Trade in rort?

[axe]

Hi all,

What sort of price difference should I expect on a trade in at a dealer when buying a new car.

The offer is looking to be really low for what the trade is especially when looking at used cars and gumtree prices. What costs does the dealer need to recoup on the car and is it better to try and sell it privately?

Cheers

[Dalonian]

It really depends on the car, some times you can be surprised though. I was offered $10 000 for my 2007 BF mkII XT with 100000 km on it in 2012. I took it because I wasn't confident I would be able to sell it for that privately when I knew it needed a windscreen and was a few weeks away from being out of rego.

[furiousgibbon]

you will always be able to get better money selling privately. Trade in is a convenience thing. A lot of people can't be bothered or aren't confident to sell their car privately. Worst case you should expect at least 10% more than a good trade in offer in a private sale. Best case probably 30% more.

Basically, if you have the time and effort, sell privately.

[axe]

We're talking somewhere around 11k for a 2010 XR6T with 115k on the clock. On various websites private sellers are asking 19-20k for similar vehicles and dealers are asking over 20k.

Just seems like a fairly big price difference. There's probably about $12-1300 of repair work to get it ready for sale (paint scratches and a minor dent). I know a dealer needs to make money on it but a ~8k difference seems pretty big.

[Ross 1]

There is also the consideration as to whether they are going to try and sell it in their yard or not. If it is not a car they are going to sell they can only get the wholesale price back when they move it on. If they are going to sell they need to factor in work needed, profit and keeping monies aside for potential warranty claims. As already said, if you have the time sell it privately and then take the cash in to get a better deal. Money talks.

[98TLS]

Originally Posted by axe

We're talking somewhere around 11k for a 2010 XR6T with 115k on the clock. On various websites private sellers are asking 19-20k for similar vehicles and dealers are asking over 20k.

Just seems like a fairly big price difference. There's probably about $12-1300 of repair work to get it ready for sale (paint scratches and a minor dent). I know a dealer needs to make money on it but a ~8k difference seems pretty big.

Tis indeed big,back in the day 4k was considered a good profit on a second hand car,you had around 12% to play with in a new car in saying that big franchised dealers have lots of overheads ie big premises/lots of staff etc,fwiw the service and parts dept used to pretty much keep the place afloat.

[Vesper Martini]

Originally Posted by axe

We're talking somewhere around 11k for a 2010 XR6T with 115k on the clock. On various websites private sellers are asking 19-20k for similar vehicles and dealers are asking over 20k.

The Dealer will also consider, will the car sell? they don't want something on the lot for 12 months, and eventually slashing the price to get rid of it.

Those Private sellers asking Dealer prices not selling either...

saying that the cars worth about 20K on the lot, I would have thought they could offer you 15K

[JAJH]

The trade in price is irrelevant, it's the change over figure you need to focus on. Eg: you want $10k for your car, the dealer wants 20k, so the change over is 10k. You need to decide what changeover figure you are comfortable with. But consider this, you only get one bite at the cherry, the dealer gets two...he will make money on your car and on the one he is selling.

[axe]

What is the best place to advertise a car these days?

[Jess1992]

Originally Posted by axe

What is the best place to advertise a car these days?

Not sure if serious, but Internet

[axe]

Originally Posted by Jess1992

Not sure if serious, but Internet

Was more asking which particular website was worthwhile.

[Jess1992]

Originally Posted by axe

Was more asking which particular website was worthwhile.

Fair enough I have used car sales and been able to sell 2 cars on that so you might have some luck there. It's about $60 an add from memory. Good luck

[JAJH]

Originally Posted by axe

Was more asking which particular website was worthwhile.

I have bought and sold a bunch of cars and in my opinion CarSales is probably the best way to go. It will cost you about $90 for an ad and you can post a heap of pics. They will also send you a large For Sale sticker you can put on your window which helps. The most important tip I can offer is take plenty of good quality photos, inside, outside, under the bonnet and make sure the car is immaculate. Price it according to the market, even on the high see but your ad will need to stand out to attract a higher price. One thing I never, ever do is negotiate a price (ie; "what's your lowest price") even before a buyer has seen the car. Once a potential buyer comes to view it you know he is at least half serious about buying. Hold your ground and play the game.

[Blue Shadow]

Originally Posted by JAJH

The trade in price is irrelevant, it's the change over figure you need to focus on. Eg: you want $10k for your car, the dealer wants 20k, so the change over is 10k. You need to decide what changeover figure you are comfortable with. But consider this, you only get one bite at the cherry, the dealer gets two...he will make money on your car and on the one he is selling.

Spot on

[2011G6E]

And whatever you do don't let him know how much you really really like it...act like you're on Prozac or something...

[Rodp]

I agree on changeover above (except when the dealer seems to low ball on your trade price and won't budge on the sticker price - 2014 XR8 with 10k on the clock priced as new) as that's the position I appear to be in at the moment.

As an example, while he didn't break it down, a dealer explain to me while I was trying to trade my car that an advertised vehicle on carsales going for 41k, with a few taps on his calculator, he would have to purchase at 28k for him to put it on his yard.

Depending on your vehicle, you could probably sell it for more privately. I can't do my job without a car and I work wonky hours and I also appreciate the convenience. I also claim my car on tax so it's not as big a deal for me if I get a little lower trade in value if I can also knock a few thou off the price of the vehicle I'm looking to buy.

If the dealer you're looking to buy from is flexible on the price of the vehicle you want to buy, workout what your comfortable as a changeover price and negotiate on that.

[98TLS]

A lot to depends on what price the dealer paid for the car your looking at,if he stole it (figure of speech) he has plenty of room to move ie can lower his profit on that car as to give you more for your trade in vehicle.No idea if things are still the same these days but back when i was selling Toyota/Ford the sales year went in 1/4s...best time to buy a new car was approaching the end of a quarter specially if sales figures were down ie ive seen new Toyotas sold at a loss just to have another "unit" out the door and fact was Toyota made up the difference anyway in a form of rebate.Selling privately has to be better gain.

[mechanic]

If you can make more by a private sale, do that.
Couple of points, how long are you prepared to wait to sell it privately?
What do you do when the buyer starts to haggle and there's nobody else waiting to buy your car?
Don't know if it's just me but the used car market looks awfully tough at the moment.

[4vxc]

Problem is it's going to be tough selling that car in Gosford, I know from experience. Forget Gumtree, only good for real cheapies.
Put it on Carsales and wait, park it somewhere highly visible and cross your fingers, keep it immaculate all the time it will sell eventually.
What are you getting next?

[axe]

Originally Posted by 4vxc

Problem is it's going to be tough selling that car in Gosford, I know from experience. Forget Gumtree, only good for real cheapies.
Put it on Carsales and wait, park it somewhere highly visible and cross your fingers, keep it immaculate all the time it will sell eventually.
What are you getting next?

Sprint, so as you can imagine not much wiggle room re: price etc. Can't exactly walk away and go somewhere else.

[4vxc]

Originally Posted by axe

Sprint, so as you can imagine not much wiggle room re: price etc. Can't exactly walk away and go somewhere else.

Could always try BradGarlick at Top Ryde if the 2 locals aren't doing the deal you want. I've found them pretty decent
Nice choice by the way

[Rodp]

Originally Posted by axe

Sprint, so as you can imagine not much wiggle room re: price etc. Can't exactly walk away and go somewhere else.

Given the exclusivity of the Sprint and the very quick take up, you're almost at the mercy of the dealer. It's tough to negotiate on a limited and desirable car if you're walking in with a trade as they're unlikely to budge much off the sticker price.

[MercurySilver]

Like JAJH says it all comes down to change over price
Its all we focused on when trading in the ba xr8 ute for the g6et
We were happy with it after haggling too and fro so took the deal.
Youve been given a rough ball park figure from a dealer so now haggle haggle

[buggo]

I had an '09 XR6T which I sold to a dealer in Sydney almost a year ago for $17.5k. Similar to yours I imagine with about 105k km, auto, needed a bumper respray. I had it on Carsales for $19.5k hoping to get rid of it quick, a few guys came to look but no luck. Had a call off a dealer, offered the price over the phone and it was theirs that weekend. They had it up a week later for $27k with stripes and GT wheels, was gone 2 weeks later.

Point is, I'm sure there's a dealer out there that will give you more than $11k.

[adrianb]

I'm not convinced on the above approach to only worry about changeover - this is a common dealer tactic to deviate the conversation from trade-in value and new car price. Instead of thinking about the price of your old car & new car, just think about this number in the middle.

To my mind, you want to negotiate the best trade-in value for your car and also the best price for your new car independently. Once you've got a best-offer on both of those by shopping around and some haggling then focus on improving your position.

The dealer will want to make money on the new car sale and the sale of your trade-in (whether they sell it themselves or sell it as wholesale) - they won't take a profit below what they're after on either of them.

If you can sell your old car privately then you'll be very likely to come out ahead financially but at the expense of convenience and having to do things like RWC yourself.

[Blue Shadow]

Originally Posted by adrianb

I'm not convinced on the above approach to only worry about changeover - this is a common dealer tactic to deviate the conversation from trade-in value and new car price. Instead of thinking about the price of your old car & new car, just think about this number in the middle.

To my mind, you want to negotiate the best trade-in value for your car and also the best price for your new car independently. Once you've got a best-offer on both of those by shopping around and some haggling then focus on improving your position.

The dealer will want to make money on the new car sale and the sale of your trade-in (whether they sell it themselves or sell it as wholesale) - they won't take a profit below what they're after on either of them.

If you can sell your old car privately then you'll be very likely to come out ahead financially but at the expense of convenience and having to do things like RWC yourself.

I agree, there is also to many variables when buying new cars, the dealer may have factory rebates on some cars, they maybe on target to get a VB (volume bonus). So you dont really know whats really at stake for the dealer. Also i reckon most people think that their particular car is worth more than it really is, because it has a 2k head unit in it and such, the dealer doesn't give a toss about that its worth 0 to them. So yep change over or finance $$ per month x anount of months. The F & I will make more money from you than the salesman.

[Smoke Pursuit]

11k seems low but some cars bear more risk then others. If your car is badly presented they will low ball it.

Don't forget they have to add GST and Stamp duty when they sell it, plus offer a stat warranty and RWC.

[Dr Terry]

Originally Posted by Smoke Pursuit

Don't forget they have to add GST and Stamp duty when they sell it, plus offer a stat warranty and RWC.

Not quite correct !

The dealer does not pay any stamp duty, the private buyer pays this when he transfers it into his name, after purchase.

GST only applies to the margin not the whole figure. In other words, if the dealer buys (trades) a car for say $10,000 then later sells it for $15,000, his GST liability is on the $5,000 profit, i.e. $500 (Not the full $1,500).

The margin covers, as you say, RWC, warranty, any-refurbishing costs, labour & overheads.

Dr Terry

[RANGEREST]

Originally Posted by Dr Terry

Not quite correct !

The dealer does not pay any stamp duty, the private buyer pays this when he transfers it into his name, after purchase.

GST only applies to the margin not the whole figure. In other words, if the dealer buys (trades) a car for say $10,000 then later sells it for $15,000, his GST liability is on the $5,000 profit, i.e. $500 (Not the full $1,500).

The margin covers, as you say, RWC, warranty, any-refurbishing costs, labour & overheads.
Dr Terry

Dealers sell cars "drive away" so all stamp duty etc is included in the sale price,
The buyer does pay it ,but if anyone is quoted drive away pricing it means, all costs incusive.

[Dr Terry]

Originally Posted by RANGEREST

Dealers sell cars "drive away" so all stamp duty etc is included in the sale price,
The buyer does pay it ,but if anyone is quoted drive away pricing it means, all costs incusive.

Drive Away pricing is different & usually only applies to new cars.

As you can see from my example I was talking generally about the used car trade. New laws force new car dealers include all on-roads (including rego & 3rd parts insurance) as part of the quoted price.

This generally applies only to new car advertising.

Dr Terry