Used car margins at dealers

[headhunt3r]

I've talked to a few dealers recently and gotten as far a negotiations, but all of them seem to claim that their margins on used cars isn't like what it was before, and they have just $100's and not $1000's of room to negotiate. This was on cars that were listed at ~$30k. Is there any truth to this? I'm noticing a trend that dealers claim to have "haggle free prices", and my gut tells me it's just crap to keep people from making offers.

Has anyone recently negotiated used car prices from a dealer? How did it go?

[trollface]

YUUUUUUUUUUUUUGE.

No one is negotiating because demand for used cars is ATH.

Trade-in used cars, financing, warranties.

[headhunt3r]

This is how my most recent negotiation went. Test drove the car, went back the next day after some math at home and some thoughts. $30k car, with a high $700 doc fee that's been on their lot for ~5 months. They wouldn't budget even a few hundred to kick things off, and then lowballed me on my trade in. I called them out on double dipping with low value trade in's and high value used cars (nicely). Ended with no deal, then within a week they dropped it by another $500 advertised price. Why not budge that $500 when we're at the table? The car ended up selling a week later.

[320icar]

Only experience I have was my focus ST. Traded in for 19k. It was listed for 25k but sold for I think 21.

A real dealership probably has more wiggle room. I don’t doubt that a small side lot dealer runs much smaller tolerances

[whitev70r]

I bought a used car from dealer, listed a little over $10K, easily negotiated $2000 off. But that was about 4 years ago. From then on, I mentally take off $2K on any used car price on a reputable lot. Just know that dealer probably low balled guy who traded it in or bought at a really low price at auction. I'm all for salesperson making a reasonable amount of money to put bread on the table for their family but not a gazillion off me. Research what trade in price is, add what you think is reasonable to do inspection, oil change, detailed, etc. and then be ready to walk away if they don't blink.

[toyota86]

Dealers hunt for used cars like regular people on craigslist, facebook, bat, and the rest. In addition, they have access to other dealership networks, auctions, wholesale connections, etc. A dealer is no different than a curber. Dealers just operate on a much bigger scale and with more resources in play. There is no obligation for the dealer to disclose their actual costs and margins to you. Do your own research. If you believe you are getting a deal, that's all it matters. Finding out too much what happens behind the scenes may upset you.

[jpark]

^couldnt have said it better

[punkwax]

^ this. Dealerships have too much power. I can’t find a decent, relatively new, used truck right now because they’re buying them all and shipping them down south for profit. Then they pressure you to buy new while offering a garbage trade in value.

Because they can flip for profit all the pricing for used is currently ridiculous as well. Yes, they also use that as ammo for you to buy new instead.

I guess I cant really blame them for taking advantage of a loophole but I’m also sucking my thumb because it’s total BS lol

[bcedhk]

I think nowadays you'll be already happy to negotiate out the documentation fee.

[underscore]

Dealers are also the reason we have to pay taxes on used vehicles.

Look up the price for the car on VMR. Generally speaking I believe they'll buy a car for below the wholesale price and list it above the retail price.

[dorian]

Everyone always thinks that used car dealers are making a killing. No one ever thinks of the overhead they have so they can keep the business running. Any lot that is half decent is getting close to $10.000 now. Factor in dealer plates, mechanics, detailing, advertising etc. Buying a good clean car for the right price ?? Those days are gone, anyone can open up clist and see what their car is going for and demand retail $$$ for it. Good luck buying wholesale from new car dealerships when you are in a bidding war with 15 other used car dealers. Someone will always overpay to get the car. Auctions are even worse. Cars sell over retail price on Eblock and other online auctions. New car dealers started keeping and retailing their trade ins no matter how old they are or what brand it is. Once you finally get the customer through the door, $2000 discount is something that everyone expects but they wont overlook a small scratch on a $5000 car and will demand extra discount. God forbid their bulb burns out in a month, here they come wanting everything fixed. Anyways i just felt like ranting for a bit, feel free to ignore me

[JDMDreams]

^^ well used car dealers usually do say they have some 90 warranty etc on the ad. I do feel bad for the people that buy an used car at the dealer. $700 to fill a transfer form? Full 12% tax on full retail price + they get gouged on the interest rates. I often see 5 - 10%+ loans and they are often underwater by the time they sign the paper. On their 2015 Dodge journey that will cost them $40000

[sonick]

I bought a used car from a dealer for the first time a few months ago, and was quite happy with the experience.

They did a full on detail and inspection before delivery, and replaced a few suspension components that were worn. Would've been about $1k of parts and labour but they did it all before delivery.

Along with the insurance onsite, worth the haggle free experience and convenience especially there's no tax savings nowadays going private vs dealer for used cars.

Price paid would've likely been the same as buying private for the car I got (RAV4 V6 limited)

[twitchyzero]

only if you write full value on the transfer form

[dorian]

Originally Posted by JDMDreams

^^ well used car dealers usually do say they have some 90 warranty etc on the ad. I do feel bad for the people that buy an used car at the dealer. $700 to fill a transfer form? Full 12% tax on full retail price + they get gouged on the interest rates. I often see 5 - 10%+ loans and they are often underwater by the time they sign the paper. On their 2015 Dodge journey that will cost them $40000

By law a dealer must provide a warranty, usually its a 90 day warranty and it costs the dealer $100-150. $700 for a doc fee is a ripoff in my opinion. Doc fee is not a fee for filling out a transfer form. Its to cover some of the costs of detailing, warranties, mechanical work etc. My doc fee is $250 and i dont even remember the last time i charged a doc fee on a car. We waive it every time. There are ZERO rules when it comes to doc fees and that is VSAs fault for not implementing something there . The people who agree on 15-30% loans are obviously braindead and have no money and NEED to drive a $30.000+ vehicle.

[68style]

We're car people so we don't understand buying from dealers much for the most part... but an average person doesn't understand buying private and thinks it's super risky... they exist because most of the population isn't like us.

[whitev70r]

^ not true, some of us here on RS buy used from dealers. Like above poster said, they fix it up, detailed, engine Bay is clean, worn parts replaced. Sometimes it's worth your time to buy a car that's brought up to snuff instead of buying something $1000 less and having to do it yourself.

[trollface]

Originally Posted by dorian

By law a dealer must provide a warranty, usually its a 90 day warranty and it costs the dealer $100-150. $700 for a doc fee is a ripoff in my opinion. Doc fee is not a fee for filling out a transfer form. Its to cover some of the costs of detailing, warranties, mechanical work etc. My doc fee is $250 and i dont even remember the last time i charged a doc fee on a car. We waive it every time. There are ZERO rules when it comes to doc fees and that is VSAs fault for not implementing something there . The people who agree on 15-30% loans are obviously braindead and have no money and NEED to drive a $30.000+ vehicle.

I was told by someone that works in this industry that DOC fees are all profit for the back office, the sales guy gets none of it. So when a sales guy waves it, he's taking it out of his own pocket. They're just moving numbers around.

[JDMDreams]

I don't see how reconditioning an used car should be labeled as document fees. That should be part of the asking price. As it's the cost of revenue. That's like a restaurant charging you extra to cook your food.

[trollface]

Originally Posted by JDMDreams

I don't see how reconditioning an used car should be labeled as document fees. That should be part of the asking price. As it's the cost of revenue. That's like a restaurant charging you extra to cook your food.

They label it whatever they want to make the pill easier for you to swallow. Explaining to a customer it's all profit or we change you $700 to sign a piece of paper doesn't go over too well as opposed to "We spent 1k to do maintenance, safety inspection, to clean it up for you".

It's all head fuck games. They have the margins they need to make, just moving numbers to different buckets and labelling it differently.

It's just sales.

[whitev70r]

At a dealer, I just say .. my offer, $X,000 plus tax. My offer includes doc fee or whatever the hell they call it or label it. Like I said, I think they should make a reasonable amount to put bread on the table, I'm not anti-profit but I offer what I think is reasonable and be willing to walk away.

[RiceIntegraRS]

I bought my truck at a used car dealership in the summer. I was pleasantly surprised with the service there, he threw me the keys to go and test drive it on my own, didnt pressure me at all to buy. There was an engine code and he leant me his scanner to scan the code for me. He gave me his bottom price, waived the doc fees. Took it home the next day. Now the truck is worth almost double what i paid lol.

[68style]

Originally Posted by whitev70r

^ not true, some of us here on RS buy used from dealers. Like above poster said, they fix it up, detailed, engine Bay is clean, worn parts replaced. Sometimes it's worth your time to buy a car that's brought up to snuff instead of buying something $1000 less and having to do it yourself.

There's a reason I wrote "... for the most part"

[headhunt3r]

Seems like experiences vary wildly from dealer to dealer. I did do my homework, and do understand they have to make a profit. If they're paying top dollar at auctions because supply is low, then I guess that cost is just passed on to the customers, which sounds fair. My experience was just odd enough to make me start this thread - not budging on price at all when I was at the table, and then dropped it by $500 within a few days after.

I'm not shy about buying used privately, but there seems to be limited supply of those as well. Back to the shitty hassle of buying a used car then.

[punkwax]

Originally Posted by RiceIntegraRS

Now the truck is worth almost double what i paid lol.

Congrats but this shouldn’t be happening to consumers in the used market unless your vehicle is ultra rare/desirable.