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