to buy new or used car?

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Bylo Selhi
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Re: to buy new or used car?

Post by Bylo Selhi »

BRIAN5000 wrote:Do you really think a dealer will sell a car for less then what they paid for it. IMHO not likely.
When successful store owners have inventory that is either stale (e.g. last year's model) or less than perfect, e.g. (a demo, scratched/dented, open box, etc.) they'd rather sell at a loss than hold on, perhaps forever, waiting to find a sucker who'll let them sell at a profit. (And what's a "profit" when the dealer incurs costs to hold inventory, e.g. finance interest, storage, insurance, etc.?)

Moreover demos serve additional purposes:
1. They allow the dealer to show and demonstrate their products.
2. They allow the dealer to offer staff a low-cost perq, i.e. use of the car when the dealership is closed.
3. They allow service department customers to have a low cost "loaner" while their vehicle is repaired.

Those purposes have accountable values that enable the dealer to expense and/or write off part of the value of the vehicle. As a result the book "cost" (ACB) is ultimately much lower than what they paid the manufacturer in the first place. I imagine they still try to sell a demo for more than their book cost, but that's still less (a) than what they originally paid and (b) a potential bargain to a purchaser who understands how retail works and knows how to negotiate/haggle.
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Re: to buy new or used car?

Post by BRIAN5000 »

My next door neighbour just bought a new (he passed on the demo) Dodge Ram 1500 Hemi Club Cab. ( I think that's what it is, Club cab, crew cab?) List price on the window $49,000, for the Demo $40,000 according to him he paid $34300. In this case the average retail investor without a trade may have been able to get the demo for $38,000. Still almost $4000 above what he paid and I'm sure the dealer didn't give him his truck at or below cost.
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Re: to buy new or used car?

Post by FinEcon »

BRIAN5000 wrote:I may be wrong but A ad B should be the same price !

It is unlikely a dealer will sell car B for any less then a good negotiator can get car A for. I have often wondered why people buy demo's you may think your getting a discount but I really don't think you are. Your numbers seem to suggest otherwise? Car B was previously registered making it a used car and I think generally not a demo. 2013 is the redesign year for the Accord.
You are wrong and its easy to see why if you consider a simple thought experiment:
1) the dealer has a raffle
2) you won
2) the prize is you can pick either car A or B
Which one do pick and why? They are both apples but one is a bit more bruised than the other. Brian, I would be skeptical of the numbers your buddy quoted on the Dodge truck, I have intimate knowledge of the industry and margins are nowhere near what would support those numbers. There's most likely something false, omitted or otherwise not right there.

That said, to the original question I would pick C. IMO, without a doubt, its represents the best value. You are buying an Accord, it's not a car lovers car. Its a reliable appliance, no more no less. Now if shopping for a BMW or an Audi, one ought to place more emphaisi on getting what one *wants* and less on best bang for buck.
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Re: to buy new or used car?

Post by BRIAN5000 »

Over the next little while I will try to confirm those numbers. I guess I could go knock on his door and ask to see the paper work. :wink:
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Re: to buy new or used car?

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I think the sticker price is meaningless. When I bought my new truck, the sticker price was $29K, but they were offering "employee pricing" of $19K. They gave me $3K for the 30 year old truck I traded in.

My sister was an account for a dealership. She told me that they made no money from new car sales; the service dept kept the business going.
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Re: to buy new or used car?

Post by AltaRed »

It also depends on import versus the big 3 domestics. Setting aside manufacturers' incentives which skew results, margins and discounting is much different (more) with the domestics and I'd expect huge discounts on a purchase.
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Re: to buy new or used car?

Post by twa2w »

Personally I would pick option B. Full warranty and much newer for not a whole lot more $.

Car dealers often will sell vehicles at a loss - odd colors / certain options sometimes do not sell well. Sometimes the dealers have too many cars in stock. A good portion of the dealerships sales department profits come from the finance office and extras- kickbacks from the banks for financing, rust proofing, fabric protector, paint sealant, etching, locking wheel nuts, floor matts, roof racks etc etc. The balance of profits are from the service department.

Many years ago when I worked in dealer financing, rust proofing was $400.00 at the dealership. The rust proof company charged 100.00 and he paid about 10.00 for the chemicals and $6.00 an hour to a lackey to spray the cars. The lackey could do 2 cars an hour - or sometimes 3.
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Re: to buy new or used car?

Post by kcowan »

The other factor is to make your offer the last Saturday of the month, half hour before closing. The dealer gets huge bonuses for making a monthly volume target and will forgo profit on an individual deal to make more profits on every sale already made that month.
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Re: to buy new or used car?

Post by friend »

we decided to purchase option B...

the full warranty was the deal maker...

OTD cost was $20K plus tax, this included new license plate, full tank of gas, interior floor mats, trunk mat, and B1 service (oil, oil filter, brakes)...

reason given for the deal was odd color (metallic mystic green) and that accord owners generally buy new over used...

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Re: to buy new or used car?

Post by BRIAN5000 »

OTD cost was $20K plus tax, this included new license plate, full tank of gas, interior floor mats, trunk mat, and B1 service (oil, oil filter, brakes)...
This was for a 2012 Honda Accord Ex model, no leather?
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Re: to buy new or used car?

Post by friend »

brian,

that was for the 2010 honda accord, ex no leather...

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Re: to buy new or used car?

Post by sydney2 »

I thought I would share my recent purchase of a used vehicle. I have been looking for awhile to find what I wanted and since we stick with General Motors I was watching ads and searching online.

I bought from a GM Dealer. Did not trade the 2001, will try to sell privately.

I am replacing my 2001 Buick Regal LS, and I really like the Buick line. I bought a 2010 Buick Lacrosse CXL fully loaded for 25K, plus tax. This car came off a GM corporate lease and has 36,000 kms on it. It drives and looks like new. Having searched and priced them for the last few months I was satisfied with what I paid. We take more driving holidays and this is a very comfortable car. It has a 3.0 6 cylinder engine. I negotiated an extended warranty.
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Re: to buy new or used car?

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An update to my used car purchase above. After driving this car for a few days, we heard a weird noise coming from the right hand passenger side of the car. It was such a weird noise that we couldn't get a handle on where it was coming from. With my paranoid personality at work, I was sure we had just thrown our money away and would have to fight with the dealer to get it fixed. I even went to the owners handbook where the previous owner's name was listed and called him last night. This car is immaculate and he told me it was a great car, he traded up to a Mercedes. but he did tell me that this weird noise was there when he had it and he had taken it to the GM Dealer where he bought it and they either couldn't hear it or didn't try to determine the cause, he didn't seem to find it a problem. (At this point I my brain was on schizo mode and I thought the noise was somewhere within where they couldn't find it without taking the damn car apart.) I had thoughts of returning it to the dealer.

Today I took it back to the dealer here in Burlington Leggats GM on Fairview and within a few hours they called, they had determined the problem and it was fixed. It was a loose inner wheel liner. No problem, just me getting too far ahead of myself, and I hate spending money on a car, I would rather buy some dividend paying stock instead.
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Re: to buy new or used car?

Post by Quebec »

I hate spending money on a car
How about this strategy then: buy a five or six year old Honda or Toyota with less than 100 000 km on it. Drive it for another 10 yrs, or until either (1) rust is out of control; or (2) you are spending more than $1-2k a year in repairs.
I purchased a 1999 Corrola in 2005 for $7.5k cash. Seven years and 100 000 km later, I still have not spent much in repairs and maintenance, maybe $2.5k total (excluding brakes, tires, oil changes). I'm confident I'm good for another 2-3 yrs without serious mechanical trouble, although rust is beginning to show. Projected average cost over 10 yrs: $750 a year in depreciation, $400 a year in repairs. Add a CAA membership so that the wife feels safe driving an old car.
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Re: to buy new or used car?

Post by AltaRed »

Going a little off topic, it is important to buy according to primary usage. A Corolla might be fine in most situations such as freeways and urban areas, including commuting, but not on 2 lane highways in hilly or mountainous country. You need some real horsepower (torque actually) in the mountains of BC or Alberta.
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Re: to buy new or used car?

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AltaRed wrote:Going a little off topic, it is important to buy according to primary usage. A Corolla might be fine in most situations such as freeways and urban areas, including commuting, but not on 2 lane highways in hilly or mountainous country. You need some real horsepower (torque actually) in the mountains of BC or Alberta.
I don't live in Alberta or BC - but I have visited the mountains of both.
I've driven in several European countries where climbs are longer and/or steeper than in Alberta and BC.
I'm not a slow-poke :shock:.

To me a Corolla - particularly the recent larger models - is generously-sized. I prefer to drive a nippy manoeuvrable car - especially on mountainous roads.

It's my experience that most cars have engine sizes and capacities that are proportionate to the size and weight - and thus the power demand - of those cars. Relative to driving in hilly or mountainous country, the most significant deficiency of smaller cars in North America is not lack of power - it's older-style automatic gearboxes that limit one's ability to select the correct gear.

There's a phobia in North America about the "need" for bigger vehicles / over-powerful engines. There is value in the availability of such vehicles - but for everyday use - particularly given the laid-back style of driving in NA - the availability of lots of power is a want, not a need.
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Re: to buy new or used car?

Post by kcowan »

AltaRed wrote:Going a little off topic, it is important to buy according to primary usage. A Corolla might be fine in most situations such as freeways and urban areas, including commuting, but not on 2 lane highways in hilly or mountainous country. You need some real horsepower (torque actually) in the mountains of BC or Alberta.
A friend has a 1991 Toyota Tercel and it will not maintain speed going up the upper levels highway from the second narrows. The steepness is often underestimated by people from the flat lands.
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Re: to buy new or used car?

Post by HardWorker »

kcowan wrote:A friend has a 1991 Toyota Tercel and it will not maintain speed going up the upper levels highway from the second narrows. The steepness is often underestimated by people from the flat lands.

Yikes :shock:. Given it's age, even it it's low mileage, it's probably pushing 50 horses, and maybe 50 ft lbs. it would be bearable downtown, but a nightmare on the highway, stick or slush box.
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Re: to buy new or used car?

Post by pmj »

HardWorker wrote:
kcowan wrote:A friend has a 1991 Toyota Tercel and it will not maintain speed going up the upper levels highway from the second narrows. The steepness is often underestimated by people from the flat lands.

Yikes :shock:. Given it's age, even it it's low mileage, it's probably pushing 50 horses, and maybe 50 ft lbs. it would be bearable downtown, but a nightmare on the highway, stick or slush box.
A little more - but not by much: http://en.wikipedia.org/wiki/Toyota_Tercel
I was unimpressed by Toyota's marketing through the 90s and much of the 00s - they abandoned some very nice hatches and wagons on both Tercel and Corolla platforms. But no effort spared on the Celica...
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Re: to buy new or used car?

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pmj wrote:

A little more - but not by much: http://en.wikipedia.org/wiki/Toyota_Tercel

OK, 55 horses out of those 4 angry hamsters :thumbsup:
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Re: to buy new or used car?

Post by sydney2 »

Hope this is not too far off subject. At this point in our lives I want quality and luxury at a good price. No offence against Corolla's, my Daughter has a 2001 bought new and has had no problem, but it is too small for me and too low to the ground. DIL has a Suburu Forrester and loves it, it is her 2nd new one. Son has a Hyundai Tuscon and loves it.
Fantastic for the market that we all think differently. :thumbsup: :thumbsup:
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Re: to buy new or used car?

Post by flywaysuzy »

I just purchased a little camper van the same age as my 26 year old daughter! It must have happy hamsters in the motor, I think. Purrs along. And I can sleep in it and make coffee inside when it's raining. Talk about being a happy camper. :D
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Re: to buy new or used car?

Post by kcowan »

I wonder if there is keeping down with the Jones that develops. Even my rich friends, while they may buy a brand new car, tend to keep it for 4-5 years. One is looking at liquidating some expensive oil paintings before the estate has to deal with it. They spend money keeping their houses current but one still has his 1992 Ferrari, which still looks like new. And his other car is a 4yo Jeep.
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Re: to buy new or used car?

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Quebec wrote:
I hate spending money on a car
How about this strategy then: buy a five or six year old Honda or Toyota with less than 100 000 km on it. Drive it for another 10 yrs, or until either (1) rust is out of control; or (2) you are spending more than $1-2k a year in repairs.
I purchased a 1999 Corrola in 2005 for $7.5k cash. Seven years and 100 000 km later, I still have not spent much in repairs and maintenance, maybe $2.5k total (excluding brakes, tires, oil changes). I'm confident I'm good for another 2-3 yrs without serious mechanical trouble, although rust is beginning to show. Projected average cost over 10 yrs: $750 a year in depreciation, $400 a year in repairs. Add a CAA membership so that the wife feels safe driving an old car.
Thanks for the idea, Quebec. But, I already have a 2000 Corolla, which works well and with very little expense. But, of course, I could get a newer one. In reality, though, I am becoming paralyized in terms of buying a car. Thise was pretty easy. Good reputation. Not a bad price. Bought new.

Now, however, I am not sure that my wife finds the Corolla all that comfortable. Maybe the newer ones are bigger. I will have to try them. One real minus for me with the Corolla is that they no longer make a station wagon. And someone mentionned that they were pretty low to the ground. Maybe it would be nice to be higher in the world. Also, Corolla's at second hand keep their value. That is why I bought new the last time. Maybe a Camry or an Accord would do the trick. But, then there is still the problem of keeping their value. Some other make might be a better buy. But, then there is the question of diesel. And the questions go on. I will probably end up buying my neighbour's car when he gets rid of it, just to break the paralysis.
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Re: to buy new or used car?

Post by newguy »

gouthro wrote:And someone mentionned that they were pretty low to the ground. Maybe it would be nice to be higher in the world.
Highway mileage is mainly determined by height off the ground, city mileage by weight.

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