Thread: This dealer must be dreaming

I paid $4500 for my 1993, I think I over-paid

not only is he dreaming it must be one of those "in a white padded cell, with a nice white jacket and heavily medicated" type dreams.

1993 V8 with 121,396km in 15 years. That's less than 10,000km per anum! Must include the cost of a new odometer in the price

He is not dreaming. He is waiting for a wood duck. Said wood duck will have a real dog trade-in on which he still owes more than its value, and he also has a bad finance history. Dealer will stitch him up by overtrading his dog, and jacking him into a refinanced loan agreement on which the dealer will receive commission from the lender and the insurer, sell the trade to a wrecker for $1000 or send it to auction. He bought the Disco at auction for $4000,wants to make $2k on it giving him $6k to overtrade and touch up the finance package. So his $1000 dog is traded for $7k,the dealer gets $12k minus the payout from the finance deal plus kickback, sells the dog for $1000. His cost $4k plus some refurbishment and commission to the sales rep. Not bad for a days work. This is the way the industry works. Wood duck could have gone to the auctions himself and bought the Disco, but, he does not have $4k, in most cases not even $400, and has a $1000 car on which he still owes far more than this. Wood duck can't afford to repair it and can't afford the payout so he has to keep buying jacked up finance deals if he wants/needs a car to drive. This is the automotive food chain and this is why bomb dealers make more money than most other types of dealer.

The price reflects the horsepower of the 3900 liter engine.

Originally Posted by Brian Hjelm

He is not dreaming. He is waiting for a wood duck. Said wood duck will have a real dog trade-in on which he still owes more than its value, and he also has a bad finance history. Dealer will stitch him up by overtrading his dog, and jacking him into a refinanced loan agreement on which the dealer will receive commission from the lender and the insurer, sell the trade to a wrecker for $1000 or send it to auction. He bought the Disco at auction for $4000,wants to make $2k on it giving him $6k to overtrade and touch up the finance package. So his $1000 dog is traded for $7k,the dealer gets $12k minus the payout from the finance deal plus kickback, sells the dog for $1000. His cost $4k plus some refurbishment and commission to the sales rep. Not bad for a days work. This is the way the industry works. Wood duck could have gone to the auctions himself and bought the Disco, but, he does not have $4k, in most cases not even $400, and has a $1000 car on which he still owes far more than this. Wood duck can't afford to repair it and can't afford the payout so he has to keep buying jacked up finance deals if he wants/needs a car to drive. This is the automotive food chain and this is why bomb dealers make more money than most other types of dealer.

A neat explanation of the process Brian, slightly scary for those of us who 'came down in the last shower' when it comes to buying from dealers. When I'm looking through eBay I find it really annoying to be going through a page of ads for a particular model, to get an idea of market value, and suddenly find the prices have nearly doubled - check on the right hand side and it says "Classified Ad" which almost always comes from a dealer.

Originally Posted by dm_td5

1993 V8 with 121,396km in 15 years. That's less than 10,000km per anum! Must include the cost of a new odometer in the price

Maybe not. My wife bought a Ford Escort in 1972 which she still owns. It has a genuine 112,000 miles in 36 years next month. Until it was written off in 2004, my 1972 Torana LJ had 130,000 genuine miles. In my car dealer days we did come across one owner cars with remarkably low mileage from time to time. There was a back yarder at Carina who specialised in buying and selling these. He had well developed sources and did acquire some lovely old cars. I remember a Valiant VC Regal with only 28000 miles on it about 1990. Even smelt like new.

While not contesting Brian's explanation, which is quite accurate, it should be pointed out that there are a few points (slightly) justifying the dealer charging more. He has to give some sort of a guarantee (which may be worth little, but even so has some cost to him), and he is responsible for the title of the vehicle, which carries some risk for him, and unlike the private seller, it is likely that the buyer will have some recourse against him.

But basically, as Brian points out, he is selling that car for that price (although as Brian points out, it has room in it for an inflated trade-in price, which you may be able to bargain out of him if you don't have a trade-in), because he can. If it is stuck there not selling, long enough, he may drop the price, but if he is a competent dealer, he will have made a fairly good guess in the first place as to what he can sell it for.

John