I went to buy a used Lexus one year old low mileage. The dealer wanted 39,500. They would not come off that number. I went back 3 times. Two weeks later I bought the exact car ( same vin etc) at auto auction through a broker for $28000. I took the car back to the dealer. I said in a nice way “what are you a bunch of idiots “ you wouldn’t sell me the car for $37,000. I buy it for $28,000.
Interesting. Went to dealer once back in 2009. Took about 5 hours to get the deal done on a 4 year old used car. Vowed to never bother with them again.
I recently had a offer from a dealer to buy my pickup for $34k. They had almost the identical used truck for sale on their lot for $43. I think they try to make way more than this guy is claiming!
Did you sell it to them? Cause if you didn’t sell it to them for 34K then they didn’t make the margin. They just tried. But it’s all about scarcity, if your truck is sought after, right packages, color combo, etc. Then they should pay all the $$$ but if it’s not. And it just seems like the identical truck, chances are yours wasn’t going to be priced the same.
I ended up selling it for $40K. Buying or selling a car at a dealership is a joke. I forgot to mention, they were the ones that reached out to me when they saw my ad on FB. They claimed they would buy my truck at my listing price and convinced me to drive two hours to their dealer ship, it was just a lie to get me in the door.
Koocanusa Hunter that sucks man, I’m sorry they did that. That’s not how you should do business. I buy cars off the street all the time because the auction is a pain. I’d rather pay up for customer cars because I can see them and talk to the owner, the auction is a gamble. Anyway, apologize again that they did that.
No not really. It all really depends on scarcity, so if I buy an ex rental car, I price it at cost or around cost after shop. I’ve already accepted that car is not going to be a winner, but I don’t care because I can go replace it as soon as it sells. If I buy a car at auction I mark it up $500-1500 first 30 days because again, easy car to replace. If it is a trade, and it’s scarce, I mark it up to what it’s worth, regardless of what I paid for it. Because, well, that’s what’s it’s worth. If I took in an 01 Tacoma 4wd with 60K original miles, I can’t go replicate that buy anywhere. So I ask full retail, but remember I also paid up for it because that consumer usually knows what they have and they deserve to get as much as possible. Anyways, there’s your answer some dealerships may differ, but that’s how I do it, and that’s how I train other GM’s on how to do it.
Billy Johnson Oh my mistake, I thought you said they mark them up as much as they can. Anyways, if you don’t count hold back, stair step, QGP, bi-annual, etc. Sure, we make more on used, but, really depends on the store. As a sweeping generalization, no. Especially after injection $$$.
👍 Spot on. I have sold numerous personal cars to Carmax. Out of curiosity I tracked the price and time to sell. On average the markup was about $2500 and it didn't seem to matter if it was a MB, BMW, Audi etc.
After shop that’s about $500-$1500 mark up. Also, Carfax does not pay up for cars. It’s just convenience, I literally did a bring your car max offer to our store and we beat by at least $500 and we averaged $1300 more. They’re advertising that they’re changing how it’s done looking out for the customer, etc. Is genius, 100% BS, but genius. Kind of like Tesla. Anyways, got side tracked. Sorry.
Totally agree. I've been pricing certain used cars ; Dodge Chargers and Challengers that were two years old and found Carmax to be $2000 to $3000 higher than those at Dodge dealerships and at the independent used car lots.
Everybody should watch these videos to become more educated in order feel less pressure to decide upon and to make a well informed decision that you'll be less inclined to regret. Thank you sir for sharing your wisdom and learned experiences.
When job hunting in the 90s I applied for a sales position at Saturn used cars the guy asked me my shirt size and returned with five shirts.I said I would not lie to sell a car he said "we won't be needing these".Short career.
When I applied at Ford dealership in 2002 I told them I will not lie and they said that's good because if we ever catch you lying to customers you will be terminated immediately. No exceptions.
Had a retiree job picking up used cars at auction for a dealership that sold one of the major German brands. I could see some of the paperwork and it seemed that the cars were sold at %30 markup. IE : Auction 20k. Price on lot 30k.
Hubby found my used car on Craigslist from a small Independent dealer. There was no pressure from the dealer to buy the car. We checked the price independently and felt that it was a good price. We negotiated the price and then asked for a cash discount versus using a credit card.
The industry average reconditioning costs on a car are around $1500. Some more some less. At my store it’s $1800. 0 cars just get a wash and an oil change out of the numerous dealerships I’ve worked at or have colleagues at.
Chiafade now my purpose is to give you factual data. I have no control what you do with it. I’m at peace either way. I’ll continue to do what I do. Is educate people, and take care of customers.
@@honestcarguy8633 Most franchised dealers I deal with buy 1 yr old rental cars...I'm not talking about trade ins. Along those lines- very few dealers retail those in my area,with most of those going to auction. Once the dent guy and touch up get done they, may be out $ 300-$400 at the most. Which is covered by the lot fee. Of course they get stung every once in awhile, which may skew the average. Even then there are provisions where they can send those back to the auction they got them from. Now. if you are a "buy here pay here" that's a whole nutha game.
This just happened. I was going to sell my 2014 Audi S4 with about 56,000 miles. Every dealership was selling the same year around same mileage for on average for $26,000. I went to do a trade in and one dealership offered $16,500 and the other $18,000. So the mark up on my car of I agreed would have been $7,000 to $9,500 Yeah so they mark up the hell out of cars and then won't even budge a grand to make the deal.
Your numbers are more realistic from what little inside information I have, what I have seen lately for sale, not the 2,500.00 this guy is talking about.
Got a certified 2019 Mercedes GLC with 7,000 miles from an authorized dealer. Listed at 45,900. Haggled a lot, back and forth for about 2 weeks. Finally I paid 41,800. I believe they still made a pretty good profit. But it shows there is room for better. One thing though: there's more room to play that's an expensive car and a lot less if there is a budget car, say a compact such as a Golf or a Corolla
The "profit" isn't $2,500. If you sell a car for $2,500 over total cost in the car, the gross revenue will be $2,500. Out of that $2,500 the dealership has to pay the salesman, all the sales managers, the receptionist, the clean up people, the office workers, payroll taxes, insurance, interest on the floor plan, utilities, rent/mortgage on the building, advertising costs, supplies, the owner of the dealership, etc. After all is said and done the dealership might make around $1,000 to $1,500 profit selling a car with $2,500 mark up over total cost.
Untrue, we actually hate KBB and they make it incredibly difficult for us to execute loans based on ltv. They’re “lending values” are what they will loan on when we buy a used car, problem is most cars that go through the auction go over lending value. They’re not our friend they own the market. But, we do not own them. They own us if anything.
Crotch Banister you absolutely have a choice. I think nothing to plug and the fact that I don’t care if you believe me might be worth more than the name, but hey, what do I know, Crotch banister.
@@fattbiscuitt LOL the term "racist" no longer works. You SJW snowflakes have over used that word so much it has lost its meaning because you pathetic snowflakes accuse people of racism whenever you disagree with their opinion because you think it shuts them down. Keep it up it makes your generation less valid everyday. Your generation is like a comedy show that keeps on giving! LOLOLOL
@@fattbiscuitt Apparently you REALLY need to pay more attention when you read posts before criticizing the posters. No one made a comment about anyone with a "foreign" name.
That's frighteningly scary to think that dealerships are making that much on people. I get that they're a business but holy cow. I'll be extra shrew in negotiating for my next car haha, thank you!
Average if 2500 markup? That's less than 10% on many cars. If you think a 10% markup is ripping you off, don't look into the markup on literally everything else you buy...
I once asked a car dealer how much a car dealer earns. He replied, "It depends on whether or not the person is selling new cars or used cars. You make a lot more money selling used cars." I was shocked. I replied, "Really? I would think you would make more money selling a shiny brand-new car." He said, "No. New cars cost the dealer a certain amount of money and can only be sold for a certain amount due to competition from other dealers. The profit is limited. But a used car can be bought at a fairly lown price and sold for whatever the buyer is willing to spend. The margins are much much bigger for used cars."
Went to a dealer the other day. I felt the car was priced a little high. They wouldn't budge on price, wanted to charge $2000 more because I brought my own finance And wanted to charge me their $4000 package that's added to every car. Needless to say we walked out. My wife said the look on my face when the salesman came back is that I could have thrown him out the door. Watched a lot of videos from this channel and all of the BS tactics they tell you to beware they were pushing. Needless to say I've walked on 3 deals due to this. Its nice to be informed. Yes, I was very cordial and polite but said we won't have a deal. Thanks for the education you are helping a lot people.
in my experience car dealers of all types do not negotiate. they are more than happy to wait, then drop the price $200 to get some movement like it's a big deal. F them all
I look for good mileage, certain older models and longevity of those vehicle's. For instance in MD I found 2010 Jeep Grand Cherokee with 63k miles. Only 10 year's old. Hard to find. And no accidents and to owner's. For around 11k. Depending on your state you can find great cars. Like PA n Virginia have amazing jeep for sale with less mileage. Which taxes would have cost more to bring it to MD. This jeep will last me 8 year's if taken care of. Which it is. Dealer's need to make money to there a business. Just need to look long and hard n be patient.
Ray Lat is it fair to say that you are the one that was playing the game? If he was priced at cost or around cost, Is probably why he couldn’t come down. If it was a good deal just buy the car man. You don’t have to have a psychological win get a good deal. Use math, and logic. Quit using emotion.
So if they’re not negotiating there’s a reason. It’s always in our best interest to sell the car. Age is everything for sure so pay attention to that. But again, I price at cost or around cost and hope to get a trade to make it back. But I just want the volume, word of mouth business, etc. The problem with my pricing is customers are wired to think that if they don’t negotiate they didn’t get a good deal. But that’s not what makes a good deal, value is what makes a good deal. Do research and see what the market says a fair or good price is, if it’s at or under that. Buy the car, quit makin it harder than it has to be.
Last month I was ready to buy a used car that I know had been sitting on the lot since last October. I told the sales guy if he could take $500 off the price, I would buy it that day. He said no. I asked what his bottom line was and he told me it was the sticker price that had been on the car since last year lol. Well, with the mileage on the car, the amount of owners, etc., I knew I could do better. And yeah, the car is STILL sitting on that lot.
Some dealers won't budge, and Toyota dealers are one of the toughest. They know they sell a great vehicle. The biggest mistake is to shop or try and deal when we have the itch or fever to get a car. Shop when we don't really need a vehicle to badly
And why I avoid retail purchases of most everything -- cars especially. The world is full of people recently informed of the boat load of cash it's going to cost to fix their current in-acceptable-shape car. The amount scares them and they worry it's only going to require more serviced down the road. I swoop in with cash and take the troublesome ride off their hands. A few hours of work along with the expenditure on Internet parts and I'm in a nice ride for nickles-on-the-dollar. Ignorance is a booming business!
I remember when I bought my first car from my school chefs parents. I said "whdaya need from me?" and his pops said "I need about tree fiddy." So i gave him a dollar.
It is absolutely amazing that when you trade your car in say on a new vehicle and you check your vehicles average trade in value in the "book" the salesman at the dealer always grossly undervalues it below the average trade in even if it has low miles and is very clean, however when you go to buy a used vehicle the dealership always want to get a number far greater than average resale based on the "book"? My friend works at a large dealership and tells me they make a mint on decent trade ins that don't go to auction! Comments?
Another practice that often takes place is that is when you bring your car in as a trade in --- a dealer will bring out a Kelly Blue Book to tell you it's value because the KBB is very often lower than the NADA. And then of course, conversely, if you go to a buy a car -- they will bring out the NADA book -- knowing it's to their $$$ benefit to do so over the KBB.
Never use your vehicle as a trade in.Put it in your front yard with a sign on it. If it never sells give it to charity.Burn it.Anything is better than using it as a trade in.Anything!You will get x on your car and when you drive by it 3 weeks later it will be selling for 3x. Or auctioned off for 3x.You might as well walk in there with a sign on your head that says loser.
@@jamesfleming5849 not necessarily. I got more for my trade in than the sale price when I bought it 8 month earlier. I was lowballed by 4 different dealerships prior. Just depends.
@@scottnicholas2676 Absolutely true. I've called out a few salespeople over the years for trying to low ball my trade with KBB. The thing is most customers have no idea about what you said, they "trust" KBB and have no idea that dealerships actually price retail cars by the higher NADA. The games usually stop when I tell the sales punk that I worked in the car business for many years and know the tricks.
Back in the early 1990s I bought a Plain Jane 1990 Ford Ranger, 4 cylinder, stick shift, radio and rear bumper delete and it even had the stock hubcaps and tires on it!! It WAS a push button four wheel drive model, but frankly it was a simple "cheap" truck, when I got it off the lot for just under $9800 out the door (with tax and fees it ended up costing just over $10,000)!! Within six months I had a rear dual tube bumper I installed on it, a roll bar kit with five working KC Daylighters across the top of it, nerf bar (steps) and grab handles on both sides! I even went ahead and installed custom wheels, bigger tires, a tricked out stereo, a sliding rear window, vent shades to the door windows, a windshield visor, sun roof, a push bar on the front with two more daylighters, front tow hooks, a bug deflector, mud flaps (all for wheels) with matching floor mats AND a set of louvers on the rear window as well! I even had the headlight and tail light "dark out" covers and all the covers for the KC lights. The craziest thing happened though when I took it back to the dealership one day a few months later!! The sales guy came out as I was in the parts department walking around my truck with a clip board in his hand! And when I came back out to get in the truck he ran up to me, stopped me before I got in and said "I will give you a decent trade in figure RIGHT NOW, if you are looking to get rid of your truck!" I was curious and I said "Really how much would you give me for it?" and he let out a huge sigh like I was stealing money from him and he said "I will give you $10,000 the way it sits!"!!!! I looked at him and said "I paid that for the truck and you OBVIOUSLY need (and want) this truck more than I want to get rid of it, so you'd have to do way better than that!" AND FURTHER I told him "Besides I have more than that into it, so you'd have to at least make me a REAL deal to start with too!" It was then he looked back at the little truck, looked back at me and said "Would you take $16,000 for it?" I was surprised he offered to go that high, but I used to work as a mechanic at a dealership and to the sales guys the numbers literally mean NOTHING to them!! I DO have to admit I was surprised by his offer and yet I refused it still, the truck DID look amazing with everything I had done to it, and I am certain he'd been able to get close to $20,000 out of it the way it looked, all jack up and low miles on it! And has I reached for the door handle to climb in he further blew my mind with his next offer!! "Come on lets talk about this, I can give you a new Ford Fiesta and $6000 in cash today for it!" He countered his own offer! Again I hesitated, and look back at him!! Politely I thanked him as I again started to climb into my truck, and that is when he asked "What would it take?" as I got in sat down on the seat and stuffed the key into the ignition!! I looked at him through the open window and said "You do realize I am driving a truck don't you?" My point to this is, had he offered me another truck I might have considered it! But because he offered me a vehicle I would consider a "lesser value" and a "lesser car" I refused him again!! Two years later though my idiot wife (now ex wife) totaled the little truck destroying all my hard work I had done to it!!! But for a brief moment I knew that I could have made out of a $19,000 trade on a truck I had only paid $10,000 for!!!
If you DON’T have ALL the cash for the car you WANT don’t complain about price it watch videos trying to find out how to get a good deal. Either SAVE up or buy something within your budget or keep buying those bus tickets!
Why save up when car loans cost almost nothing right now? Go to the bank and get qualified before you step foot on a car lot. Just buy only as much car as you need, if any, and use that cash for other stuff, instead of a credit card. Cut those up in little pieces.
Well I know it’s now 2022 but I’m seeing dealerships offer 40/50% trade of what the cars are being priced at on the lots for sale when they recondition it. Offer max 10,000 yet the same vehicle will be priced 21,000/23,000
I followed every single car my family ever traded in and never did they reach lower than a 206% markup. As an adult, I will never use a dealership. If they really were only marking up a $2500 profit on cars I’d feel differently.
Exactly my point, those assholes are greedy and crooked. They easily mark up the trade-ins by $5K to $10K and act like they are at loss. Bloody, I sincerely wish they all go out of business and end up on the streets homeless, I have zero empathy for scammers.
Just remember, Kelley Blue book's parent company owns car dealerships, both new and used. This is pretty much the theme for all those appraisal websites. So, the prices you see on these sites is an illusion. People think this is the fair market value, but it's not. It's the market value based on what the parent company dictates to the subsidiary running the website. When you go there looking for a price on a car model you want to buy, just take it with a grain of salt. Everything is negotiable. especially during a pandemic.
Scott, Kelley Blue book is owned by Cox Automotive and they do not own car dealerships either new or used. They do however provide services for the auto industry but they are not in the retail automobile business. The market values are based on actual wholesale vehicle sales data and retail vehicle sales data. Just as a reminder the market value of anything is ultimately determined by what someone is willing to pay for it.
@@CarEdge - Look up Cox Enterprises or Manheim for example. Dealerships was a broad statement. I will concede that, but Cox owns just about every big automotive website. Within that umbrella you will find auto sales. it's not front page news, but if you dig, you'll find it. iMO Cox Enterprises/Automotive, and their subsidiaries have major control over setting prices.
Remember back in the day, they said on the windshield $500 down? They have 500 in it and they would sell it for twelve hundred or thousand they weren't out anyting then. They'd sell it on a payment plan on weekly installments! Then when they were late by a day or two and they would repossess it and sell it again they got rich on one old junker. I bet some of them are still doing the same thing today!
It’s a lot. Dealers make more on used cars. I went trough training with the biggest dealer in Phoenix, their pricing and sales tactics made me walk out. New cars went like this, sticker price on the car gets them to talk to a salesman, salesman adds on 3k, then finance adds on another couple grand plus inflated interest rates. They expect the customer to walk out, some take the bait, drop the price by 1500 for the ones that walk. They still expect some to walk on the lower offer, some take the bait, drop it again...etc. either way they plan on selling at just over sticker, which anyone knows is nuts, but they think they got a deal since that initial offer was so high. When I left the finance trainer told me I was crazy, said I’d make a killing since I didn’t look like a salesman and I could use my military service to sell. Good riddance. Their mascot makes tasty bbq, that is my hint to avoid this large dealership.
Not the norm, sounds like a bunch of slime balls. Surprised those dealerships can still survive in such a competitive market. Sorry you had that experience.
Fortunately the internet now has lots of sources that will provide what the retail price of a preowned vehicle should be, or at least a range of values based on mileage, condition, etc.
I never buy from a lot anymore. They bend you over the sink. I buy from individuals. I check it out, get a pre-purchase inspection so I know what it’s issues are, and then use that newly found knowledge to negotiate down. If we can’t make a deal, I walk away. Buying from a lot is a waste of money. But do your homework.
Just wondering - much do dealers mark up new cars? Talking the difference between the sticker price, and the charge from manufacturer to dealer plus transportation plus loan %?
Listen, I try to be objective with some of your videos. With all my heart I am not a troll. I am actually from the same metropolitan area that you are (I am old enough to remember Lustine Chevrolet in Hyattsville!) Dealers on a new car obviously want to make money on the front end and then they also make money on the buy back. Then they make a shitload of money on the financing if you let them. Major dealerships in many cases will not resell a car they take in trade on their lot because it is too late of a model or may have some issues. The markup on used cars is extraordinary. dealers always add on an extra thousand dollars above Black book value to their asking price on a used vehicle. There's certainly is lots of room for negotiation. I know because I used to buy trade ins (to late of models for them to achieve their profit margin) I was in cahoots with many sales managers. I knew what they had in the cars and I knew what they sold them for. I also know the American motorcycle industry. On a used Harley-Davidson the markup is 4K. The code on the rear view mirror /The year of the bike /what they have in it. The salesman then knows at a glance the year, what the dealer has in it plus 4k is a selling price. I have never ever in my life paid more than 27% less than MSRP on a new vehicle. I know better than to buy a used vehicle from a dealership! By what you say I am not sure that you have your client's best interest at heart. My instincts would tell me that you are double-dipping from both ends (profiting from both clients and the dealerships). there is no way you survived as a sales manager and selling vehicles for over 30 years and being completely aboveboard and honest. Again, I do not to mean to be a dick I am just telling it like it is!
Sideways rain, just because the managers that you have dealt with over time might not have had any morals doesn't mean that I don't. I represent my clients only. When dealerships ask me how much they want me to figure into the deal for me, I stop them in their tracks. The only money I make is from the client, I will not accept any money from any of the dealerships, period, end of sentence. By the way you are just telling it like you think it is and by doing that you are indeed being a dick. Stay safe, use a condom. Ray
You buy a new car, trade in the old one, you "get" 5 grand for your trade in. they get sold to wholesalers for 500 to 1000, or the employee s buy it for 500 to 1000, or a really nice one get a bath and for on the lot for 5 grand. Here's the rub , they gave you 0 $ dollars for your trade in. It's not the deal you get, it's the deal you think you get.
Dealers are not going to show you $5k trade in and put $0 in the car. They don't have $5k mark up on the car you're buying to be able to do that. But, yes, there are some dealers that will show you more for your trade than what they're actually giving you for the car. Any over allowance is just coming off any mark up they have based on the price they are selling you their car for.
Not as much as you think, they rely more on making profits on the financing and other add ons such as warranties and such, and thats why you shouldn’t tell them you want a cash price, usually better off to finance it and pay it off immediately.
Many used car dealers in Eastern Ontario will buy cars in Quebec and are getting away with not supplying an owners manual in English . The unexpecting customer will then have to pay $50. plus if they want one in English . This is a big injustice
The most i ever got trading a good running car in was 2k and they made it seem like that was a good deal and i bought another explorer 4 years newer with 40k less miles for 12k
Just went to a dealer the other day to look at a car. I was on the lot looking at it and the manager happened to come out and ask if I need help. He said the car I was looking just sold. I asked what they got it for? He looked and said $12,800. He told me it sold for asking price $18,000.
In defense of the car lots. They have overhead that dwarfs your overhead putting the car for sale in your front yard. They've taken the risk on that used car and many times don't realize the full reconditioning expense until they get knee deep into it. No customer is going to tell the dealer they need a new transmission on their trade, when they whisk your car away for 10 min while you are chatting with your salesman. Like most business they are entitled to make some profit. I'm not talking gouging profit. I'm probably going to get pounded for even remotely supporting the dealer. The poor guy selling that car may make a couple hundred bucks (at most). The owner gets their share, then advertising, payroll for the shuttle guy and the service tech, the person answering the phones, the overhead to keep a well stocked parts dept, Etc. For every car they flip quickly, they will have others that sit and there is an expense for that car to sit with insurance, lot fees, lot maintenance, etc. The good flips need to help float the klunkers. For every buyer who's happy they beat up a sales guy, there are others who are happy with a fair deal. They got a good reliable car, good financing, and the dealer made a few bucks to help their employees feed their families. Who goes to a restaurant see's a $30 steak dinner and then tries to negotiate the price? It doesn't happen. The owner sets the price on fair market value, overhead and profit for taking the risk in owning a business. This isn't saying there isn't wiggle room at an auto dealer, but there is a bottom number they can't cross. I've traded cars before, but its usually after I've gotten my money's worth, had it paid off, put $ in the bank and I didn't want the headache of selling it myself. I did my research and most times gotten fair trade values. Sure there are dealerships that are the stereotypical slimy car dealers, but most reputable dealers are moving cars is a fair manner. Man I'm gonna get roasted for this....ha!
I see major dealership reps ragging on Carmax and no haggle places for being overpriced, well, after your dealer fees and extra padding are factored in, your cars come out to be the same prices, if not thousands more than those places. I am car shopping right now and the regular scam dealers are making me want to just order a car offline, right to my door, .. like a pizza and never look there way again.
I have a car leased for 3 yrs, Im 2 yrs into that contract, I was considering paying the remaining year in one lump sum, can you tell me if this is a good idea? My concern is what would happen if the car got totalled in an accident, would i lose that money Ive paid?
Make sure you have GAP, or guaranteed asset insurance, or MEI, motor equity insurance. If your vehicle is totalled, then the comprehensive insurance may not cover (via the ASSESSORS VALUATION), the amount you still owe. I only know this because my corolla was totalled (not my fault, he ran a red light) and the assessor valued it below the finance payout. As luck would have it, I was sold the MEI policy when I purchased. The other thing to look for is; if you pay the comprehensive insurance by the month, then the insurer has the legal right to claim the rest of the premium for the remaining insurance term. The policy usually is a 12 month deal, so if you were 2 months into the policy, expect to have to pay the remaining 10 months money.
Well my friend went to his dealer where they were offering him 7k firm for a car he still owed 14k and was retailing in their lot for 12,995, you are a different breed this guys go for a minimum of 5k just on the car
So let’s break down that profit margin. There’s reconditioning if the vehicle( could be 1-2k per vehicle), fees from banks, commissions to pay. Car dealerships are a for profit business not a charity
Not sure if I’m getting scammed but I must ask before I make a purchase. I’m trying to buy a 2018 Mercedes CLA 250. The online ticketed price is $29k. When I got to the dealership and said I would pay cash he told me the price of the car is an additional $5k because they added some “premium package” to the vehicle plus with taxes and licensing it would run me another $4700. The cost of the car is almost 10k more than the ticketed price. Does this sound ok because it just didn’t sit right with me. I told the dealer I’d have to think about it. Is it normal that cars are priced at $10k more than the online ticketed price?
Well first and foremost.....you can't run from tax. Secondly why is your tax nearly 5K on a 30k Car? Continue not sitting right bc the whole thing is fishy. I'm not sure what package they added to the "used car" for 5K but whatever it is def ain't worth it.
Hi new subscriber. You said average markup is 2500. Is that on new or used? If used only, what is the markup on new cars? Also do dealers use a gross profit margin percentage like 9 or 10% and is that percentage different for new vs. used?
Average gross dealer profit is $2,500... And THAT’S why they can shove those “fees” where the sun don’t shine. Never pay ANYTHING but price, tax and title fees when buying a used car. All those other fees are ALREADY included in the sale price. This is precisely why you can go buy the same exact used vehicle from a private seller and the sale price is much less expensive. If you pay the stealership price AND THEN also pay all the “fees”, congratulations, you just got DP’ed.
I am a dealer I haven't made 2500$ on a car in years, you're very lucky to break 1000$ and after you take out all the expenses and overhead it's less than that. Dealers are not trying to "screw you over", they are just trying to make a living like everyone else
The dealer will screw you over if you let them. There’s a lot of bait and switch going on with pricing. A car listed at $16,995 will get jacked up hundreds or thousands when you call or visit. Reconditioning fees or dealer fees, accessory fees etc. The finance manager is the worst, he will take you from book value to thousands upside down in minutes if you don’t know what your doing. He sells backend bogus warranties, gap insurance, tire packages etc that is all crap. There are still some legit dealerships out there, but you have to search.
Because they assume that everyone is out to get them....wheres my 10 grand?....didnt think so...you can talk all that bs that you know nothing about when its on your phone
Look if you buy a New vehicle for 35k,you will lose 10k,with in the first two years. Miles on the vehicle is a plus. Trade in is ok but you will do better to drive it take care of it.a New truck will cost you 35 to 70k. Crazy. Trucks are the number one seller. 7 year loan Wake up that is stupid.
A used car is only worth low book if it's in good shape new tires no dents scratches no worn int So take low book value and add $500 that would be a fair deal New cars sticker less any rebates Byeing a new car yoo loose 5 grand as soon as you register it Saleing cars is a life sucking shity job I use to sale cars 😀
Hello a VW dealer has just listed a 2014 Toyota 4Runner I like, currently they are inflexible on price which I understand as its new on the lot, however I can wait. If no one buys it, how long a wait until they will give me around 10% off?
Roman Shukshin Alberta Canada, only 115k km (not miles) they just raised the price to by 500 to $28500 CAD. I see CarGuru has it as good deal at $1400 below market and 21 days listed... Id like to offer $25k and pay $26k that reasonable? Seems strange they would list a price they couldn’t bend on. Is CarGuru trustworthy?
when a dealer offers you 6500 for a pickup -and have one the same year and mileage and options on their lot for 19986.00 + taxes -you know the markup is more than a couple of grand. Thats why they take your keys for your trade -disappear -then use 2-3 levels of sales people to brow beat you into paying the huge difference they ask -and EVERY deal leaves the customer "upside down" -simply because of the dealers profit margin and depreciation. Buying a car at an auction and having a good trustworthy mechanic is by far the best option-buying a car at a dealership is probably the worst. 99.9% of the population would sooner get a root canal than deal with car sales people. Especially the recent "imports" -slick and good buddy guys--LOL -all readers know exactly who I mean -and hate them
You are correct. The markup ranges from 5000 to 7000. I know that for r a fact. There is a major markup in the car and truck industry. Today's used trucks are generally over the manufacturer's retail price for a new truck. Sometimes as much as 2 to 5 thousand dollars over!
Had a dealership today raise the amount of a down payment required after agreeing to a certain amount yesterday. Is that the norm? I was so pissed, I had only brought the agreed upon amount.
The mark up is $2500 on average, but on what? An old 1988 dodge or the 2017 model he mentioned. Furthermore, he doesn't tell us which models have this mark up. Is it a SUV or a sub compact? This video is useless in determining dealer markup
Wouldn't the amount the car dealer makes depend on the value of the car. I just bought a 95 Camry for 3,900. I can't see how the dealer made 2,500 on that.
Hey pal, I have a bridge in Brooklyn I want to sell you cheap. $3900 for a 1995 Toyota Camry Hmm? I'm sure all the salesmen still talk about that at the bar after work. LMAO.
I went to buy a used Lexus one year old low mileage. The dealer wanted 39,500. They would not come off that number. I went back 3 times. Two weeks later I bought the exact car ( same vin etc) at auto auction through a broker for $28000.
I took the car back to the dealer. I said in a nice way “what are you a bunch of idiots “ you wouldn’t sell me the car for $37,000. I buy it for $28,000.
what did they tell you?
Interesting. Went to dealer once back in 2009. Took about 5 hours to get the deal done on a 4 year old used car. Vowed to never bother with them again.
I recently had a offer from a dealer to buy my pickup for $34k. They had almost the identical used truck for sale on their lot for $43. I think they try to make way more than this guy is claiming!
Trucks have a bigger demand and are more profitable
Did you sell it to them? Cause if you didn’t sell it to them for 34K then they didn’t make the margin. They just tried. But it’s all about scarcity, if your truck is sought after, right packages, color combo, etc. Then they should pay all the $$$ but if it’s not. And it just seems like the identical truck, chances are yours wasn’t going to be priced the same.
I ended up selling it for $40K. Buying or selling a car at a dealership is a joke. I forgot to mention, they were the ones that reached out to me when they saw my ad on FB. They claimed they would buy my truck at my listing price and convinced me to drive two hours to their dealer ship, it was just a lie to get me in the door.
Koocanusa Hunter that sucks man, I’m sorry they did that. That’s not how you should do business. I buy cars off the street all the time because the auction is a pain. I’d rather pay up for customer cars because I can see them and talk to the owner, the auction is a gamble. Anyway, apologize again that they did that.
@@warren3665 wow they were some real 💩 heads for pulling a move like that! Glad that you didn't cave in!!
A two year old used car almost same price as new car at some car dearlership. Maybe $500 dollar difference in price .
It’s insane!
Who remembers the PennySaver? I do!
Yep. Remember before internet autotrader was a weekly magazine you got from news stands?
Good ol classifieds
they mark them up as much as they can. they make more on used cars then new ones.
No not really. It all really depends on scarcity, so if I buy an ex rental car, I price it at cost or around cost after shop. I’ve already accepted that car is not going to be a winner, but I don’t care because I can go replace it as soon as it sells. If I buy a car at auction I mark it up $500-1500 first 30 days because again, easy car to replace. If it is a trade, and it’s scarce, I mark it up to what it’s worth, regardless of what I paid for it. Because, well, that’s what’s it’s worth. If I took in an 01 Tacoma 4wd with 60K original miles, I can’t go replicate that buy anywhere. So I ask full retail, but remember I also paid up for it because that consumer usually knows what they have and they deserve to get as much as possible. Anyways, there’s your answer some dealerships may differ, but that’s how I do it, and that’s how I train other GM’s on how to do it.
I’m talking as a general rule. There’s more profit in used cars then new ones at a new car dealer.
Billy Johnson Oh my mistake, I thought you said they mark them up as much as they can. Anyways, if you don’t count hold back, stair step, QGP, bi-annual, etc. Sure, we make more on used, but, really depends on the store. As a sweeping generalization, no. Especially after injection $$$.
Crotch Banister you’re welcome, Crotch Banister.
👍 Spot on. I have sold numerous personal cars to Carmax. Out of curiosity I tracked the price and time to sell. On average the markup was about $2500 and it didn't seem to matter if it was a MB, BMW, Audi etc.
After shop that’s about $500-$1500 mark up. Also, Carfax does not pay up for cars. It’s just convenience, I literally did a bring your car max offer to our store and we beat by at least $500 and we averaged $1300 more. They’re advertising that they’re changing how it’s done looking out for the customer, etc. Is genius, 100% BS, but genius. Kind of like Tesla. Anyways, got side tracked. Sorry.
Totally agree. I've been pricing certain used cars ; Dodge Chargers and Challengers that were two years old and found Carmax to be $2000 to $3000 higher than those at Dodge dealerships and at the independent used car lots.
Everybody should watch these videos to become more educated in order feel less pressure to decide upon and to make a well informed decision that you'll be less inclined to regret. Thank you sir for sharing your wisdom and learned experiences.
In the UK it's about £1500 over the used car guide price for buying privately . You can fiddle around with part exchanges or a cash price.
When job hunting in the 90s I applied for a sales position at Saturn used cars the guy asked me my shirt size and returned with five shirts.I said I would not lie to sell a car he said "we won't be needing these".Short career.
When I applied at Ford dealership in 2002 I told them I will not lie and they said that's good because if we ever catch you lying to customers you will be terminated immediately. No exceptions.
Wow a 5 minute 12 second video and he never touched his drink now that's dedication and not 1 ice cube moved
Had a retiree job picking up used cars at auction for a dealership that sold one of the major German brands. I could see some of the paperwork and it seemed that the cars were sold at %30 markup. IE : Auction 20k. Price on lot 30k.
……that’s 50% markup
Sell your old car yourself, you will get much more for it than the dealers trade-in price offer.
Hubby found my used car on Craigslist from a small Independent dealer. There was no pressure from the dealer to buy the car. We checked the price independently and felt that it was a good price. We negotiated the price and then asked for a cash discount versus using a credit card.
Most of the times, its marked up with only an oil change and a wash.
The industry average reconditioning costs on a car are around $1500. Some more some less. At my store it’s $1800. 0 cars just get a wash and an oil change out of the numerous dealerships I’ve worked at or have colleagues at.
James Purcell fact checking James Purcell..... 100% accurate all though mine is $1500-2500
Chiafade now my purpose is to give you factual data. I have no control what you do with it. I’m at peace either way. I’ll continue to do what I do. Is educate people, and take care of customers.
The market determines the price. The end.
@@honestcarguy8633 Most franchised dealers I deal with buy 1 yr old rental cars...I'm not talking about trade ins. Along those lines- very few dealers retail those in my area,with most of those going to auction. Once the dent guy and touch up get done they, may be out $ 300-$400 at the most. Which is covered by the lot fee. Of course they get stung every once in awhile, which may skew the average. Even then there are provisions where they can send those back to the auction they got them from. Now. if you are a "buy here pay here" that's a whole nutha game.
It be awesome if you could do a follow up to this video with what is going on in today’s used market.
I'm not interested in buying a car. I don't even live in the US. But i like the way you explain things, so i give you a thumb up.
Khalil Ghannam eat shit !!
@@Yeumatoinhieu Why?
@@Yeumatoinhieu There must be some misunderstanding. I meant i give him a like. I actually speak french. and it means yeah it's good in french.
This just happened. I was going to sell my 2014 Audi S4 with about 56,000 miles. Every dealership was selling the same year around same mileage for on average for $26,000. I went to do a trade in and one dealership offered $16,500 and the other $18,000. So the mark up on my car of I agreed would have been $7,000 to $9,500 Yeah so they mark up the hell out of cars and then won't even budge a grand to make the deal.
Your car isn't worth much...bad history on engines
Your numbers are more realistic from what little inside information I have, what I have seen lately for sale, not the 2,500.00 this guy is talking about.
Got a certified 2019 Mercedes GLC with 7,000 miles from an authorized dealer. Listed at 45,900. Haggled a lot, back and forth for about 2 weeks. Finally I paid 41,800. I believe they still made a pretty good profit. But it shows there is room for better.
One thing though: there's more room to play that's an expensive car and a lot less if there is a budget car, say a compact such as a Golf or a Corolla
The "profit" isn't $2,500. If you sell a car for $2,500 over total cost in the car, the gross revenue will be $2,500. Out of that $2,500 the dealership has to pay the salesman, all the sales managers, the receptionist, the clean up people, the office workers, payroll taxes, insurance, interest on the floor plan, utilities, rent/mortgage on the building, advertising costs, supplies, the owner of the dealership, etc. After all is said and done the dealership might make around $1,000 to $1,500 profit selling a car with $2,500 mark up over total cost.
The Kelly blue book is owned by the auto industry.
Untrue, we actually hate KBB and they make it incredibly difficult for us to execute loans based on ltv. They’re “lending values” are what they will loan on when we buy a used car, problem is most cars that go through the auction go over lending value. They’re not our friend they own the market. But, we do not own them. They own us if anything.
Crotch Banister you absolutely have a choice. I think nothing to plug and the fact that I don’t care if you believe me might be worth more than the name, but hey, what do I know, Crotch banister.
Yes and allot of people don't kmow that
@@fattbiscuitt LOL the term "racist" no longer works. You SJW snowflakes have over used that word so much it has lost its meaning because you pathetic snowflakes accuse people of racism whenever you disagree with their opinion because you think it shuts them down. Keep it up it makes your generation less valid everyday. Your generation is like a comedy show that keeps on giving! LOLOLOL
@@fattbiscuitt Apparently you REALLY need to pay more attention when you read posts before criticizing the posters. No one made a comment about anyone with a "foreign" name.
That's frighteningly scary to think that dealerships are making that much on people. I get that they're a business but holy cow. I'll be extra shrew in negotiating for my next car haha, thank you!
Johnny, I hear you there! Be sure to ask for the oldest car on the lot to get the best deal. Good luck when you go to buy your next car.
True.
But if they made $500 a car there'd be no warrantee, no employees, no money for overhead.
That deal is available buying used from the car owner.
Average if 2500 markup? That's less than 10% on many cars. If you think a 10% markup is ripping you off, don't look into the markup on literally everything else you buy...
Anyone remember the for sale car magazines outside of stores. I would always read those as a kid.
I print them. They still exist.
I once asked a car dealer how much a car dealer earns. He replied, "It depends on whether or not the person is selling new cars or used cars. You make a lot more money selling used cars." I was shocked. I replied, "Really? I would think you would make more money selling a shiny brand-new car." He said, "No. New cars cost the dealer a certain amount of money and can only be sold for a certain amount due to competition from other dealers. The profit is limited. But a used car can be bought at a fairly lown price and sold for whatever the buyer is willing to spend. The margins are much much bigger for used cars."
Went to a dealer the other day. I felt the car was priced a little high. They wouldn't budge on price, wanted to charge $2000 more because I brought my own finance And wanted to charge me their $4000 package that's added to every car. Needless to say we walked out. My wife said the look on my face when the salesman came back is that I could have thrown him out the door. Watched a lot of videos from this channel and all of the BS tactics they tell you to beware they were pushing. Needless to say I've walked on 3 deals due to this. Its nice to be informed. Yes, I was very cordial and polite but said we won't have a deal. Thanks for the education you are helping a lot people.
in my experience car dealers of all types do not negotiate. they are more than happy to wait, then drop the price $200 to get some movement like it's a big deal. F them all
I look for good mileage, certain older models and longevity of those vehicle's.
For instance in MD I found 2010 Jeep Grand Cherokee with 63k miles. Only 10 year's old. Hard to find. And no accidents and to owner's. For around 11k. Depending on your state you can find great cars. Like PA n Virginia have amazing jeep for sale with less mileage. Which taxes would have cost more to bring it to MD. This jeep will last me 8 year's if taken care of. Which it is. Dealer's need to make money to there a business. Just need to look long and hard n be patient.
Ray Lat is it fair to say that you are the one that was playing the game? If he was priced at cost or around cost, Is probably why he couldn’t come down. If it was a good deal just buy the car man. You don’t have to have a psychological win get a good deal. Use math, and logic. Quit using emotion.
So if they’re not negotiating there’s a reason. It’s always in our best interest to sell the car. Age is everything for sure so pay attention to that. But again, I price at cost or around cost and hope to get a trade to make it back. But I just want the volume, word of mouth business, etc. The problem with my pricing is customers are wired to think that if they don’t negotiate they didn’t get a good deal. But that’s not what makes a good deal, value is what makes a good deal. Do research and see what the market says a fair or good price is, if it’s at or under that. Buy the car, quit makin it harder than it has to be.
Just don’t
buy the car if you don’t like the price!
Chiafade now okay. I sincerely apologize for whoever hurt you. If you ever need help in the future, I’m here for any questions you have.
Last month I was ready to buy a used car that I know had been sitting on the lot since last October. I told the sales guy if he could take $500 off the price, I would buy it that day. He said no. I asked what his bottom line was and he told me it was the sticker price that had been on the car since last year lol. Well, with the mileage on the car, the amount of owners, etc., I knew I could do better. And yeah, the car is STILL sitting on that lot.
Some dealers won't budge, and Toyota dealers are one of the toughest. They know they sell a great vehicle. The biggest mistake is to shop or try and deal when we have the itch or fever to get a car. Shop when we don't really need a vehicle to badly
Covid19 will put these arrogant dealers in check
Yeah my family and I are big Toyota fans but damn they think they can ask anything for them like there made of gold.
And why I avoid retail purchases of most everything -- cars especially.
The world is full of people recently informed of the boat load of cash it's going to cost to fix their current in-acceptable-shape car. The amount scares them and they worry it's only going to require more serviced down the road. I swoop in with cash and take the troublesome ride off their hands. A few hours of work along with the expenditure on Internet parts and I'm in a nice ride for nickles-on-the-dollar.
Ignorance is a booming business!
"Can't" and "Won't" aren't synonyms. But, they tend to be treated as such for folks never seeming to make forward progress.
Is leasing a car a good idea?! If so, what's some key factors I should look for?? Thanks!!
I remember when I bought my first car from my school chefs parents. I said "whdaya need from me?" and his pops said "I need about tree fiddy." So i gave him a dollar.
In my area which is a salt zone, they are asking over 20,000 for 20teen Toyota Camrys with 150,000 miles. It's INSANE.
It is absolutely amazing that when you trade your car in say on a new vehicle and you check your vehicles average trade in value in the "book" the salesman at the dealer always grossly undervalues it below the average trade in even if it has low miles and is very clean, however when you go to buy a used vehicle the dealership always want to get a number far greater than average resale based on the "book"? My friend works at a large dealership and tells me they make a mint on decent trade ins that don't go to auction! Comments?
Another practice that often takes place is that is when you bring your car in as a trade in --- a dealer will bring out a Kelly Blue Book to tell you it's value because the KBB is very often lower than the NADA. And then of course, conversely, if you go to a buy a car -- they will bring out the NADA book -- knowing it's to their $$$ benefit to do so over the KBB.
Never use your vehicle as a trade in.Put it in your front yard with a sign on it.
If it never sells give it to charity.Burn it.Anything is better than using it as a trade in.Anything!You will get x on your car and when you drive by it 3 weeks later it will be selling for 3x. Or auctioned off for 3x.You might as well walk in there with a sign on your head that says loser.
@@jamesfleming5849 not necessarily. I got more for my trade in than the sale price when I bought it 8 month earlier. I was lowballed by 4 different dealerships prior. Just depends.
@Ray Lat I have no reason to lie, I don't care about impressing anyone on here. Believe or not believe as you want.
@@scottnicholas2676 Absolutely true. I've called out a few salespeople over the years for trying to low ball my trade with KBB. The thing is most customers have no idea about what you said, they "trust" KBB and have no idea that dealerships actually price retail cars by the higher NADA. The games usually stop when I tell the sales punk that I worked in the car business for many years and know the tricks.
Back in the early 1990s I bought a Plain Jane 1990 Ford Ranger, 4 cylinder, stick shift, radio and rear bumper delete and it even had the stock hubcaps and tires on it!! It WAS a push button four wheel drive model, but frankly it was a simple "cheap" truck, when I got it off the lot for just under $9800 out the door (with tax and fees it ended up costing just over $10,000)!! Within six months I had a rear dual tube bumper I installed on it, a roll bar kit with five working KC Daylighters across the top of it, nerf bar (steps) and grab handles on both sides! I even went ahead and installed custom wheels, bigger tires, a tricked out stereo, a sliding rear window, vent shades to the door windows, a windshield visor, sun roof, a push bar on the front with two more daylighters, front tow hooks, a bug deflector, mud flaps (all for wheels) with matching floor mats AND a set of louvers on the rear window as well! I even had the headlight and tail light "dark out" covers and all the covers for the KC lights.
The craziest thing happened though when I took it back to the dealership one day a few months later!! The sales guy came out as I was in the parts department walking around my truck with a clip board in his hand! And when I came back out to get in the truck he ran up to me, stopped me before I got in and said "I will give you a decent trade in figure RIGHT NOW, if you are looking to get rid of your truck!"
I was curious and I said "Really how much would you give me for it?" and he let out a huge sigh like I was stealing money from him and he said "I will give you $10,000 the way it sits!"!!!! I looked at him and said "I paid that for the truck and you OBVIOUSLY need (and want) this truck more than I want to get rid of it, so you'd have to do way better than that!" AND FURTHER I told him "Besides I have more than that into it, so you'd have to at least make me a REAL deal to start with too!"
It was then he looked back at the little truck, looked back at me and said "Would you take $16,000 for it?" I was surprised he offered to go that high, but I used to work as a mechanic at a dealership and to the sales guys the numbers literally mean NOTHING to them!! I DO have to admit I was surprised by his offer and yet I refused it still, the truck DID look amazing with everything I had done to it, and I am certain he'd been able to get close to $20,000 out of it the way it looked, all jack up and low miles on it! And has I reached for the door handle to climb in he further blew my mind with his next offer!!
"Come on lets talk about this, I can give you a new Ford Fiesta and $6000 in cash today for it!" He countered his own offer! Again I hesitated, and look back at him!! Politely I thanked him as I again started to climb into my truck, and that is when he asked "What would it take?" as I got in sat down on the seat and stuffed the key into the ignition!! I looked at him through the open window and said "You do realize I am driving a truck don't you?"
My point to this is, had he offered me another truck I might have considered it! But because he offered me a vehicle I would consider a "lesser value" and a "lesser car" I refused him again!! Two years later though my idiot wife (now ex wife) totaled the little truck destroying all my hard work I had done to it!!! But for a brief moment I knew that I could have made out of a $19,000 trade on a truck I had only paid $10,000 for!!!
If you DON’T have ALL the cash for the car you WANT don’t complain about price it watch videos trying to find out how to get a good deal. Either SAVE up or buy something within your budget or keep buying those bus tickets!
Why save up when car loans cost almost nothing right now? Go to the bank and get qualified before you step foot on a car lot. Just buy only as much car as you need, if any, and use that cash for other stuff, instead of a credit card. Cut those up in little pieces.
It's called: I'll check it out with manager!
Well I know it’s now 2022 but I’m seeing dealerships offer 40/50% trade of what the cars are being priced at on the lots for sale when they recondition it. Offer max 10,000 yet the same vehicle will be priced 21,000/23,000
I followed every single car my family ever traded in and never did they reach lower than a 206% markup. As an adult, I will never use a dealership. If they really were only marking up a $2500 profit on cars I’d feel differently.
Exactly my point, those assholes are greedy and crooked. They easily mark up the trade-ins by $5K to $10K and act like they are at loss. Bloody, I sincerely wish they all go out of business and end up on the streets homeless, I have zero empathy for scammers.
Just remember, Kelley Blue book's parent company owns car dealerships, both new and used. This is pretty much the theme for all those appraisal websites. So, the prices you see on these sites is an illusion. People think this is the fair market value, but it's not. It's the market value based on what the parent company dictates to the subsidiary running the website. When you go there looking for a price on a car model you want to buy, just take it with a grain of salt. Everything is negotiable. especially during a pandemic.
Scott, Kelley Blue book is owned by Cox Automotive and they do not own car dealerships either new or used. They do however provide services for the auto industry but they are not in the retail automobile business. The market values are based on actual wholesale vehicle sales data and retail vehicle sales data. Just as a reminder the market value of anything is ultimately determined by what someone is willing to pay for it.
@@CarEdge - Look up Cox Enterprises or Manheim for example. Dealerships was a broad statement. I will concede that, but Cox owns just about every big automotive website. Within that umbrella you will find auto sales. it's not front page news, but if you dig, you'll find it. iMO Cox Enterprises/Automotive, and their subsidiaries have major control over setting prices.
Remember back in the day, they said on the windshield $500 down? They have 500 in it and they would sell it for twelve hundred or thousand they weren't out anyting then. They'd sell it on a payment plan on weekly installments! Then when they were late by a day or two and they would repossess it and sell it again they got rich on one old junker. I bet some of them are still doing the same thing today!
It’s a lot. Dealers make more on used cars. I went trough training with the biggest dealer in Phoenix, their pricing and sales tactics made me walk out. New cars went like this, sticker price on the car gets them to talk to a salesman, salesman adds on 3k, then finance adds on another couple grand plus inflated interest rates. They expect the customer to walk out, some take the bait, drop the price by 1500 for the ones that walk. They still expect some to walk on the lower offer, some take the bait, drop it again...etc. either way they plan on selling at just over sticker, which anyone knows is nuts, but they think they got a deal since that initial offer was so high. When I left the finance trainer told me I was crazy, said I’d make a killing since I didn’t look like a salesman and I could use my military service to sell.
Good riddance. Their mascot makes tasty bbq, that is my hint to avoid this large dealership.
I wonder what dealership this is.
Not the norm, sounds like a bunch of slime balls. Surprised those dealerships can still survive in such a competitive market. Sorry you had that experience.
Fortunately the internet now has lots of sources that will provide what the retail price of a preowned vehicle should be, or at least a range of values based on mileage, condition, etc.
New is for show, used is for dough!
Mark Mangus I’m buying a used car ‘cause it’s more environmentally sound.
Great job. I can learn alot from this guy
I never buy from a lot anymore. They bend you over the sink. I buy from individuals. I check it out, get a pre-purchase inspection so I know what it’s issues are, and then use that newly found knowledge to negotiate down. If we can’t make a deal, I walk away. Buying from a lot is a waste of money. But do your homework.
Just wondering - much do dealers mark up new cars? Talking the difference between the sticker price, and the charge from manufacturer to dealer plus transportation plus loan %?
as long as the horse is still in the barn these car dealers will keep making a killing.
Listen, I try to be objective with some of your videos. With all my heart I am not a troll. I am actually from the same metropolitan area that you are (I am old enough to remember Lustine Chevrolet in Hyattsville!) Dealers on a new car obviously want to make money on the front end and then they also make money on the buy back. Then they make a shitload of money on the financing if you let them. Major dealerships in many cases will not resell a car they take in trade on their lot because it is too late of a model or may have some issues. The markup on used cars is extraordinary. dealers always add on an extra thousand dollars above Black book value to their asking price on a used vehicle. There's certainly is lots of room for negotiation. I know because I used to buy trade ins (to late of models for them to achieve their profit margin) I was in cahoots with many sales managers. I knew what they had in the cars and I knew what they sold them for. I also know the American motorcycle industry. On a used Harley-Davidson the markup is 4K. The code on the rear view mirror /The year of the bike /what they have in it. The salesman then knows at a glance the year, what the dealer has in it plus 4k is a selling price. I have never ever in my life paid more than 27% less than MSRP on a new vehicle. I know better than to buy a used vehicle from a dealership! By what you say I am not sure that you have your client's best interest at heart. My instincts would tell me that you are double-dipping from both ends (profiting from both clients and the dealerships). there is no way you survived as a sales manager and selling vehicles for over 30 years and being completely aboveboard and honest. Again, I do not to mean to be a dick I am just telling it like it is!
Sideways rain, just because the managers that you have dealt with over time might not have had any morals doesn't mean that I don't. I represent my clients only. When dealerships ask me how much they want me to figure into the deal for me, I stop them in their tracks. The only money I make is from the client, I will not accept any money from any of the dealerships, period, end of sentence. By the way you are just telling it like you think it is and by doing that you are indeed being a dick. Stay safe, use a condom. Ray
You aren't buying any imports for 27% back of MSRP.
@@tomboard1 Toyota
Specifically! Know exactly what you want, buy on the last day of the month.
As much as they can
1
You buy a new car, trade in the old one, you "get" 5 grand for your trade in. they get sold to wholesalers for 500 to 1000, or the employee s buy it for 500 to 1000, or a really nice one get a bath and for on the lot for 5 grand. Here's the rub , they gave you 0 $ dollars for your trade in. It's not the deal you get, it's the deal you think you get.
Dealers are not going to show you $5k trade in and put $0 in the car. They don't have $5k mark up on the car you're buying to be able to do that. But, yes, there are some dealers that will show you more for your trade than what they're actually giving you for the car. Any over allowance is just coming off any mark up they have based on the price they are selling you their car for.
One auto group I worked for was 3k to 5k mark up plus dealer fee.
What is the dealer fee? And can you make them take it off?
Not as much as you think, they rely more on making profits on the financing and other add ons such as warranties and such, and thats why you shouldn’t tell them you want a cash price, usually better off to finance it and pay it off immediately.
Many used car dealers in Eastern Ontario will buy cars in Quebec and are getting away with not supplying an owners manual in English . The unexpecting customer will then have to pay $50. plus if they want one in English . This is a big injustice
The most i ever got trading a good running car in was 2k and they made it seem like that was a good deal and i bought another explorer 4 years newer with 40k less miles for 12k
I am looking for a car $8500 with 60,000 miles. You guys never talk about people with budgets under 9 grand.
Just went to a dealer the other day to look at a car. I was on the lot looking at it and the manager happened to come out and ask if I need help. He said the car I was looking just sold. I asked what they got it for? He looked and said $12,800. He told me it sold for asking price $18,000.
In defense of the car lots. They have overhead that dwarfs your overhead putting the car for sale in your front yard. They've taken the risk on that used car and many times don't realize the full reconditioning expense until they get knee deep into it. No customer is going to tell the dealer they need a new transmission on their trade, when they whisk your car away for 10 min while you are chatting with your salesman.
Like most business they are entitled to make some profit. I'm not talking gouging profit. I'm probably going to get pounded for even remotely supporting the dealer. The poor guy selling that car may make a couple hundred bucks (at most). The owner gets their share, then advertising, payroll for the shuttle guy and the service tech, the person answering the phones, the overhead to keep a well stocked parts dept, Etc. For every car they flip quickly, they will have others that sit and there is an expense for that car to sit with insurance, lot fees, lot maintenance, etc. The good flips need to help float the klunkers. For every buyer who's happy they beat up a sales guy, there are others who are happy with a fair deal. They got a good reliable car, good financing, and the dealer made a few bucks to help their employees feed their families. Who goes to a restaurant see's a $30 steak dinner and then tries to negotiate the price? It doesn't happen. The owner sets the price on fair market value, overhead and profit for taking the risk in owning a business. This isn't saying there isn't wiggle room at an auto dealer, but there is a bottom number they can't cross.
I've traded cars before, but its usually after I've gotten my money's worth, had it paid off, put $ in the bank and I didn't want the headache of selling it myself. I did my research and most times gotten fair trade values. Sure there are dealerships that are the stereotypical slimy car dealers, but most reputable dealers are moving cars is a fair manner. Man I'm gonna get roasted for this....ha!
Some of my same thought. Too many people like free market until they are the buyer.
@@fredbecker607 Yeah, or until they need a bailout.
That glass of liquor next to him is old school.
@Ray Lat way much LoL
My school.
There’s now way a 2013 anything (unless it’s foreign) should cost $19k
$2500 front end gross even sounds high tbh
WAY HIGH
My front end deal avg is $500
Haven’t had a car payment in 25 years save up my money and pay cash with individuals Will never deal with car lots and bank loans!!
They mark them up 2k or more.
Any insight with the Costco auto program?
Im in the market for a use car. Where is the best place to purchase one dealership, on line, or rental car company
I see major dealership reps ragging on Carmax and no haggle places for being overpriced, well, after your dealer fees and extra padding are factored in, your cars come out to be the same prices, if not thousands more than those places. I am car shopping right now and the regular scam dealers are making me want to just order a car offline, right to my door, .. like a pizza and never look there way again.
I have a car leased for 3 yrs, Im 2 yrs into that contract, I was considering paying the remaining year in one lump sum, can you tell me if this is a good idea? My concern is what would happen if the car got totalled in an accident, would i lose that money Ive paid?
Make sure you have GAP, or guaranteed asset insurance, or MEI, motor equity insurance.
If your vehicle is totalled, then the comprehensive insurance may not cover (via the ASSESSORS VALUATION), the amount you still owe.
I only know this because my corolla was totalled (not my fault, he ran a red light) and the assessor valued it below the finance payout.
As luck would have it, I was sold the MEI policy when I purchased.
The other thing to look for is; if you pay the comprehensive insurance by the month, then the insurer has the legal right to claim the rest of the premium for the remaining insurance term.
The policy usually is a 12 month deal, so if you were 2 months into the policy, expect to have to pay the remaining 10 months money.
Yes!!! you will he did an episode on that. You will loose your money. (Accident)
Well my friend went to his dealer where they were offering him 7k firm for a car he still owed 14k and was retailing in their lot for 12,995, you are a different breed this guys go for a minimum of 5k just on the car
So let’s break down that profit margin. There’s reconditioning if the vehicle( could be 1-2k per vehicle), fees from banks, commissions to pay. Car dealerships are a for profit business not a charity
Now that interest rates are going up, people aren't as willing to go into debt to buy cars, so mark ups might be reduced to attract more buyers.
Not sure if I’m getting scammed but I must ask before I make a purchase. I’m trying to buy a 2018 Mercedes CLA 250. The online ticketed price is $29k. When I got to the dealership and said I would pay cash he told me the price of the car is an additional $5k because they added some “premium package” to the vehicle plus with taxes and licensing it would run me another $4700. The cost of the car is almost 10k more than the ticketed price. Does this sound ok because it just didn’t sit right with me. I told the dealer I’d have to think about it. Is it normal that cars are priced at $10k more than the online ticketed price?
Well first and foremost.....you can't run from tax. Secondly why is your tax nearly 5K on a 30k Car? Continue not sitting right bc the whole thing is fishy. I'm not sure what package they added to the "used car" for 5K but whatever it is def ain't worth it.
Hi new subscriber. You said average markup is 2500. Is that on new or used? If used only, what is the markup on new cars? Also do dealers use a gross profit margin percentage like 9 or 10% and is that percentage different for new vs. used?
Hi Brian. Take a peek here: yourautoadvocate.com/guides/how-much-do-dealers-make-on-new-cars/
No two used cars are alike so it is impossible to price match
Thanks sir.
I buy cars on the street from gangbangers, you receive threats to be killed or about police, but overall where else you can buy a car for $4k.
Hope you are armed and practice defensive shooting.
😂
What about service? Do you get free oil changes?
@@kerriwilson7732 cheap, $35 for regular oil plus if you bring your own air filter it is then free air filter change.
@Jaime Garcia yes, they give titles, you rransfer title at the dmv
I think $2500 is a little low avg.. I'd say more like $3k.
Average gross dealer profit is $2,500... And THAT’S why they can shove those “fees” where the sun don’t shine. Never pay ANYTHING but price, tax and title fees when buying a used car. All those other fees are ALREADY included in the sale price. This is precisely why you can go buy the same exact used vehicle from a private seller and the sale price is much less expensive. If you pay the stealership price AND THEN also pay all the “fees”, congratulations, you just got DP’ed.
Is $2500 for all cars? I know you said not for Lamborghini's etc - but mark up on a Toyota Camry vs. a Mercedes GLS, for example?
no matter what make the used or new car dealer goin to sock it you baby. just the way it is unless you got Trump money. lol.
Stupid is what stupid does. Buy local, buy from private sellers.
Carmax marks theirs up from 2500-4500 dollars.
I am a dealer I haven't made 2500$ on a car in years, you're very lucky to break 1000$ and after you take out all the expenses and overhead it's less than that. Dealers are not trying to "screw you over", they are just trying to make a living like everyone else
The dealer will screw you over if you let them. There’s a lot of bait and switch going on with pricing. A car listed at $16,995 will get jacked up hundreds or thousands when you call or visit. Reconditioning fees or dealer fees, accessory fees etc. The finance manager is the worst, he will take you from book value to thousands upside down in minutes if you don’t know what your doing. He sells backend bogus warranties, gap insurance, tire packages etc that is all crap. There are still some legit dealerships out there, but you have to search.
Calling bullshit..... typical salesman talk right there....
@Chiafade now there is no dealership buddy because im out of business because of stupid fucks like you that beleive everything they hear
Because they assume that everyone is out to get them....wheres my 10 grand?....didnt think so...you can talk all that bs that you know nothing about when its on your phone
I dont have any fees...none....and you still arent happy, i could take a 10k loss on every car and you would still think you are getting screwed
Look if you buy a New vehicle for 35k,you will lose 10k,with in the first two years. Miles on the vehicle is a plus. Trade in is ok but you will do better to drive it take care of it.a New truck will cost you 35 to 70k. Crazy. Trucks are the number one seller. 7 year loan Wake up that is stupid.
A used car is only worth low book if it's in good shape new tires no dents scratches no worn int
So take low book value and add $500 that would be a fair deal
New cars sticker less any rebates
Byeing a new car yoo loose 5 grand as soon as you register it
Saleing cars is a life sucking shity job
I use to sale cars 😀
Love the jewelry...sharp.
Today as much as they. Can but the pandemic has turned the table
Ray Lat 10 years loan on car that only lasts like 5 years lol
Great but Dealers aren't willing to budge on prices, they think that pandemic shortage is still going on
Hello a VW dealer has just listed a 2014 Toyota 4Runner I like, currently they are inflexible on price which I understand as its new on the lot, however I can wait. If no one buys it, how long a wait until they will give me around 10% off?
What state are you in? How much do they want with how many miles?
Roman Shukshin Alberta Canada, only 115k km (not miles) they just raised the price to by 500 to $28500 CAD. I see CarGuru has it as good deal at $1400 below market and 21 days listed... Id like to offer $25k and pay $26k that reasonable? Seems strange they would list a price they couldn’t bend on. Is CarGuru trustworthy?
when a dealer offers you 6500 for a pickup -and have one the same year and mileage and options on their lot for 19986.00 + taxes -you know the markup is more than a couple of grand. Thats why they take your keys for your trade -disappear -then use 2-3 levels of sales people to brow beat you into paying the huge difference they ask -and EVERY deal leaves the customer "upside down" -simply because of the dealers profit margin and depreciation. Buying a car at an auction and having a good trustworthy mechanic is by far the best option-buying a car at a dealership is probably the worst. 99.9% of the population would sooner get a root canal than deal with car sales people. Especially the recent "imports" -slick and good buddy guys--LOL -all readers know exactly who I mean -and hate them
You are correct. The markup ranges from 5000 to 7000. I know that for r a fact. There is a major markup in the car and truck industry. Today's used trucks are generally over the manufacturer's retail price for a new truck. Sometimes as much as 2 to 5 thousand dollars over!
They are all ripoffs, dealer fees, why? Buy a car from a private person, bring it to you mechanic, leave all the bullshit fees behind.
Had a dealership today raise the amount of a down payment required after agreeing to a certain amount yesterday. Is that the norm? I was so pissed, I had only brought the agreed upon amount.
Ended up buying my Explorer elsewhere and I sent the salesman pics of my new SUV. Commission lost due to greed.
ahhh i rememeber those days
2.5 -3k average mark up on used cars
whats he smoking ?
The mark up is $2500 on average, but on what? An old 1988 dodge or the 2017 model he mentioned. Furthermore, he doesn't tell us which models have this mark up. Is it a SUV or a sub compact? This video is useless in determining dealer markup
Car dealerships those people are like sharks Audi think about is money but they love hurting the customer I will never do business that way
Did he mention the friggin admin fees?
Call Max the average is $5000
How much do you get per 1000 views on TH-cam ?
I HIGHLY doubt that a car dealer averages only $2500 profit on cars----- Come on, be honest with us.
Car Max pays their sales peoples 275 per car sale
Wouldn't the amount the car dealer makes depend on the value of the car. I just bought a 95 Camry for 3,900. I can't see how the dealer made 2,500 on that.
Four grand for a 25 year old Camry. The dealer probably paid a grand for it.
@@daveinstlouis The car was really clean with only 110,000 miles on it. It's not easy to find a car like that.
Doesn’t matter. The car is not worth more than a grand.
Hey pal, I have a bridge in Brooklyn I want to sell you cheap. $3900 for a 1995 Toyota Camry Hmm? I'm sure all the salesmen still talk about that at the bar after work. LMAO.
@@tyronmegawatts6580 Your an idiot! You try finding a car like that for a grand.
Do you negotiate car prices for customers
Bill, that is what I do for a living nowadays. You can learn more here: yourautoadvocate.com/pricing/
That’s a lot.
He said it’s between 2k-3k. Your welcome.
Salesman offers me a bourbon on the rocks and I might just sign quicker.