Automotive

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

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  • Jul 1st, 2013 1:54 pm
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Deal Fanatic
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Aug 3, 2006
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Jim321 wrote: 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
1468 posts
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Edmonton
Mulder and Scully wrote: 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
932 posts
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newlyborn wrote: 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 Expert
Jun 24, 2006
15769 posts
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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.
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Nov 10, 2012
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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
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Scarborough
try getting a stick shift...dealers are much more flexible :D
Deal Guru
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Mar 8, 2002
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Jim321 wrote: 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.
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Deal Addict
Nov 13, 2012
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Edmonton
Jim321 wrote: 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.
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Nov 10, 2012
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CalgaryExotics wrote: 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
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Montreal
Jim321 wrote: 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.
Deal Addict
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Dec 15, 2004
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North York
The low mileage is likely the reason their willing to wait it out.

Didn't Honda offering deep discounts on these early model year accords(remember neighbor got like $5k+off a new 08 or 09), so maybe the dealer paid too much for it, so they really can't budge.

Also the math seems correct for 5% off on the ORIGINAL price at $18250.
Paying them only $16900 would be nearly 7.5% off.
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Dec 23, 2007
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There are some dealers that make it their policy to have a really low sticker price, but they don't move much if at all on that price. Haldimand Motors does this I believe.
Deal Addict
Nov 13, 2012
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Edmonton
Jim321 wrote: 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.
You are trying to act smarter than the dealership. They are the ones witht the product. They can do as they chose
Deal Addict
Nov 13, 2012
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neverhaveiever wrote: 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.
1000 off list price is not a low ball.
Deal Expert
Feb 24, 2007
15169 posts
2743 upvotes
Private small car lots work on a different model than the large dealerships as their overhead is a fraction of the big guys. The used car market is very strong in GTA and there are always those that are willing to pay more than the actual value of the car. Simply, there are too many people with money.
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Jun 2, 2009
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I'm surprised they refused the sale on only 1k off..are u sure that was all he asked for? Anyway haggling car prices is not what it used to be...they know someone else will come and buy it full asking price
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Nov 10, 2012
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HeavenLeigh wrote: I'm surprised they refused the sale on only 1k off..are u sure that was all he asked for? Anyway haggling car prices is not what it used to be...they know someone else will come and buy it full asking price
He took a picture of the computer screen where the guy wrote the offer up for 16,900. Wouldn't take it. So he walked out the door.

They called him back and pretty much trolled them. The ball's in his court now, not that of the dealers. He wouldn't go back even if they wanted to settle on 16,900. I don't blame him
Deal Addict
Nov 13, 2012
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Edmonton
The KBB for this a 2009 Honda Accord EX 4 cylinder with 22miles in very good condition is 17056. They will most definately not let go of a vehicle for less than the KBB.
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Jan 6, 2011
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Debonair wrote: There are some dealers that make it their policy to have a really low sticker price, but they don't move much if at all on that price. Haldimand Motors does this I believe.
A large dealer I dealt with is just like that, they don't budge.

Here is what you can do:
1. Find model year just about to fall off the power train warranty, so there's large anticipated price drop, or they will have to sell back to auction. Normally OEM dealers do not sell cars beyond 4yrs or whenever the warranty falls off, just unhappy clients in the service department and you will never buy another car there again. To you that residual warranty will buy you enough time to look up all the TSB there is and get ***** fixed.
2.Find a large volume dealership, get the Whole Sale Price off the Red Book from any Toronto Public Library, price it yourself based on Mileage and features and whatnot
3. Book an appt with sales office through phone for test drive, preferable on a Saturday morning and on a winter snowing day.
4. Drive the car, ask the service department to jack the car up and check the car yourself, find all the problems you see with the car.
5. If you want the car, inform the sales guy your price, get up and leave. Keep talking to bare facts you required and if he confronts you (name calling or whatnot), slam the table (just so everyone noticed something happened) then leave (don't insult back). Complain the salesman to his manager for whatever ***** he/she was pulling.

Personally I prefer getting a car with exceptional quality at fair market price than getting a deal but risking flaky quality down the road.

Getting into how much it cost the dealer is irrelevant, and you will be very heartbroken how much these guys could be making off you for zero work done. Market wholesale is a good reference, add 1 to 3K for retail. As far as you are concerned, the car is their property, they could just set it on fire and still not sell it to you.

This salesman-carpark business model is so outdated and broken (dealer knows all the bid, but you don't). Next time I would try out the fixed price expert shopper thing, where you pay him $500 and he find you the best car. It's just a fuqing car man, why all the hassle.
Deal Addict
Nov 13, 2012
1468 posts
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Edmonton
LongLiveRFD wrote: A large dealer I dealt with is just like that, they don't budge.

Here is what you can do:
1. Find model year just about to fall off the power train warranty, so there's large anticipated price drop, or they will have to sell back to auction. Normally OEM dealers do not sell cars beyond 4yrs or whenever the warranty falls off, just unhappy clients in the service department and you will never buy another car there again. To you that residual warranty will buy you enough time to look up all the TSB there is and get ***** fixed.
2.Find a large volume dealership, get the Whole Sale Price off the Red Book from any Toronto Public Library, price it yourself based on Mileage and features and whatnot
3. Book an appt with sales office through phone for test drive, preferable on a Saturday morning and on a winter snowing day.
4. Drive the car, ask the service department to jack the car up and check the car yourself, find all the problems you see with the car.
5. If you want the car, inform the sales guy your price, get up and leave. Keep talking to bare facts you required and if he confronts you (name calling or whatnot), slam the table (just so everyone noticed something happened) then leave (don't insult back). Complain the salesman to his manager for whatever ***** he/she was pulling.

Personally I prefer getting a car with exceptional quality at fair market price than getting a deal but risking flaky quality down the road.

Getting into how much it cost the dealer is irrelevant, and you will be very heartbroken how much these guys could be making off you for zero work done. Market wholesale is a good reference, add 1 to 3K for retail. As far as you are concerned, the car is their property, they could just set it on fire and still not sell it to you.

This salesman-carpark business model is so outdated and broken (dealer knows all the bid, but you don't). Next time I would try out the fixed price expert shopper thing, where you pay him $500 and he find you the best car. It's just a fuqing car man, why all the hassle.
You are trying to say the dealer does zero work! You'd be surprised at how many hours these salesman/owners put in. They have an overhead and only get paid when they sell. They do not get paid a salary.

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