Car Valuation by Dealers

sheya on 10/05/2016 - 22:05

Hi

I am looking to buy a 1 or 2 year old 2nd hand luxury car (via private sale) but don't want to pay exorbitantly more than what a dealer would give the seller.
How do i find out what price a dealership would offer a seller ?
If I ring the dealership they ask to bring the vehicle in - which i cant do - because its not in my possession.

My idea is to buy off someone desperate enough to sell and offer $500 more than a dealership.
But I am unable to work out - what dealerships would pay for a particular model - assuming all would be fine with the car.

Redbook does assist but I recently purchased a vehicle (pvt sale) - and paid significantly less than trade-in value for it. (for the specified kms)
So I don't trust it even as a rough guide.
I have made a few low offers to sellers - but I feel I should be able to find out what a dealer would offer the seller.

thanks

Automotive

Comments

  • Vampyr on 10/05/2016 - 22:27
    +19

    So you want to be more shifty than a used car salesman?

  • altomic on 10/05/2016 - 22:48

    dealers are crap when it comes to trade-ins (in terms of: they want to make money so they will low ball)

    I'm sure spackbace will comment soon enough.

  • spackbace on 10/05/2016 - 23:13
    +21

    Dealers have warranties to put on the car, all sorts of internal costs, then there's detailing, panel work etc before they even get into profit. Hence trade in figures being much lower than private sale.

    That said, if you did that to me on a private sale, I'd tell you where to go. You need to be reasonable with your offer price, not something that just comes across as arrogant.

    Not to mention but $500 is not worth the hassle of selling to you, when I could just drive my car to the dealership and drive out again in my new car. A simple task that isn't worth the extra $500 you'd give me.

    Maybe you should be looking at cars in your budget, not trying to low ball people.

    And, if one person maybe accepts your low ball offer - maybe you should make sure that car has had a full mechanical check up ;)

    • tomleonhart on 11/05/2016 - 09:42

      OP said he's NOT a low baller ;)

      • Euphemistic on 11/05/2016 - 10:18
        +1

        and yet he says he doesn't want to pay more than a dealer?

        A private seller will have a minimum price in mind, that will either be the same as what the dealer offered as a trade in, or 'fair market price'. The only way you are going to find out what they want to accept for a car is by negotiating.

        Work out what you want to pay for the car and make an offer, you will get one of two responses. Yes or No, but lowballing is not smiled upon.

      • spackbace on 11/05/2016 - 10:27
        +4

        because his suggested transaction is a threat to your industry

        Nope, not at all. How could it be? I don't think OP is gonna suddenly change how people buy and sell cars privately. People will want far more than $500 over trade-in price on (for example) a $50k car.

        Your comment at the end seems designed to scare not only the OP, but people in general away from privately purchasing. If you truly cared about people, your suggestion would be to always obtain a full mechanical check-up when purchasing a car.

        I would always suggest getting a mechanical check, and a REVS check, but especially when someone is quick to accept an offer far lower than their asking price. Sure, there's personal circumstances that may necessitate a quick sale, but we're talking a considerable margin of what OP wants to negotiate down. We're not talking $500 on a $10k car here.

        Personally I find looking at cars in my budget which have already done their initial depreciating very beneficial. The budget goes a lot further in terms of value for money and the cost of ownership is less.

        That's the thing, you look at cars within your budget, you don't try to fit the car to your budget (as OP is attempting to do)

        This comment I must say is fair. I do agree with the general consensus that $500 is probably too low. A lot of people would say no purely on principle, which may be more aligned with what you were trying to say in your next line.

        Appreciated :)

  • sparkles on 10/05/2016 - 23:27
    +4

    What makes you think that people with 1 or 2 year old luxury cars are going to be "desperate" to sell? My logic tells me that this demographic would be the least likely to be desperate, and probably the least open to accepting your lowballing.

    • sheya on 11/05/2016 - 08:26

      People who have to relocate / starting a family etc..there are heaps of different reasons put up on car sales.

    • paaj on 12/05/2016 - 17:55

      To be fair, i know someone with an AMG badged vehicle and he's been trying to sell it for 3 months. Every month the expectation goes down, so the price goes down.

      For some, they're still paying off the car so its a value judgement - keep paying $1500 a month or take a $5K hit now.

  • RockyRaccoon on 11/05/2016 - 00:09

    You can go to 5 dealers for a trade in and get 5 different values. now your problem is how to find a seller who has been low balled by the lowest of the 5 dealers, and also hasn't tried anyone of the others.

    So Merlin have you plans how to do this?, otherwise you are just back where you started from. - that is how do you know what they were offered.

  • ozhunter on 11/05/2016 - 05:07
    +1

    They are selling it privately as the dealer offers are too low for them.

  • tomleonhart on 11/05/2016 - 08:25
    +1

    LOL! No offence but:

    • Want to buy a luxury car.
    • But also a low baller.

    Case of buying thing you can't afford to impress people you don't like ? :)

    • sheya on 11/05/2016 - 09:38

      just low enough to deter them from going to a dealer and sell to me instead.
      I am not putting a gun to the sellers head - he can refuse if he thinks another pvt buyer will pay more.

      anyway yours seems like a case of "pot calling the kettle black?" (Also No offence )
      Most of us here are looking for deals ..aren't we - otherwise you wouldnt be here.

      • spackbace on 11/05/2016 - 10:14

        just low enough to deter them from going to a dealer and sell to me instead.

        In the luxury car segment, considering the dealer has to put a warranty on the car, as well as get the right buyer, you'll probably find there's $10k+ difference between trade-in price and approx market value. If you go in and offer them $9,500 short of their current selling price, expect to get booted off their property!

        Negotiation is about coming to middle ground, not being arrogant.

        All that's gonna happen is you'll end up looking for months on end, wasting time by looking at cars, test driving them, then once the seller hears your offer, that's it. There'll be no counter-offer, and you're back to square 1 on the next car.

      • Euphemistic on 11/05/2016 - 10:41
        +1

        People who are desperate to sell will trade in or put a low asking price on a car. People who want to get as many extra $ out of the sale will find out what the trade in is worth, try to get private market price and negoitiate to somewhere in between depending on how long it's taking to sell.

        I looked at a car recently in a car yard. Guy told me trade-in would probably be $2-$2.5k. I reckon I could get $4k if I waited. I'd be prepared to advertise at $3.5k and accept $3k. It's a lot different when you are talking about a luxury car a couple of years old, assuming around $50k.

  • [Deactivated] on 11/05/2016 - 10:18

    OP probably is on 40k a year looking for a 100k car.

    • gkc135 on 11/05/2016 - 10:25

      If you are correct and OP is successful, we will see them back here in 6 months asking how to save money on servicing.

  • ykwon10 on 11/05/2016 - 11:15
    +2

    OP is probably one of those people who thinks his $$$$ is of bigger value than others. Good luck with your search by the way..

    Please update us with your "journey" as well. Hopefully you can show us Ozbargainers how to really SAVE!!!

  • Mad Max on 11/05/2016 - 19:55
    +1

    The reality is that you do "need" the car to live. It would be nice but you can do without it.
    Can you?
    If you have enough time to spare (waste?) you can keep doing low ball offers and see how you go. One day you may get lucky and get the car you want for a BARGAIN price.
    If you don't …so what? On to the next one.
    As long as you are prepared to wait.
    Good thinghs come to those you can wait.
    Or it may never happen.
    Unless you really want it NOW…!

    • Mad Max on 11/05/2016 - 22:48
      +1

      Edit:I meant to say "that you do NOT "need" the car to live"
      I should read the posts after typing them…

  • ozhunter on 11/05/2016 - 20:40
    +1

    My idea is to buy off someone desperate enough to sell and offer $500 more than a dealership.

    All those people desperate enough have likely already sold it to a dealership.

  • spackbace on 12/05/2016 - 15:58

    Something tells me from the lack of actual discussion, OP didn't get the reply they wanted lol

    • sheya on 12/05/2016 - 20:59
      +1

      I just feel that all of us are here to seek for deals.
      Why is it such a bad thing that someone looks for the cheapest price to pay for a 2nd hand car?

      There are so many cars on Carsales - Sellers hike up prices for their vehicles. Some of them could be there for months on end.

      When a dealer takes a car in more often than not he won't do any mechanical work on the car and just pass on to the next buyer for a profit.
      I think there is a chance that someone will want to sell privately for a price slightly higher than to a dealer and make more $$ off me because it didn't sell in the PVT market for his asking price anyway.
      Sometimes even dealerships don't want your car as they have too much stock already - and the seller has no option but to take the only offer made.

      What i find funny is - you post comments on how to save $10 on some grocery item - but someone doing the same thing for a 2nd hand car - you frown upon.
      I disagree that there isn't the slightest possibility that someone wouldn't want to sell privately for more $$ even if its $500.

      Anyway the question was not whether I should do it or not - it was how to find a dealers valuation - and now i have a better idea of it.

      • spackbace on 12/05/2016 - 21:16

        No dealer will just tell you a price over the phone, and even then it's not set in stone, that price could fluctuate by hundreds, even thousands of dollars. That won't help you if you want to use that price to offer a possible owner, so what will you do?

        And yes I will post deals for items advertised for a cheap price, coz you know what, they're advertised for that price! I'm not walking into Coles and trying to buy 2L of milk for 50c coz that's what they buy it for from the farmer.

        Are you getting the cars mechanically checked? REVS checks? Is it even reaching that level, or are sellers hearing your offer and just turning you away?

        • sheya on 12/05/2016 - 21:41

          Dont know why you are talking about coles - but anyway.
          Yes you cant do that at coles - different model than carsales.
          If you're comparing coles to carsales your analogy is not right!

          What i meant earlier is - even a luxury car owner will be out to get $.
          BTW not all luxury cars cost $100,000. There are 40k-50k luxury cars too. (2 years old)

          Do you think there are no luxury car owners on ozbargain?
          See the posts - and then check their other posts. what are they for? for saving $5 on grocery items etc.
          if they are here to save 50c - they will be delighted to get $500 more than a dealer.

          ofcourse REVS is mandatory (for me)…
          but after the price is negotiated - you just tell the seller its subject to REVS and mechanical checks.

          I am also taking a risk here - by buying privately - so if a dealer is justified to pay a lower price - so should i be - as i may have to carry out some repairs even after all checks in a couple months time.

        • Euphemistic on 13/05/2016 - 08:47
          +1

          @sheya: Don't think you are hearing (seeing?) what spackbace is saying (writing?). Sure a seller will sell to you at more than what a dealer offered, and possibly only by a small margin.

          Problem is you aren't going to find out what a dealer will offer except based on a particular deal. What the dealer offers as a trade will take into account how much profit there is on the new car, how much the seller is willing to 'trade in' for etc. It is quite possible that you could trade the same car on the same model at two different dealers for several thousand dollars difference. Dealer A offers trade value of $45k and new car for $90k ($95k with a $5k discount), dealer B offers trade of $50k and new car for $95k (no discount) - it depends on their marketing strategy. How much will you offer the seller for their trade in then, it is costing them the same $ to upgrade, and they'd probably want minimum $50k because that's what they can get for it even if the buy from dealer A.

        • spackbace on 13/05/2016 - 10:12

          @Euphemistic:

          ^^This.
          I don't think OP gets it tho. They want some magical price to offer the sellers. What if they haven't even had a trade-in price? They'd likely be offended at an offer ~10% lower than asking price, and wouldn't even begin negotiation.

        • ykwon10 on 13/05/2016 - 11:42
          +1

          @Spackbace: Some people are just good at time wasting.

  • robertbruce on 13/05/2016 - 11:09

    You are barking up the wrong tree for the seller sheya. Said seller is not likely a woody, will know what his dollar is worth and the k's will prolly be too high for you anyway!
    You are barking up the right tree as far as the car goes tho'. Said vehicle is better appointed and more likely far better maintained because the owner could afford to maintain it.

  • sparkles on 13/05/2016 - 11:30
    +1

    Rather than worry about what a dealer would pay, maybe OP should be asking for advice on negotiation strategies with private sellers. Ultimately that is who you will be dealing with. Implying to sellers they might be desperate won't help. Low-balling silly numbers won't help. I really think this is being approached the wrong way. This could have been a constructive thread for the OP as well as others, but isn't.

    Discussions over what is considered too low based on advertised price, what is considered time wasting, ways to negotiate a positive outcome might be better.

    Hypothetical: Car advertised for $50k. Equivalent at dealers $60k. You've tested it, and want it. What do you offer and how do you negotiate it (a) getting a successful result (b) not offending seller (c) saving yourself cash.

    • spackbace on 13/05/2016 - 11:42

      I guess it's hard because every car is advertised differently. Some try to get top dollar the first few weeks, others have already done that, so they're pricing them accordingly. So let's say it's advertised for $50k, but it's the cheapest on Carsales for it's variant and year, with others anywhere from $50-$60k. Now if you come along and offer (for example) $45k, you're gonna look like an idiot, because the car is already the cheapest on the market, and it shows you're not that serious at getting a good deal.

      TL;DR - way too many variables in pricing/features/condition/mileage to form a set formula for negotiation. Be reasonable in your offer, compared to asking prices for similar vehicles.

      • Mad Max on 13/05/2016 - 13:44

        "you're gonna look like an idiot"
        You may look like an idiot 9 times out of 10, but you only need it to work once.
        And from experience if your low offer is backed up by a "flash the cash" for a deposit there and then, many times you will be surprised…
        Speaking from experience ;-)
        Edit: of course you need to have done all your checks before you "flash the cash", and that is where the time waste is.

        • sheya on 14/05/2016 - 08:48

          My point exactly!!!

        • RockyRaccoon on 15/05/2016 - 20:13
          +1

          @sheya: No it isnt your point. Its your strategy, which is fine but you asked

          How do i find out what price a dealership would offer a seller ?

          And many here keep telling you, it depends on too many factors like what they were offered in relation to the price of the new car. Some dealers may not really want the trade in, so they lowball the price, and reduce the new car price. Some offer higher tradeins and higher price. Some need to sell a car that week, others have made their quota.

          One dealer might reduce the price because they test drove the car and their valuer thought there was something wrong with it, so they valued it less than another dealer who didn't pick up on the "issue".

          The point is there is NO set price that they offer all sellers, so you cant determine the trade in price that the seller got. And the seller sint going to tell you.

          Use redbok etc and get a price range that these cars sell for. Ask nicely to Sparkles above for buying strategies, you are trying to buy a car based on a logic that can never be tested, rather than look at bargaining strategies.

          Simply put you can make 10 offers at any price and one maybe accepted but that doesnt mean that it was $500 more than the dealer offered. It could be $500 below. My Neighbour sold his Audi $1000 lower than the dealer trade in because he waited too long for better offers and the market shifted downwards in that same time.

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