| Note: The following refers to pre-owned | | | | Only the owner of a particular vehicle |
| vehicles. Generally, the only variations | | | | can determine how much profit(or |
| in the "cost" of a new car to franchise | | | | loss!)is acceptable in a deal. Often it |
| dealers is in destination or shipping | | | | is the crushing weight of time and |
| fees. An additional variation for buyers | | | | depreciation that determines how much a |
| is the notorious 'doc. fee', which | | | | vehicle will eventually sell for, |
| varies widely by dealer. | | | | whether it is a dealer or private-party |
| Let's take two cars, identical in every | | | | sale. An acceptable offer today is sure |
| way. The first one has cost the dealer | | | | to be lower than it would have been a |
| $13000 to acquire, between the expense | | | | month ago--to the seller--but a great |
| of the vehicle, the necessary work to | | | | deal a month ago is still a great deal |
| prepare it for sale, new brakes and | | | | today for the buyer. |
| tires, etc. The second one has cost | | | | Generally, those folks who are members |
| another dealer $12000, with all | | | | of the 'A' group become that way as a |
| identical work being done. These cars | | | | result of the continuous stream of bad |
| are on sale for the Kelley Blue Book | | | | car buying advice they have received |
| retail price of $15995. You have | | | | since birth. They feel cheated every |
| determined, through your research, that | | | | time because they are conditioned to |
| a very good price would be $14500, and a | | | | believe that it is the sellers objective |
| great price would be $14000. Both | | | | to cheat them rather than to simply make |
| vehicles are eventually purchased for | | | | a profit. And while this may seem like |
| $14000. Dealer A has made a profit of | | | | just two different ways of looking at |
| $1000, dealer B has profited $2000, and | | | | the same thing, it is the folks who can |
| you have purchased the vehicle for a | | | | focus on the factors they can control |
| great price. Now, let's say that you | | | | who will ultimately be 'driving happy'. |
| purchased yours from dealer B and have | | | | Buyers need to understand how to do |
| somehow found out the specifics of both | | | | proper research in order to determine |
| of these deals. | | | | what a great price would be on a given |
| Do you feel | | | | vehicle, how to formulate an acceptable |
| A) angry that your dealer made more | | | | offer, and how to execute the deal |
| money on your deal than the other dealer | | | | efficiently. There is a lot of bad |
| made on the other dealor | | | | information out there for buyers and |
| B) extremely happy knowing that you | | | | tools like the Kelley Blue Book require |
| bought your car at a great price. | | | | real training to use properly. In fact, |
| If you answered 'A', you are suffering | | | | the raw KBB numbers work to the |
| from 'beat the dealer' syndrome, a | | | | advantage of the seller every single |
| self-destructive, ultimately | | | | time, so folks using those numbers to |
| self-defeating attitude about life in | | | | build their budget are doing themselves |
| general that requires that someone else | | | | a disservice if they do not learn more. |
| must lose in order for you to win. You | | | | A dealer or an individual should |
| will never be happy in any deal of any | | | | determine when they will sell a vehicle |
| kind, because you will always worry that | | | | at any given price. A buyer should |
| you 'left something on the table', that | | | | determine what a good price is on a |
| you could have gotten a better deal if | | | | given vehicle, then should offer to |
| only you had done something differently | | | | purchase the vehicle for that price or |
| or if everyone wasn't out to cheat you. | | | | better. If the research isn't sound, it |
| If you answered 'B', you understand that | | | | is possible to end up with a |
| the profit made on the sale of an | | | | conversation that goes something like |
| individual vehicle has nothing to do | | | | this: |
| with you getting a great deal. You are | | | | Buyer: " I'll offer you $10000 for this |
| halfway down the road to car buying | | | | car right now..." |
| serenity. | | | | Dealer: "Fantastic! Just sign here and |
| These two entirely separate topics must | | | | here and off you go...!" |
| stay separate in the minds of buyers. | | | | Buyer: "Um...on second thought... |