Quote:
Originally Posted by Bakemono
"Reasonable" is a relative term. However, I very much have a problem with a dealerships taking a vehicle in on trade and giving the person $5,000 and then the next Monday that exact same vehicle is sitting on their lot with a pricetag of $10,000 or more on it.
My father is a mechanic who works for a Ford dealer and lemmie tell you, they put as little money as possible into a vehicle they take in on trade. Other than doing a safety inspection, an oilchange and doing a poor job of detailing the interior; they dont do much to the vehicles they take in.
I personally dont trust dealerships and I think the way they assess value to used vehicles is a bigtime scam.
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That's one way to look at it. Another is that the person who traded it at $5000 had their reasons. They might have known about a pending mechanical problem that was about to cost several thousand dollars. They might have been trying to sell it on their own with no takers. They might have just been in such a hurry that they didn't particularly care (yes, it happens). Meanwhile, the dealer might have 4 other cars in inventory where they overpaid and the one they "stole" is used to average the inventory costs of those cars. They might be overly optimistic about the $10,000 and it will sit on the lot for months. Who knows?
Let me give a specific example of how things really end up working. I traded my 2003 Tundra Limited when I bought my 2007. They gave me $18,000 for it and I thought that was ridiculous. I thought the real value was closer to $16,000. It had 60K miles and they were not easy miles. I use a truck fairly hard. I considered the $18,000 to be a perk of working in the business.
The truck sat on the used car lot for 2 months. Every week, the GM asked me who put the money on it and I had to remind him that he was the one who authorized the $18,000. He was really upset about it. We were flooded with used trucks and every time we turned around, somebody else was trading in a nicer one than the one I traded. Nobody was interested.
Then, the right customer saw the truck. While others hated the color and the tool box, this customer was extatic. The miles didn't bother them. They had been looking for this exact truck. Every other truck they looked at just didn't meet some idea that they had. Based on their experience, they offered $22,000 for the thing. They couldn't be happier when we agreed. They drove off satisfied.
So what happened? Did the customer who bought it get ripped off? They made the offer! To them it was worth every penny. Did I get ripped off? Nope. I did the research and I was happy with the $18,000 and felt lucky for it. The dealership made about $3000 on the truck (it required about $1000 worth of things to keep the shop happy) which is more than is normal on a used car that sat for more than 2 months, but that doesn't mean anybody got taken. It was just a supply/demand issue for all involved.