That's fine - i will cash in at any dealer and go buy from some other. This is completely retarded.

 

This is for any transaction. Every trade has an actual cash value (ACV). We look up what they are selling for and how quick they sell and the computer gives us a avg trade value. If your truck is a bit nicer we might pay a little more for it, if it's beat, we'll deduct what we see fit, but generally the ACV will be withing a hundred bucks or so at any local dealer. Trade in market places generally are close to ACV. Now what we show you can be completely different. Many places don't like telling you your baby is ugly. If you're buying a brand new truck they'll take the mark up on the truck and make your $10k truck look like they are giving you $13k. On my back screen I have a "trade value" and "ACV", I don't change my ACV throughout the discussion. It's worth what it's worth. Because of how I personally believe deals should be structures (wholesale to wholesale) I generally don't move on my pricing, there isn't anywhere to move to. If I personally gave you $34 on a Raptor, that's all she's worth. I can count on one hand the number of times CarMax outbid me on my offer as well in the 2 years or so they've been down the street from me, though as I said, a Raptor may well be one of those times.

I find if folks use KBB and have a very nice truck and use "fair" value, they are probably close to knowing a real ACV. Of the many many deals I see, I find that to be true, and probably the most valuable tidbit in this post. Actually it pans out for the Raptor if you do a 2012 Raptor Crew and select standard options you get $34-37k. In excellent it's up to $41k. Suggested retail price is only between $41-$45. I know you don't believe me, but a Raptor is a high risk "caution" trade. Many banks value it as a regular truck, so it won't "book out", meaning, someone could agree to buy it at $40k, but with $0 down and tax + tags you'll get to about $43k OTD. The bank might only put a value at $33k (I made that number up, but it's probably about right for a similar XLT, and would be dead on for a bank that treated the truck at wholesale ACV for the Raptor which some banks use). $43k is 130% of $33k, so few banks would do that without someone having very good credit. Certainly not with a negative equity trade, which many customers have. That makes it very tough to sell to many folks. I'm doing all this without knowing your truck at all, but it's pretty solid normal practice that happens to fit what information you are providing.

 

I completely understand the game if balancing dollar. I can play that too. HOWEVER, it is highway rape to NOT honor the autotrader tradein marketplace price. I know I would never buy from you with your shady thought process. I am out for NEITHER buyer or seller to be raped. Dealers are out to rape people... and make it hurt. F that.

*** Also, no auto value estimator comes remotely close the low trade amount offered ***

I would LOVE to know what you would rate the trade at. That would speak volumes of who you are... and as a respectable individual.

http://cleveland.craigslist.org/cto/5761746240.html

 

Shady? No, realistic. Too bad you do not really know him. Love for others to ring in.

 

I think with the information that Frantz has given you thus far it is very apparent that he is trying to educate you on the workings of the dealership and has done nothing but try to help you understand. If you state that you would never purchase from him because he is a shady individual why would he even bother to give you a price?? By the way it sounds like that dealer was giving you an auction value for your vehicle.

 

This! Because this is what every car is really worth. Because if I can simply go to the auction and buy another Raptor and make what you perceive to be a raping profit, then I would do that on a daily basis and drive a new Raptor rather than a Ford Fiesta S. Any dollar over auction value is part of the value of the new car deal. The trade in market (TIM) prices typically represent UNDER auction value by a few hundred dollars to make sure it's worth while. You talk about honoring a TIM certificate like it's a dollar bill, it's not. We certainly won't honor one a customer fills out without double checking it.

The ENTIRE purpose of all the TIM tools is to get you to trade you vehicle with a realistic expectation of value. Obviously it has grossly failed for your case. It is NOT a consumer tool, other than to provide information for your vehicle. That's how it works. I intentionally avg $1k profit per transaction. I sell everything I can at invoice, and give you actual cash value for your trade and then I make a few bucks from the bank. It works out to about a grand. All I'm saying is sight unseen I would guess ACV is close to the figure you were offered, so that's likely what I would be able to have it in it too. If you told me ahead of time you like funny numbers I would take whatever profit normally is on the new vehicle and let you have a bigger trade number instead. To me the only games played are by the customer. I am about the cheapest "first pencil" commercial guy in my area. Just trying to build a business for myself. I'm not trying to earn your specific business, but I believe the more educated folks are about the process the more they can go into a deal understanding what's fair. Fair deals are good for everyone, and they should be found locally whenever possible. If people on this forum get a better understanding and have a happy process with their local Ford dealer then more Fords are on the road advertising for me.

That's $1k profit for the dealership. I get paid a percentage of that. Still driving my Fiesta!

 

Reps sent on all your great posts in this thread Frantz. There are lots of folks out there who don't have a clue about all the workings you explained in detail.

 

Reps from me as well Frantz!!

 

I'll 3rd that. Frantz brings the dealers perspective and he brings it honestly. Its the other half of the transaction and its one many of us know little about.


Thanks Frantz

 

93Cobra I went to your Craigslist ad and with your truck as a trade in I would expect to get anywhere from $34-36k and if I were selling it to an individual, I would start around the price you have listed but would consider taking as low as $41-42k to get it sold.
No disrespect meant. Just an observation from someone that's been there and done that A Lot.

 

I had this exact same truck and traded it in for TradeIn Marketplace price with no issue. Now that I have to do a second time, it is magically $9k different? I have bought and sold many, many vehicles... new and used. I fully understand the game and how numbers work. My beef is purely on the trade value. In the bigger picture, if the dealer wanted to give me that on trade, that's fine, but the vehicle I buy better have a $9k deduction. No trade in estimator gets anywhere close to $34k.

 

Frantz,

I am curious/wondering...
why is actual cash value typically much less than the trade value given by KBB, Edmunds, Blackbook, etc...?

It seems like such a discrepancy causes many of the issues and bad raps dealers receive when a customer trades a vehicle.

Also the vast difference in what dealers offer for the exact same vehicle. for example, I was looking to trade my truck in. dealer A offered $4000 more than dealer B without even a negotiation. The Dealers are just across town from each other. I was looking at buying the same truck from both (they both had a truck with the exact same options and price). they both offered the same purchase price

I’m sure you can see why the average joe customer feels like he/she is getting screwed by the dealer.

thanks for the insite

 

PM me if you want the contact info for a fair salesman in Ohio that deals in SuperDutys. I traded in 3 vehicles in the past 3 years and was treated well each time.

 

I honestly don't know why the KBB and others tend to run high. I believe they are based on retail - retail. Certainly if they showed ACV and you went in planning on paying MSRP a dealer is gonna make good money. You may also be surprised just how many deals go through at MSRP. I have seen that trucks tend to have a bigger ACV to KBB value discrepancy than cars, which sorta supports the idea as the more expensive a vehicle is the more profit is built in, and normally folks trade trucks in on trucks. This overall system worked pretty well until the internet changed everything. All of a sudden, a savvy customer was buying their vehicles at wholesale pricing, new and used. So while the retail values have been high on used, the trade in values have to be low enough to support the industry. The fact that many folks reading this would consider invoice pricing paying too much shows just how tough it's come. I don't just tell folks invoice, I show em. Heck, sometimes I show em the whole gambit, and they still seem to expect more. The problem is these vehicles aren't cheap.

Perhaps some of this will help, though it's just a perspective of a salesman. I get paid on the front and back end of deals. The front end is the profit on the truck, the profit on the trade, any accessories, any upfits, and some of the paint/fab products. The paint/fab isn't eligible on commercial stuff, I give folks ACV for their trades, I sell at invoice, and accessories and upfits I only add enough to cover my time to take the vehicle to 3rd party venders to get the work done, ie, for a bedliner that I get charged $475 for, I charge $500. So basically on the front end I try to hold the holdback and that's it. Back end is what we get for arranging the financing and any warranty you get. I encourage folks to get me a rate and let me beat it, so that way I'm making money using my banks, but you're keeping us honest by actually working to get you a good rate. Generally we make a few hundred bucks on warranty. Of all the profits we make I get a percent (more on front than back).

So ACV... as I said, if I have a customer who wants to know the value and I need to pitch a ballpark I usually take a few hundred bucks off "fair KBB". and that tends to keep me on the straight and narrow (and works in the example on the Raptor). As I said, it represents what I can get a similar vehicle for at auction. People think of trades "wrong". We are trying to sell you a new car, and you are trying to sell us a used car. So yes, we want it as little as possible. Once I'm givin an ACV of a used car, if I were to choose to offer less, that offset actually gets counted as profit towards the new car. If I go over the ACV, then I'm docked that amount off that profit. ACV is the barrier between the the deal you get the car in, and the balance you own the car for. After all, if I talked Cobra into giving up his Raptor for $30k, and it sells for $40k after $1500 shop bills, does the guy selling it deserve to get the extra money because we got it under value? Not to me. I could lose $2000 on the new car deal and still end up with $2k profit because of holding value on the trade.

Of course it's still not black and white. It is possible one dealer is really good at something another is not. We don't carry many Mustangs. The one dealer 20 min away always has a ton. They may well give more for a used one because thats more than market. Or maybe they will show less because it's a chance to make more money. A first pencil offer may well be under ACV. As I've said before, your best position is when you're there ready to buy. If you got a better trade value at the first shop, they may have other ways they plan to make money back. Plenty of dealerships can beat my good pricing, but you may pay a ton more for warranty or other products. Even if not everyone says yes, so long as enough get enticed by the selling price, they can pad the deals on the back end. Our least favorite thing is a "shopping customer". I tend to turn them away. If the only way I can earn your business is a price, it's really not worth my time if you can't simply make an offer within a few hundred bucks. I know the next dealer will beat me by that much, so it's just not worthwhile. I'd honestly rather the guy down the street rip you off than let you get a really good deal from him if you're going to waste my time. There really is not good way to compare, hence I say you're best just trying to find a dealer you like and working out what you think is a fair deal. Don't get me wrong, we are trying to make as much as possible. I just try to have a long term approach to it, and I don't quite have the evidence to support that it works. I get more and more repeat business each month, but I need quite a bit more to make it a proof, though I'm encouraged (sometimes).

Sorry if this got disjointed... it's a scotch night!

 

The shop fee is the only thing I can actually question Frantz. I'm sure that's an average on the average vehicle. However, dealers don't take into account when a vehicle needs nothing when traded on that rare occasion when that's the case. I know you've likely heard it a thousand times and most often it's wrong... but there are some vehicles that need ABSOLUTELY NOTHING to get ready to resell after a trade. I always said, the only used vehicle I'd buy is one that I just traded. I've seen tons of examples of "like new" and "excellent" condition. None of which are even close to my vehicles on an average rainy day. Then I get people asking me all the time, on days when I think my vehicle is way beyond needing a wash and detailing, how I like my "new truck." Well, it's almost 5 years old, but yeah, I like it just fine. I'll like it better when I get home and give it a bath...LOL. Anyways, that's one bug I have about dealers. There is that rare OCD owner who's truck literally needs $0 spent to flip and that is never taken into consideration. I guess I went long too but I'm into the vino instead of Scotch...