Price changes when trading in

Elfinknight

Hi

I've spent the day looking at cars.

Maybe there is a reason behind this but it just looks like a con job to me.

some of the cars looked at, had no price up on them, and when asked, the sales man wouldn't tell until he knew if I was trading in or not.

In another place the salesman quoted me 12000 for a 3 year old car and when he found out I was trading in my own the price went up to 13500. I also noticed this on an ad in carzone.ie

Surely the price of the car I'm looking at has a fixed value and should not be dependant on whether I'm trading in or not, especially when he would not give me a price for my own without looking at it.

Are they trying to get their 12000 and a free car to boot.

I been wary of car dealers since I heard the story of a guy who traded in his car for a newer one. Thinking he got a good deal, when his sister was looking for a car, he recommended who he dealt with.

when the sister arrived at the car dealers, the sale man had just the car for her and proceeded to show her the car yer man had traded in- at 3 times the price they had given him for it.

Any opinions on this?

Pottler

Yes, it sounds like trying to make a living dealing in cars.

bazz26

It doesn't work that way. The price displayed on the advert or windscreen of the car is usually the dealer's straight deal asking price. This price includes a discount for buying the car straight out with no car to trade in against it. When you introduce a trade-in to the deal then the asking price of the other car rises because the dealer's straight deal discount is removed.

If you want to avail of the cheapest price then you should consider selling your old car privately and then walk in with cash. Having a trade-in gives you a financial disadvantage.

Elfinknight

Pottler wrote: »

Yes, it sounds like trying to make a living dealing in cars.

Which one?

The 3X increase in yer man's car sounds a bit excessive, but I do understand the dealer has to make a living too.

But varying the value of the car being sold based on whether you are trading in or not just don't sound right. Especially when he does not know what you are trading in or how much it is worth.

Elfinknight

bazz26 wrote: »

It doesn't work that way. The price displayed on the advert or windscreen of the car is usually the dealer's straight deal asking price. This price includes a discount for buying the car straight out with no car to trade in against it. When you introduce a trade-in to the deal then the asking price of the other car rises because the dealer's straight deal discount is removed.

If you want to avail of the cheapest price then you should consider selling your old car privately and then walk in with cash. Having a trade-in gives you a financial disadvantage.

After what I had to deal with today, I'm considering it. I would probably come out better off.

Esel

Elfinknight wrote: »

... I heard the story of a guy who ....

Pics or GTFO.

mickdw

OP, dealer could have a car and could offer it for sale to you in either of the following ways:

10,000 plus your own car to trade to a car with a sticker price of 13,000 (offering 3k for your car)
or
10,000 plus your own to trade to a car with a sticker price of 11,500. (offering 1.5k for your car)

Now the cost to change is exactly the same however many people will be insulted by the more realistic trade in value on the lower price deal and may infact go to another dealer who might offer them a better trade value but no doubt will have it added on too.
Its just a way of giving people a good price for their car and making people happier about the deal as it appears they are buying a more expensive car and are getting a good trade in.
Having said that, if your trade in is of low value, you might well end up giving it away for free depending on how you bargain etc. If your car was worth around 1500, its not worth trading when buying a car around 10,000. Best to sell privately cheap and then go for straight sale on the next car hopefully knocking a big chunk of the asking price.

Elfinknight

mickdw wrote: »

OP, dealer could have a car and could offer it for sale to you in either of the following ways:

10,000 plus your own car to trade to a car with a sticker price of 13,000 (offering 3k for your car)
or
10,000 plus your own to trade to a car with a sticker price of 11,500. (offering 1.5k for your car)

Now the cost to change is exactly the same however many people will be insulted by the more realistic trade in value on the lower price deal and may infact go to another dealer who might offer them a better trade value but no doubt will have it added on too.
Its just a way of giving people a good price for their car and making people happier about the deal as it appears they are buying a more expensive car and are getting a good trade in.
Having said that, if your trade in is of low value, you might well end up giving it away for free depending on how you bargain etc. If your car was worth around 1500, its not worth trading when buying a car around 10,000. Best to sell privately cheap and then go for straight sale on the next car hopefully knocking a big chunk of the asking price.

So it's all an illusion... definetly will be selling mine private. can't understand why anyone trades in so.

Anyway, while your first scenario sounds better, I already know the price of the straight deal. so f he is offering 3000 for my own my common sense is telling me I should only be paying 8500 for the new one.

the_syco

Elfinknight wrote: »

The 3X increase in yer man's car sounds a bit excessive, but I do understand the dealer has to make a living too.

Someone brings in an old BMW. Dealer gives him €800 for it. Dealer find out it's a rare BMW that had only 15 of it ever made. Dealer sells it for €8,000.

The original owner of the BMW is at fault for not checking how much their car was worth, but often they don't care.

=-=

When looking for a car, I checked the price online, and then said I was trading in when I went to the garage to check the car out personally. The old car had a fair bit of paint damage (t'was vandalised), so only got shy of a grand off the new car, but better than nothing.

My point; unless you know the cars value, you'll never know if you're getting a good trade in.

=-=

Oh, and to sell your car, the garage may also include the price of a warranty and any work they did on the car before they could sell it.

gary nevillevil

Pottler wrote: »

Yes, it sounds like trying to make a living dealing in cars.

What by ripping people off.?
No wonder lots of these are going/gone out of business.

Senna

gary nevillevil wrote: »

What by ripping people off.?
No wonder lots of these are going/gone out of business.

Dealers don't want your car as a trade in, they are much happier to deal in cash deals. If they want cars on their forecourt they will source them themselves, they don't want or need your car.
A lot of people don't want the hassle of selling cars themselves, so dealers will take trade in's but the seller will be penalised for it.

If you want the maximum amount of cash for your car, then sell it yourself, if you want minimum hassle and a quick deal, then be prepared to lose money.


p.s. plenty of companies in all sectors are going out of business, many of them didn't deserve to fail and many didn't even make bad decisions, only bad timing.

Gurgle

mickdw wrote: »

Its just a way of giving people a good price for their car and making people happier about the deal as it appears they are buying a more expensive car and are getting a good trade in.

This car is €10k, unless you're trading in. If you're trading in then its €12k and I'll give you €2k trade in value. :rolleyes:

Do these cowboys really think the general public are that stupid?

George Dalton

Elfinknight wrote: »

So it's all an illusion... definetly will be selling mine private. can't understand why anyone trades

People trade in their car because they don't want the hassle of selling it privately. Wait until you have your car advertised on donedeal and you will soon understand. You will always work out better financially by selling your own car and then buying the replacement as a straight deal. This is because you don't have to do as much prep work on the car before selling, you don't have to give a warranty, you don't have to make a weekly wage out of it, you don't have any overheads to cover or taxes to pay in relation to the deal. The question is whether or not the savings made by selling privately is worth the hassle of doing it that way.

The price issue is easy to get your head around once you realise the dealer has to make a living. The dealer won't stay in business for long giving full retail trade in values off already discounted straight deal prices. As another poster above says, you need to concentrate on the cost to change rather than any optics regarding the supposed price of the car minus a theoretical trade in value.

knifey_spoonie

It think the largest issue here is the Irish Consumer. When they trade in a vehicle they expect to be given the retail value for it. People seem to forget the costs involved in preparing a car for sale.

The motor trade is pretty unique in the way it operates. Its the only business that im aware of that in 70% of sales you end up buying something off the purchaser. Imagine going to a greengrocer and saying ill buy this apple if you buy my banana.

Anywho getting to the point. As others have said the difference between the price trading in and the price buying straight, Its basically a intangible amount of money that its used in order meet the overly high expectations that the average customer has as a value for there own vehicle.

djimi

A few years back they used to give a discount off the sticker price if you were buying with straight cash (so the car you saw for €12000 would have been marked as €13500 and he would have given you €1500 off for buying cash). Now the sticker price is the cash only price, and the trade in price will be higher before they take into account the value of your car.

The end result is the same; the difference now is back then you would have walked into the forecourt and seen a price of €13500 on the car whereas now you see €12000; the latter obviously looks better.

djimi

knifey_spoonie wrote: »

Anywho getting to the point. As others have said the difference between the price trading in and the price buying straight, Its basically a intangible amount of money that its used in order meet the overly high expectations that the average customer has as a value for there own vehicle.

Pretty much this. Trying to combat the "I saw my car on DoneDeal for €4000; why are you only offering me €2500" arguement.

Gurgle

Elfinknight wrote: »

proceeded to show her the car yer man had traded in- at 3 times the price they had given him for it.
Any opinions on this?

I wouldn't worry too much about this, the dealer may have stripped the car down, rebuilt the engine, changed the timing belt etc etc.

It could be the same car with €1000 worth of new parts and dozens of hours work.

Or he may have only unlocked it once to put the price tag in.

lifer_sean

When trading in, the only thing that matters is how much you have to part with.

Say I have a car, priced 11,000, and I allow you 2000 on your car as trade-in, which retails at 2500. I'm asking you for 9000 to change, will spend 300 on your trade-in, and will make 200 profit on it.

ROR or George have same spec/age car, priced at 13,000, but allow you 3000 (500 over value) on your trade-in. They ask you for 10,000 to change. Many people will go for this deal despite costing them 1000 more, because of either (a) the guys are giving more for your trade-in so you are chuffed with that, or (b) their car must be better than mine because it's 2000 more !

So how do you win with that physcology (sp?) ? By asking if you are trading in or not, I can determine if I can discount my car to max, to offer you the best possible price, or keep the price up a bit to enable some profit on the trade-in.

As an (older !) dealer said to me years ago, why would I sell two cars (original and trade-in) just to get the price of one ? Need to cover the costs of selling the trade-in also !

On the trade-in being sold at 3x the price, well it all depends. Say I allow 300 euro on your trade-in. I valet it, do a few jobs, put it through an NCT. I spend 300 euro on it (easily done !). I advertise at 1000, sell at 900. I sell at 3x what I bought it in for. My nett profit after vat and tax is 117 euro, excluding overheads. Not exactly excessive.

Gurgle

lifer_sean wrote: »

Many people will go for this deal despite costing them 1000 more, because of either (a) the guys are giving more for your trade-in so you are chuffed with that, or (b) their car must be better than mine because it's 2000 more !

So your explanation is that consumers are, on the whole, stupid?

Mellio

I think one of the biggest problems people have when buying cars is that generally we know all vehicles depreciate and lose value year on year so when we go to purchase we dont like to feel anyway that someone is adding to the price in the negotiation stage as its bad enough buying something that continues to lose value.

I think personally the additional amount put onto a car when trading in is also to ensure the garage dont make a loss on the trade-in if for some reason they over value your trade in and have to sell for less.

Either way the garage does have to make money I just think they should be a bit clearer in there selling arrangements.


I would not go into a garage where there are no prices attached to cars, that for a start gives the garage room to manouvere the price before discussions have even begun.


I also think they should have to show a cash price and a trade in price on the vehicle being advertised.

If it was me I would try to sell my old car first and go in with cash, it suits bot the buyer and the seller, no brainer really. If you dont get the offers you want then go for the trade in but make sure you of the following:

• The trade in offer is better than the private sale offer
• The trade in price less the trade in offer is better than the private sale offer and cash price.

lifer_sean

Gurgle wrote: »

So your explanation is that consumers are, on the whole, stupid?

Some are, some most definitely are not. A large minority of otherwise sensible people will go for the "I'm getting more for my trade-in" line.

Just trying to make the point that regardless of what pricing strategy the dealer uses, (s)he can't win, in that there will always be some buyers who will be unhappy.

The dealer provides a service (good or bad) to the public. The customer will determine if they want that service (some will, some won't). The dealer must make sufficient profit to stay in business.

I priced a new Avensis for a friend a number of years ago, taking 100-200 euro margin on a 20k car. Another dealer (now bankrupt) beat the price. My friend was delighted when I told him the other dealer was making a loss on the transaction. Part of the deal was the fitting of a towbar, which the dealer did a crap job on since they had no margin and couldn't afford the workshop time. Morals of the story? (a) you get what you pay for, and (b) the dealer must make some profit to stay in business.

bazz26

Gurgle wrote: »

So your explanation is that consumers are, on the whole, stupid?

No. he is saying that alot of people lose track of the important figure, the cost to change price. Instead concentrate entirely on how much they are getting for their old car in the deal. Trade in figures are generally all smoked glass and mirrors.

lifer_sean

Mellio wrote: »

If it was me I would try to sell my old car first and go in with cash, it suits bot the buyer and the seller, no brainer really. If you dont get the offers you want then go for the trade in but make sure you of the following:

• The trade in offer is better than the private sale offer
• The trade in price less the trade in offer is better than the private sale offer and cash price.

Of course you are better off to sell your own car first.

However, if you didn't "get the offers you want" when selling your own car privately, doesn't that really mean that the car isn't actually worth what you were asking for it ? If it was, it would have been bought by someone !

Why would you expect the dealer to give you more in real terms ("The trade in price less the trade in offer is better than the private sale offer and cash price") than what you can get for it yourself ? You are expecting the dealer to give you more than the market value for the car, which he then has to prepare for sale and sell with warranty ? This goes back to the "selling two cars to get the price of one" arguement. Why would any dealer go for this deal ? They would have to be desperate to sell their car, and if they are that desperate, then you would need to worry !

oregano

I'd like to know what the 3x figure in the initial post was. If this car was taken in at, say 1000, and was valeted, timing belted, warrantied, NCT done and now advertised at 2999, I'd see no problem.

If it came in at 5000, had the same work and is now for sale at 15000 I would be very suspicious...

Pottler

Gurgle wrote: »

So your explanation is that consumers are, on the whole, stupid?

No, not stupid, just ignorant. Ignorant of the fact that roof over the car dealers head costs money, as do the mechanics he pays every friday, as he did the valeter, the rates, the ESB, that lift he had to buy, the tools, the glass that got smashed last week, the toilet rolls, the paye, the Vat, the Income tax, the insurance.. I could go on. Why is the deal so much apparently in favor of the Dealer? It probably isn't, or they wouldn't be dropping like flies, it just looks that way, until you think about it. BTW, those jeans you bought last week were marked up ten times what they cost. Why? See the above.

Elfinknight

George Dalton wrote: »

People trade in their car because they don't want the hassle of selling it privately. Wait until you have your car advertised on donedeal and you will soon understand. You will always work out better financially by selling your own car and then buying the replacement as a straight deal. This is because you don't have to do as much prep work on the car before selling, you don't have to give a warranty, you don't have to make a weekly wage out of it, you don't have any overheads to cover or taxes to pay in relation to the deal. The question is whether or not the savings made by selling privately is worth the hassle of doing it that way.

The price issue is easy to get your head around once you realise the dealer has to make a living. The dealer won't stay in business for long giving full retail trade in values off already discounted straight deal prices. As another poster above says, you need to concentrate on the cost to change rather than any optics regarding the supposed price of the car minus a theoretical trade in value.

I already understand the dealer has to make a living but when I look at the straight deal prices, I see no discount only what I consider natural depreciation of the car.

As to selling it myself, I have sold my last two cars privately. I will admit that they were reasonably old cars but they were in good nick and good runners and the only prep I did was to wash and vacuum them.

The reason I started looking at trade ins this time is because I finally have a car that is worth trading in, (or so I thought).

Sorry if it seems that I cant get my head around it, but if these "discounts " are real, they should advertise the full price first (Trade In Price) and then underneath state the % discount or sale price for a straight deal (Non Trade In Price) like we see in other shops, and make it much more transparent

Elfinknight

knifey_spoonie wrote: »

It think the largest issue here is the Irish Consumer. When they trade in a vehicle they expect to be given the retail value for it. People seem to forget the costs involved in preparing a car for sale.

The motor trade is pretty unique in the way it operates. Its the only business that im aware of that in 70% of sales you end up buying something off the purchaser. Imagine going to a greengrocer and saying ill buy this apple if you buy my banana.

Anywho getting to the point. As others have said the difference between the price trading in and the price buying straight, Its basically a intangible amount of money that its used in order meet the overly high expectations that the average customer has as a value for there own vehicle.

I think if that is the case they should be brutally honest with the customer and tell them the true worth of the car instead of inflating it up to make it look that they are getting a better deal.

Besides, when I sold my previous cars privately, I used the internet to look up what others were charging for them, both private and dealers and set my asking price accordingly.

Elfinknight

oregano wrote: »

I'd like to know what the 3x figure in the initial post was. If this car was taken in at, say 1000, and was valeted, timing belted, warrantied, NCT done and now advertised at 2999, I'd see no problem.

If it came in at 5000, had the same work and is now for sale at 15000 I would be very suspicious...

As I said it was a story I had heard a few months back when discussing changing the car with a friend. I'll have to get back to him to see where he heard it and if he has the figures.
If he does, I'll post them. If he doesn't, I'll say so.

doolox

Run your used car into the ground. I have done this since starting to drive in 1979. Unless you are VERY lucky you will get only a nominal amount for your car. I kept my first car for 7 yrs second for 5 third for 5 fourth for 6yrs and my fifth, a toyota corolla for a hairy 10 yrs until the gear box said "sayonara"!

My cherished moment with that car was being photographed by Japanese Tourists in Windsor when visiting my sister who lived there at the time.....they were a bloody good car.

I am currently driving a SEAT Ibiza which is in love with petrol but I cannot afford anything else. 500 km, fill the tank with €70 of petrol and drive like a hoor.......no choice in my job.

Cars are a consumer item and shouldn't be regarded as have a decent selling price. Buy at middle life ( if you can as people will now be hanging on to decent runners ) and then RUN IT INTO THE GROUND and bin it................

knifey_spoonie

Elfinknight wrote: »

I think if that is the case they should be brutally honest with the customer and tell them the true worth of the car instead of inflating it up to make it look that they are getting a better deal.

Besides, when I sold my previous cars privately, I used the internet to look up what others were charging for them, both private and dealers and set my asking price accordingly.

Unfortuantly people don't buy cars off people they dislike. In 99% of cases when a customer is told the car they the car they were sure was worth €8000 is infact only €6500. Then you continue to explain how you will spend €1000 in order to return the car to a condition that you are happy to retail it. You have done two things here firstly, they are now annoyed because you have told them they are worng with the value of their car. Secondly you have pointed out all the issues that in most cases they will know need to be done, but were hoping you wouldn't notice.

Its just much easier to advertise the car at a retail price, with the intangable €1000 included. Now the customer is getting €7500 for the they thought was worth €8000 and at that stage it much easier to explain that their value is only €500 out.

In both cases the cost to change has stayed the same. In one case they don't have to re-educate themselves on the realistic value of the vehicle or face the fact the car has depreciated by X amount. In the other they get close to what they believed their car was worth and dont have to face the cruel facts of depreciation.

djimi

The more transparent way to handle a trade in would be to treat both the sale of the new car and the buying of the car to be traded in as two seperate transactions; the car I am selling you will cost €10000 and I will give you €2500 for you car etc. Im not sure how well that would go down with the general customer though, and it obviously leaves less bargaining room for the dealer.

oregano

knifey_spoonie wrote: »

Elfinknight wrote: »

I think if that is the case they should be brutally honest with the customer and tell them the true worth of the car instead of inflating it up to make it look that they are getting a better deal.

Besides, when I sold my previous cars privately, I used the internet to look up what others were charging for them, both private and dealers and set my asking price accordingly.

Unfortuantly people don't buy cars off people they dislike. In 99% of cases when a customer is told the car they the car they were sure was worth €8000 is infact only €6500. Then you continue to explain how you will spend €1000 in order to return the car to a condition that you are happy to retail it. You have done two things here firstly, they are now annoyed because you have told them they are worng with the value of their car. Secondly you have pointed out all the issues that in most cases they will know need to be done, but were hoping you wouldn't notice.

Its just much easier to advertise the car at a retail price, with the intangable €1000 included. Now the customer is getting €7500 for the they thought was worth €8000 and at that stage it much easier to explain that their value is only €500 out.

In both cases the cost to change has stayed the same. In one case they don't have to re-educate themselves on the realistic value of the vehicle or face the face there car has depreciated by X amount. In the other they get close to what they believed their car was worth and dont have to face the cruel facts of depreciation.

I utterly agree with this post. However, the car being advertised at "13500 or straight deal 12000" still looks wrong to the beholder, and is hard to stomach / understand for a customer, any customer.

I do wonder why, in the day of mobile Internet, the initial poster did not already know the price of the cars he was going to look at. Or ask for a stock list upon arrival.

If a salesman working for me answered "have you a trade in" when asked "how much is this" he would be sent packing.

Elfinknight

knifey_spoonie wrote: »

Unfortuantly people don't buy cars off people they dislike. In 99% of cases when a customer is told the car they the car they were sure was worth €8000 is infact only €6500. Then you continue to explain how you will spend €1000 in order to return the car to a condition that you are happy to retail it. You have done two things here firstly, they are now annoyed because you have told them they are worng with the value of their car. Secondly you have pointed out all the issues that in most cases they will know need to be done, but were hoping you wouldn't notice.

Its just much easier to advertise the car at a retail price, with the intangable €1000 included. Now the customer is getting €7500 for the they thought was worth €8000 and at that stage it much easier to explain that their value is only €500 out.

In both cases the cost to change has stayed the same. In one case they don't have to re-educate themselves on the realistic value of the vehicle or face the face there car has depreciated by X amount. In the other they get close to what they believed their car was worth and dont have to face the cruel facts of depreciation.

But they are not advertising the price with the intangable 1000 Euro. They are advertising the the "discounted" price and only tell you the real price when you mention that you are trading in.

oregano

[Quote

This car is €10k, unless you're trading in. If you're trading in then its €12k and I'll give you €2k trade in value. :rolleyes:

Do these cowboys really think the general public are that stupid?[/Quote]

I doubt anyone thinks anyone is that stupid. It does not become 10k plus the trade in, now that would be stupid to think that. Below find an explanation as to why it would be stupid to think a motor dealer would find your simple line about cowboys to be stupid indeed:

Client has a 206 to trade in due lots of work. I would expect to buy its twin at auction any week for 1000. Client thinks its worth 3k. I see he has valued it at this because other, gorgeous 206s are on carzone at 3k, in garages, with a warranty. I, the vendor, say to him ok, I will give you 3k off the 12k advertised, thus 9k to change.

I also say to him that, should he give the 206 to his nephew, then the total is 10k, no trade in.

He says, so really you're giving me a grand for my 206!?!?

I say yes.

That is the difference between 10k straight and 12k with trade in.

Elfinknight

oregano wrote: »

I utterly agree with this post. However, the car being advertised at "13500 or straight deal 12000" still looks wrong to the beholder, and is hard to stomach / understand for a customer, any customer.

I do wonder why, in the day of mobile Internet, the initial poster did not already know the price of the cars he was going to look at. Or ask for a stock list upon arrival.

If a salesman working for me answered "have you a trade in" when asked "how much is this" he would be sent packing.

Truth to be told, I didn't think of it. I presume you mean the general prices of the various models, and not any specific vehicles.

oregano

Elfinknight wrote: »

oregano wrote: »

I utterly agree with this post. However, the car being advertised at "13500 or straight deal 12000" still looks wrong to the beholder, and is hard to stomach / understand for a customer, any customer.

I do wonder why, in the day of mobile Internet, the initial poster did not already know the price of the cars he was going to look at. Or ask for a stock list upon arrival.

If a salesman working for me answered "have you a trade in" when asked "how much is this" he would be sent packing.

Truth to be told, I didn't think of it. I presume you mean the general prices of the various models, and not any specific vehicles.

I mean the specific 3 year old vehicle for 12k which got bumped up in price. And the other cars that got bumped up. Unless your trade in is literally worth nothing, surely your cost to change was less than 12k?

Elfinknight

Well I checked carzone and autotrader when I got home but that specific car wasn't up when I did, but then he did say he'd only got it the day before.

The car I want to trade in is worth around 6k in my opinion.So when I did my sums I was expecting 6000 with my own, not 8000 with my own. The salesman valued my car at 5500 so I wasn't that far off in my own estimation.

I was originally quoted 12000.
8000 + 5500 (salesman's value of my car)=13500

Senna

I dont understand the problem here, the salesman is giving you €4k for your car, simple maths will tell you that. You can accept that offer or refuse it. If you think your car is worth €5.5k/€6k, do you really expect a dealer to give you that? of course not.

Esel

At the risk of repeating myself:

Elfinknight wrote: »

I heard the story of a guy who traded in his car for a newer one...

Esel wrote: »

Pics or GTFO.

oregano wrote: »

I'd like to know what the 3x figure in the initial post was.

Pottler wrote: »

BTW, those jeans you bought last week were marked up ten times what they cost. Why? See the above.

True! I was in a well-known budget drapers a few years ago, and jeans were being sold for €11. As it happened, the supplier (who appeared to be of Indian/Pakistani ethnicity) was nearby discussing the terms of the next order with the owner/buyer at the same time. The jeans were being supplied at €1 a pair.

Elfinknight wrote: »

As I said it was a story I had heard a few months back when discussing changing the car with a friend. I'll have to get back to him to see where he heard it...

So, now it is double hearsay!

Someone told me that someone told them that ..... How many layers does this onion have?

I agree with all the economics lessons posted above, btw.

oregano

Elfinknight wrote: »

Well I checked carzone and autotrader when I got home but that specific car wasn't up when I did, but then he did say he'd only got it the day before.

The car I want to trade in is worth around 6k in my opinion.So when I did my sums I was expecting 6000 with my own, not 8000 with my own. The salesman valued my car at 5500 so I wasn't that far off in my own estimation.

I was originally quoted 12000.
8000 + 5500 (salesman's value of my car)=13500

This means your car is worth 4k wholesale, but perhaps 6500 asking price, to realise close to that.

Again, the 12k/13.5k prices are not easy to fathom, and they perhaps can look like sharp practice unless they are clearly explained by the sales rep. Then they become more transparent.

At 12k on carzone etc the dealer gets more hits than at 13500, when he does eventually advertise it online.

My advice is if you are not comfortable with the deal being offered walk away.

corktina

it a weird practise that I won't stand for.
Car A worth x. Car B is worth y. x-y SHOULD equal the price to pay. If they want it any other way, I go elsewhere

djimi

Elfinknight wrote: »

The car I want to trade in is worth around 6k in my opinion.So when I did my sums I was expecting 6000 with my own, not 8000 with my own. The salesman valued my car at 5500 so I wasn't that far off in my own estimation.

I was originally quoted 12000.
8000 + 5500 (salesman's value of my car)=13500

The problem in this case is that the dealer was basically pretty stupid about how they explained it.

The car has a sticker price of €12000. If the dealer had said to the OP that their car was worth €4000 to him (knowing that he will try to resell it for €6000) so they will sell them the new car for €12000 less the €4000 so the OP hands over €8000 there would have been no problem. Except this genius declared that the sticker price is actually higher for a trade in, €13500, but that he would give the OP more for their car (€5500). The end result is the same; the OP pays €8000 plus their car and drives off in the new car, but the second scenario makes it sound like they are getting ripped off.

The problem is the trade in price. The OP went into the dealer with a view that their car was worth €6000 (and expecting to get close to that by the sounds of it), and the dealer allowed them to think that they were getting that amount, but only by bumping up the sticker price. Had the dealer explained the trade in properly, and explained that while the car might be worth €6000, they are not going to take it in, prepare it for sale and sell it on at no profit, so they are only prepared to offer €4000 for the car. The OP may still not have liked that, but at least they would know why the dealer was coming to the price that he did.

Elfinknight

Senna wrote: »

I dont understand the problem here, the salesman is giving you €4k for your car, simple maths will tell you that. You can accept that offer or refuse it. If you think your car is worth €5.5k/€6k, do you really expect a dealer to give you that? of course not.

The problem is the dealer is hiking up his price before he ever saw the car.
He quoted me one price. found out I had trade in, never asked that what I had year or condition and hiked up his price.
That was Thursday, the day of the original post. my girlfriend was driving.
Yesterday, I took my own car in. That was the first time any dealer knew what I was trading in and that's when I was given the quote of 5500.

Maybe I'm not making myself clear as to the chain of events.

My issue is that he quoted me what some of you are calling a "discount" price, found out I was trading in and then told me a different, higher price. without any knowledge of what I was trading in,

If as people are saying, they are quoting "discount" prices, They should be putting up the full price, with the discounted price or percentage off for straight deals underneath. and make it transparent.

Instead they can pull any figure they want out of their collective asses by only showing one price

djimi

Elfinknight wrote: »

If as people are saying, they are quoting "discount" prices, They should be putting up the full price, with the discounted price or percentage off for straight deals underneath. and make it transparent.

Instead they can pull any figure they want out of their collective asses by only showing one price

This has always been the way in fairness. They are not going to start making it too transparent as it gives them little room to manoeuvre. Generally car sales are a merry dance of bull****; the dealer starts with a higher price, the buyer wants a discount, if a trade in is involved it gives eveyone room to negotiate and generally at the end of it the dealer can pretend that the seller is basically taking food off his kids table with the price he is selling the car for, the buyer thinks they got a great deal with the discounts they were given and both parties leave feeling that they have gotten the deal that they wanted.

As for advertising the cash price vs the trade in price; as I say it used to be a case that they advertised the trade in price, but now they seem to have gone the other way. If the dealer is clever about it and is honest about the amount that they are prepared to offer for a trade in then there really is no issue. I guess the choice they have to make is do they potentially put a customer off by offering them €2000 less than their car is worth for a trade in, or do they potentially put them off by giving them what they want for their car but putting the €2000 extra on the price of the new car. The profit from the trade in has to come from somewhere.

Elfinknight

djimi wrote: »

The problem in this case is that the dealer was basically pretty stupid about how they explained it.

The car has a sticker price of €12000. If the dealer had said to the OP that their car was worth €4000 to him (knowing that he will try to resell it for €6000) so they will sell them the new car for €12000 less the €4000 so the OP hands over €8000 there would have been no problem. Except this genius declared that the sticker price is actually higher for a trade in, €13500, but that he would give the OP more for their car (€5500). The end result is the same; the OP pays €8000 plus their car and drives off in the new car, but the second scenario makes it sound like they are getting ripped off.

The problem is the trade in price. The OP went into the dealer with a view that their car was worth €6000 (and expecting to get close to that by the sounds of it), and the dealer allowed them to think that they were getting that amount, but only by bumping up the sticker price. Had the dealer explained the trade in properly, and explained that while the car might be worth €6000, they are not going to take it in, prepare it for sale and sell it on at no profit, so they are only prepared to offer €4000 for the car. The OP may still not have liked that, but at least they would know why the dealer was coming to the price that he did.

You a correct in that I was expecting to get in or around the 6000 region for it, when I did take it in to show the dealers, but after the day before, I really had no intention of trading in any more, just straight deal.

But however, I was still curious. I was asked by several of them what was I hoping to get for it. My reply to them all was the same.
"have a look and tell me what you think its worth" lowest quote was 5000 highest was 5500 from the guy who changed his price without even seeing it the day before.

oregano

Elfinknight wrote: »

Senna wrote: »

I dont understand the problem here, the salesman is giving you €4k for your car, simple maths will tell you that. You can accept that offer or refuse it. If you think your car is worth €5.5k/€6k, do you really expect a dealer to give you that? of course not.

The problem is the dealer is hiking up his price before he ever saw the car.
He quoted me one price. found out I had trade in, never asked that what I had year or condition and hiked up his price.
That was Thursday, the day of the original post. my girlfriend was driving.
Yesterday, I took my own car in. That was the first time any dealer knew what I was trading in and that's when I was given the quote of 5500.

Maybe I'm not making myself clear as to the chain of events.

My issue is that he quoted me what some of you are calling a "discount" price, found out I was trading in and then told me a different, higher price. without any knowledge of what I was trading in,

If as people are saying, they are quoting "discount" prices, They should be putting up the full price, with the discounted price or percentage off for straight deals underneath. and make it transparent.

Instead they can pull any figure they want out of their collective asses by only showing one price

I'm certainly not defending the two tier pricing done here, but look at it this way:

He didn't go "em it's 13500 if you're trading in a 06 polo, 14900 if its a Hyundai sonata, etc."

The 13500 is used to massage the true value up by 1500 to help the customers ego, regardless of what the part exchange is.

A great many customers want to feel they got value on trade in.

Fiat in the late 90s started selling new cars at "open book" ie no discount. Customers now saw a new Punto at say 8000 when previously they were 10. They rushed to buy them, but were now getting 3k instead of 5 for trade in. They were disgusted. They moved to other, more expensive brands because they were "getting 5000".

Fiat got rid of open book fairly sharpish as the new unit sales dwindled.

Elfinknight

oregano wrote: »

I'm certainly not defending the two tier pricing done here, but look at it this way:

He didn't go "em it's 13500 if you're trading in a 06 polo, 14900 if its a Hyundai sonata, etc."

The 13500 is used to massage the true value up by 1500 to help the customers ego, regardless of what the part exchange is.

A great many customers want to feel they got value on trade in.

Fiat in the late 90s started selling new cars at "open book" ie no discount. Customers now saw a new Punto at say 8000 when previously they were 10. They rushed to buy them, but were now getting 3k instead of 5 for trade in. They were disgusted. They moved to other, more expensive brands because they were "getting 5000".

Fiat got rid of open book fairly sharpish as the new unit sales dwindled.

So why not just put up the trade in price and when the customer come in say
something like "well that's the trade in price. now if you want to do a straight deal, I'm sure we can work something out."

Not being funny, but it's this two tier pricing system as you call it doesn't really help the image of car dealers. I think most people consider them dodgy anyway.

mickdw

Elfinknight wrote: »

So why not just put up the trade in price and when the customer come in say
something like "well that's the trade in price. now if you want to do a straight deal, I'm sure we can work something out."

That is the traditional way and to me that makes the most sense. If Advertising a straight sale price, there is no sense in then giving a customer an inflated price, they would be better off at that stage just hitting the customer with the true trade in value as even the most stupid customer can see what they are doing.
In general, I think its a bad idea to be advertising the straight sale price

Gurgle

Senna wrote: »

I dont understand the problem here, the salesman is giving you €4k for your car, simple maths will tell you that. You can accept that offer or refuse it. If you think your car is worth €5.5k/€6k, do you really expect a dealer to give you that? of course not.

The problem is that the dealer isn't telling him this. That would be perfectly reasonable: Here's what I'll give you, take it or leave it.

The problem is the underhand attempt to pretend he's giving more of a trade in by inflating the asking price. I know it amounts to the same thing, but its still misleading.

djimi

Gurgle wrote: »

The problem is that the dealer isn't telling him this. That would be perfectly reasonable: Here's what I'll give you, take it or leave it.

The problem is the underhand attempt to pretend he's giving more of a trade in by inflating the asking price. I know it amounts to the same thing, but its still misleading.

The real problem is that the dealer was stupid enough to actually say that they were increasing the sticker price. One could argue that they were actually being too open about it. Had they left the sticker price as was and adjusted the amount they were going to give the OP for the trade in then it wouldnt have looked so bad, and the OP would have had no cause for complaint.

the culture of deference

Thats bad for dealers now.

Every time someone goes to trade their car in they will be aware that the list price is a load of BS. And immediately take 1500 quid off any list to start with before negotiating with salesmen.