy from dealer and in cash or credit card also. Thanks
[OP]
Newbie
Jan 9, 2009
5 posts
3 upvotes
Toronto
I had phoned or contacted a good number of dealerships in the GTA and Hamilton since last posting my message. Some additional comments:

1) Make sure that anyone you buy from is registered as an OMVIC dealer so that they have to abide by these code of ethics:

https://www.omvic.on.ca/portal/Consumer ... sures.aspx

2) Almost all used car dealers seemingly buy their allotment of cars from auction or a larger car manufacturer (the latter from their off-lease inventory, such as done often by Hyundai Canada and their plethora of off-lease Elanatras which soak the market). For a 2017 Elantra, given that they are so new, first-time and private owners are most likely not going to be trading in their recently purchased cars. As such, dealers need stock and inventory for their car lots so they buy in larger batches. What I've seen is that these cars are from auction, off-lease, ex-rentals, salvaged, repossessed and some are trade-ins.

3) If a dealer says "I don't know of the history" of the vehicle, press them on the topic as they should really know of it.

4) Dealers can make $4k to $5k profit on a used car $16995 list price.

5) Every dealer I approached said "We sell at asking price. We are a no haggle company". But these people are all asking 2x over a valid mark-up. For example, a dealership (Hyundai) might sell a used 2017 Elantra in the $18500 range, a shop like AutoPark or KIA may sell it for $16995 or $16500 and a corner-lot used car salesman for $15995 -- these are for cars under 25,000 to 30,000km. These cars are being purchased wholesale in the $12k to $13.5k price range. And, many of these people said "We have not done any reconditioning on the car or any mechanical work. We will consider doing some reconditioning work on the interior after you make the purchase".

6) As a loose rule, dealers don't make a ton of profit on new car sales ($1500 to $2500 or more?) whereas they make a ton of money on used car sales. That explains why sales agents were quick to ask "What car do you have to trade in?" anytime I went looking for a new car. That can be upwards of 60% profit on a used car sale.

7) New car dealerships have an ample supply of used cars to pull from. For example, KIA can pull a used 2017 Elantra, off-lease from Hyundai Canada, at a moment's notice and upon request even if they have nothing in their inventory.

8) Be careful with low mileage, used cars. They all look really good in AutoTrader.ca but you need to find out their history. A car in the 3000km to 5000km range tends to be a demo model, an executive's demo car or a dealer's "courtesy loaner" car. Those under 10,000km often can be daily rental cars offered by dealerships.

9) Above all, as my general finding, 2017 or 2018 used cars are either going to be off-lease, ex-rental units or demo models.

10) Make sure you take the car to a vehicle inspection company before the deal goes through -- conditional upon inspection.

11) I can concur with some other RFD'ers that the best approach is to make a list of car dealerships in the GTA and call of the up personally. Explain to them what you are looking for, what price point (on-the-road) you desire and also that you know "of their game + base and mark-up pricing". Be open and considerate of their time and interest in your discussion. Out of all your chats you will most likely come across someone willing to sell you a brand new car at a cost closer to used car pricing.

I hope this cursory information helps future RFD'ers looking to buy a used car.

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