Automotive

Why would used car lots rather keep the car for 3-6 months rather than sell it?

  • Last Updated:
  • Jul 1st, 2013 1:54 pm
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Newbie
Jun 21, 2009
90 posts
15 upvotes
Also remember just because you think they bought it at a price point does not mean that is what they paid for it, A friend has worked as a used car salesmen for almost 10 years keeps reminding me yes some car on the lot sell for a few thousand more then what they pay however there are a few out their that they just cant budge on...

For example I am in the market for a new Ford Mustang, I have looked at both used and new... there is a 2011 Mustang GT that I have been eying with 31,000KM on it selling for 28,900 they will not drop the price at all because that is what they paid for it. (I have seen the purchase slip for it)

Anyways they mite not be willing to go under 17K because they paid 16K for it, Plus Safety, Etest, new tires (In most cases) and any work that needed to be done on it.
[OP]
Banned
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Nov 10, 2012
777 posts
81 upvotes
Hamilton
Brian99 wrote:
Jun 17th, 2013 5:49 pm
Asking price was fair, but if you prefer, keep looking

http://wwwb.autotrader.ca/a/Honda/Accor ... po=ShowCPO

http://wwwb.autotrader.ca/a/Honda/Accor ... po=ShowCPO
He was looking at a coupe. On an apples to apples comparison price is at least 2k + (for EXL, no V6) compared to similar quality/value sedans

Second link, yeah, very similar to that one.
fredf wrote:
Jun 17th, 2013 5:52 pm
OP: I know what you think about used car lots from the tenor of your post. And, I'm not disagreeing with you.
But I have to think that they are business people like any other. They are there to turn a profit. If they think they can get more money than it costs them to have the car continue to sit on the lot then that's what they will do.

As others have suggested, the logic works both ways. If your friend thinks the car is so good, he can pay a few hundred dollars more for it.

It's a game and it takes two to play.

I'm sure the lot has some business sense. So why get yourself all out of joint if they think the car will fetch more than it costs to keep? You think you know more about buying and selling used cars than they do?

I can understand your unwillingness to pay more than a certain amount. But you feel that there is something morally wrong with their refusing to lower the price for you. Interesting.
But its bad business sense in the end. You have to lower the price because the car is depreciating in value. You also need to lower the price to appeal to potential buyers. It would make more sense to sell at a less than expected profit to guarantee and lock in a price. The same applies when you're investing money - you can keep holding your positions but when's the point where you sell?
Mulder and Scully wrote:
Jun 17th, 2013 5:57 pm
What I got out of the OP's post was that he's angry that a dealer wouldn't sell him a car for the price he wanted. Stop acting like a crybaby, you crybaby!

Conversely, I'm sure the dealer is probably complaining about you and how your "friend" wouldn't increase his offer by $350. Just like how the dealer doesn't have a sale, your friend doesn't have a car and has to waste time looking at other lots. The extra time wasted is probably equal to that $350, so in the end nobody wins.
You can be the sucker and pay sticker price - he won't. Neither will anyone else that goes to that lot will. Its been sitting for 5 months. Get real.
Jebus05 wrote:
Jun 17th, 2013 6:30 pm
Also remember just because you think they bought it at a price point does not mean that is what they paid for it, A friend has worked as a used car salesmen for almost 10 years keeps reminding me yes some car on the lot sell for a few thousand more then what they pay however there are a few out their that they just cant budge on...

For example I am in the market for a new Ford Mustang, I have looked at both used and new... there is a 2011 Mustang GT that I have been eying with 31,000KM on it selling for 28,900 they will not drop the price at all because that is what they paid for it. (I have seen the purchase slip for it)

Anyways they mite not be willing to go under 17K because they paid 16K for it, Plus Safety, Etest, new tires (In most cases) and any work that needed to be done on it.
That was a bad move on that dealer's part, because with competition of everyone else, they're gonna have to appeal to buyers one way or another.
Deal Addict
May 2, 2007
3015 posts
266 upvotes
Kingston
This is like selling anything.

I listed up a $600 motorcycle helmet for $450. $150 off retail and still cheaper than ebay. People came back and made offers of $300 and less and 'cash today bro' line was used a lot. I'm in no rush to sell nor willing to take less than $450 ish depending on my mood at the time.

People think when your selling something your desperate and need cash. However for me I just wanted a different helmet. Then they get all prissy like the OP (since his friend yeah right) didn't take the OP I mean OP friend low ball offer.

Chris
Deal Addict
Nov 13, 2012
1464 posts
67 upvotes
Edmonton
Maybe they are in it for 17k, how do you know? Maybe something broke and they had to fix it. Thus they need to get their money back. Honda Accords will always sell. They know that. Plus if they needed the money they could easily just send it to auction.
Deal Addict
Nov 27, 2003
1882 posts
165 upvotes
With interest rates so low, carrying costs on vehicle inventory is pretty low.

One other reason that our gov'ts ridiculous insistence on manipulating interest rates causes inflation.
Deal Addict
User avatar
Aug 3, 2006
4171 posts
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Jim321 wrote:
Jun 17th, 2013 6:53 pm
That was a bad move on that dealer's part, because with competition of everyone else, they're gonna have to appeal to buyers one way or another.
It wasn't necessarily a bad move. You don't know what this dealer paid for the car. You're making assumptions here. And on the dealer's side, he probably sees you as a lowballer wasting his time.

If you see yourself as being allowed to strike the best deal for yourself, then how come the dealer isn't allowed to strike the best deal for himself?

The dealer will have to appeal to buyers, but that buyer doesn't have to be you.

You're losing out because now you don't have a car. Don't assume that the dealer is the loser. You're both losers here.

You seriously seem to have a sour attitude about this. The difference was $350. Now $350 on its own is a lot, but looking at the big picture you were arguing over 2% of the cost. How many hours have you spent complaining about this? Now add on the time you also have to spend looking at ads again, going to other dealers and negotiating with them. Is all this worth your $350?
Deal Addict
Nov 13, 2012
1464 posts
67 upvotes
Edmonton
Mulder and Scully wrote:
Jun 17th, 2013 11:03 pm
It wasn't necessarily a bad move. You don't know what this dealer paid for the car. You're making assumptions here. And on the dealer's side, he probably sees you as a lowballer wasting his time.

If you see yourself as being allowed to strike the best deal for yourself, then how come the dealer isn't allowed to strike the best deal for himself?

The dealer will have to appeal to buyers, but that buyer doesn't have to be you.

You're losing out because now you don't have a car. Don't assume that the dealer is the loser. You're both losers here.

You seriously seem to have a sour attitude about this. The difference was $350. Now $350 on its own is a lot, but looking at the big picture you were arguing over 2% of the cost. How many hours have you spent complaining about this? Now add on the time you also have to spend looking at ads again, going to other dealers and negotiating with them. Is all this worth your $350?
+1

OP if $350 isn't a lot then why didn't your friend just ad $350 to make it a deal?
Sr. Member
Jul 13, 2009
923 posts
58 upvotes
newlyborn wrote:
Jun 17th, 2013 4:42 pm
Since it is all a guess game , may be this car costed dealer higher for any unknown reasons and don't want to let it go for a loss !
Sunk cost fallacy - what a dealer paid should have no bearing on selling it, they should try to sell it at the highest price possible regardless of what they paid.
Deal Fanatic
Jun 24, 2006
7326 posts
1970 upvotes
Does it really matter? Accords are a dime a dozen. Your friend can just go find another one somewhere else that is in his price range.
[OP]
Banned
User avatar
Nov 10, 2012
777 posts
81 upvotes
Hamilton
This does beg the bigger question, why, after 5 months, they are not in a rush to sell it, DESPITE the fact that it is depreciating, and clearly no one is interested in it (so far).
Penalty Box
Apr 15, 2011
3797 posts
529 upvotes
Scarborough
try getting a stick shift...dealers are much more flexible :D
Deal Guru
User avatar
Mar 8, 2002
11708 posts
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GTA
Jim321 wrote:
Jun 18th, 2013 9:37 pm
This does beg the bigger question, why, after 5 months, they are not in a rush to sell it, DESPITE the fact that it is depreciating, and clearly no one is interested in it (so far).
I totally agree with you on this one, from a purely business sense, move more units, whether you make $200 or $5000 on each.

But as said before, it sounds unusual that a used car place would only knock $250 off the sticker price, so maybe there is a reason behind why they're being firm.
_______________

( ͡° ͜ʖ ͡°)
Deal Addict
Nov 13, 2012
1464 posts
67 upvotes
Edmonton
Jim321 wrote:
Jun 18th, 2013 9:37 pm
This does beg the bigger question, why, after 5 months, they are not in a rush to sell it, DESPITE the fact that it is depreciating, and clearly no one is interested in it (so far).
Why didn't your friend just ad $350. You are making this into a bigger deal then it really is.
[OP]
Banned
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Nov 10, 2012
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Hamilton
CalgaryExotics wrote:
Jun 19th, 2013 1:07 am
Why didn't your friend just ad $350. You are making this into a bigger deal then it really is.
Because 1. He doesn't NEED a car, he has a fully functional old one.
2. (along with myself) thinks it's stupid he can't get 5% off the price bare minimum
3. Car is lease return - cannot guarantee the quality or care that was taken by the original owner (Hell, if I was leasing, I would trash the suspension and tires and brakes etc - why would I care? It's not mine in the end anyways)

They were selling the car at 18250 not too long ago and now lowered it to 17500 or something like that. Maybe that's why they're reluctant to reduce? But still, you have to get rid of this inventory that noone is interested in.

Is no one understanding that these people have held the car for 5 months!!! Nobody wants it! Clearly there's a problem there. If I was buying and selling product, by no means would I hold product for 5 months to get a price i want. I would either take a loss if I absolutely had to or break even. By all means, I would get rid of this car.

That was definitely the best offer that they ever got for the car.
Deal Fanatic
Jun 17, 2013
5120 posts
1493 upvotes
Montreal
Jim321 wrote:
Jun 17th, 2013 6:53 pm
But its bad business sense in the end. You have to lower the price because the car is depreciating in value. You also need to lower the price to appeal to potential buyers. It would make more sense to sell at a less than expected profit to guarantee and lock in a price. The same applies when you're investing money - you can keep holding your positions but when's the point where you sell?

Think of this

You have a car listed at say $10,000.

Someone low balls to $9,000 and the dealer says no. If you are going that low and not budging, no way they will get add ons.

They risk it, they keep it on the lot. They put it down to $9,500. Someone buys it no fuss because they say it dropped by $500 which to them, is a good deal.

The dealer adds on a couple things and bang they are up to $10,000.

This of course is hypothetical but the dealer has the power. They know what they can and cannot do. They are EXPERIENCED in selling vehicles.

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