I'm a car salesmen, Go ahead and ask me anything

[MoneyGuy]

I recently had my RAV4 in for service and they sent me home with a list of over $2,000 of stuff they said I needed done. I emailed the list to my home mechanic (he's licensed and teaches auto mechanics at a high school) who knows my vehicle and said that about $700 was important so that's what we did. I don't trust dealerships.

[Derek Sutton]

Originally Posted by the-rasta-masta

Old thread, but relevant title. Apologies if the Bump offends. I'm looking at trading in a vehicle, and am looking for some advice on what percentage a dealership is typically looking to make off a trade in.

For example, based on a several comparables, I'm confident that they will sell my car for 50k, and they are offering me 41k plus a GST tax credit of 5%. So all in it works out to $43,050. Two Questions:

1- Does offering this tax credit really cost the dealership anything? Or is this just technically removing the trade in value from the full GST cost of the new vehicle?

2- If I'm looking at the above correctly, and the dealer sells my car for $50k, they are looking at an 18% profit off my trade in for what it costs them at $41k. What range is typically expected?

I realize it's likely easier for me to sell privately for $50k. I'm just trying to determine what I should go back to them and if that would be worth the trade off for my time of selling it privately.

Thanks in advance for any help!

1. Customers only pay GST on the difference between the trade and the new vehicle when you trade in. So if you sell your vehicle privately you are going to be paying GST on the total price of the new vehicle (5% of $80000= $4000). If you trade in you pay GST on the difference, which appears to be 5% of $40,000 or $2000 so they will tell you you are getting $41 for your trade plus $2000 in GST savings so "in effect we are giving you $43000 for your trade, so no it doesn't cost the dealer anything. But we are all taught the "tax savings close".

2. Being only two years old any repair costs would still be under warranty so reconditioning costs would be minimal, however they add up fast. Minimum costs are $800+/- (Cleaninig, oil change and vehicle inspection). Does it need tires? or more importantly do they have to put tires on before they can re sell it??? $800 to $1500 (original factory tires are typically good for 60,000 km or so, about 3 years. Hows the windshield, is it cracked? $400, does the car have rain sense wipers or heads up display? easily $1500 for a windshield if it does. Any body damage or scratches? A power polish is $300- $500. All those costs add up. Plus standard known repairs for certain models, not likely in your case as your trade is very new but things like certain models bad with struts, leaking coolant/ power steering transmission lines etc...

Also consider the length of time it will stay on the lot.
Customer- "I really wanted to get $24000 for my mustang".
Me- "But why are you trading it in?"
Customer- "Well i don't like driving it in the winter, it suck on the icy roads"
Me- " Yes right, so knowing that we are going to be sitting on this car untill spring, thats why we are paying you $22,000. What day do you want to pick up your SUV?

In my world 18% gross is a pipedream, especially on used. As a volume dealership our margins are typically in the 3-5% range be it new or used. Go ahead and question them on their trade in value don't be shy about it., ask them what they plan to retail it for, show them comparables, have your maintnence records, build value in your trade just liek they are building value in what you are buying. you are selling them your car, they are selling you their car. Don't think it is "easier" to sell for $50k on your own....

[chemgear]

I've heard that license plates that start with "M" are dealer plates? As in they are owned/loaned out by car dealerships?

[puffnstuff]

Yes they are. Used to just be D and now they also have M. They are for use on dealership owned vehicles prior to registration/sale and not for any one specific vehicle and covered under the dealerships insurance policy.

Why?

[chemgear]

Originally Posted by puffnstuff

Yes they are. Used to just be D and now they also have M. They are for use on dealership owned vehicles prior to registration/sale and not for any one specific vehicle and covered under the dealerships insurance policy.

Why?

Interesting, there was a road rage incident with one. Guy looked like he was trying to cause an accident then saw him throw an object out of their window at another car.

[Calgary14]

My license plate starts with an M, and it's not a dealer car

[Derek Sutton]

Originally Posted by chemgear

I've heard that license plates that start with "M" are dealer plates? As in they are owned/loaned out by car dealerships?

It is an M or a D followed by 5 consecutive numbers

Originally Posted by puffnstuff

Yes they are. Used to just be D and now they also have M. They are for use on dealership owned vehicles prior to registration/sale and not for any one specific vehicle and covered under the dealerships insurance policy.

Why?

Originally Posted by Calgary14

My license plate starts with an M, and it's not a dealer car

Dealer plates are an M followed by 5 numbers. You would have a conventional plate wich would be three letters followed by 3 or 4 numbers

[Sliver]

In the 90s all cop cars (including ghost cars) had plates starting with CRL. That was handy to know.

[undercoverbrother]

Originally Posted by Sliver

In the 90s all cop cars (including ghost cars) had plates starting with CRL. That was handy to know.

I had totally forgotten about that.

[Regular_John]

Originally Posted by Resurrection

Do people follow the scheduled maintenance or is that a rip off?

Scheduled maintenance, yes I follow that, including the once a year hit of $250 or so for the "annual tune up", only because I can confirm the work needed against the manufacturers recommendations. If Mazda says "replace all these filters and tighten hoses at 145k" in the maintenance guide on their site I have no reason to not do it.

Originally Posted by MoneyGuy

I recently had my RAV4 in for service and they sent me home with a list of over $2,000 of stuff they said I needed done. I emailed the list to my home mechanic (he's licensed and teaches auto mechanics at a high school) who knows my vehicle and said that about $700 was important so that's what we did. I don't trust dealerships.

This is where I have zero trust for the dealership as well, it seems no matter what's being done they seem to find an additional $200-$250 worth of work that "we can take care of today..." on every visit.

But after being told on one visit that our timing belt was at the end of it's life, and then being told on the next visit it looked fine... well I have a hard time trusting the dealership on the actual condition of my particular car.

[Fuzz]

Don't mess with a timing belt. Go by the km on it, not how someone tells you it looks. If the book tells you to change it at 115,000 km, change it then or before.

[BigNumbers]

Originally Posted by Fuzz

Don't mess with a timing belt. Go by the km on it, not how someone tells you it looks. If the book tells you to change it at 115,000 km, change it then or before.

Especially if you have an interference engine - A snapped T-belt will grenade your entire engine... Timing belts, especially in Canada, should be changed at or before the manufacturer's suggested time or distance rating.... One of the few things I'd get done pro-actively vs. Dealer-recommendations.

[Fuzz]

And on some engines, do the water pump at the same time if it is only accessible with the belt off. It will save you a big bill later, and shouldn't add that much to the total.

[White Out 403]

only reason i asked about the scheduled maintenance was i get 10 years of free oil changes if i do all of it at one dealership with a loyalty program. i figured i was getting soaked but the dealer must get nice incentives to do the work i guess

[Ironhorse]

Originally Posted by Resurrection

only reason i asked about the scheduled maintenance was i get 10 years of free oil changes if i do all of it at one dealership with a loyalty program. i figured i was getting soaked but the dealer must get nice incentives to do the work i guess

They hope that you either sell the car before the 10 years is up (program is non transferable) or move out of the area, making it very inconvenient to go back to that dealer.

[GGG]

Oil changes are virtually free to the dealer. Might be $20 in costs. Just you doing the regular maintenance their easily pays for the costs of the oil change. They don't need to soak you on anything

[btimbit]

Just go by the manufacturers service schedule, not the dealers. Comparing the one in your manual and the one on a dealer website can be pretty funny sometimes. Really, I should replace my tranny fluid once a year? lol, yeah right

[Calgary14]

My closest Toyota dealer offers free oil changes for life but in order to get that you have to change the engine and cabin air filters according to their schedule. They charge $59 each for these, I just picked some up on eBay for $7 each