How much value is behind Low KM's on a used car?

[APoc184]

Do you think I could get the dealership to do the cambelt before delivery ? I havent fully paid for the car yet and the Cambelt is worrying me ... Or do you think I could get it at a discount rate? Like pay in R500 and they front the rest?

It is certainly worth asking them. I know plenty of dealerships give the car a service anyway before they sell it again.

 

[HeftyCrab]

People should also remember that when a car stands for a while without being used that certain rubber parts and seals can perish. Dont know how long it will take though.

On the topic of mileage, what my Father does is buy a car with 100 000km, then ride it for 10 years. If he has to he pays a good mechanic hes used for years a few grand to overhaul the engine around 250000-300000km. Sometimes he doesnt have to. Cars can go much higher than 100000km. This could be harder to do with the new hi-tech cars where the engines cost R60000 to repair.

On that topic, do you guys feel that newer cars are becoming more reliable due to technology? Or are are they being value engineered into the ground so that they only last a certain amount of years before you have to buy a new one. That could make a difference when it comes to buying an older car.

 

[Rouxenator]

True, it's more than often more than 15%. The 15 - 20%+ difference is between what a private seller would sell for, vs what the dealer would sell the same thing for.

Source?

 

[PostmanPot]

Source?

It's common knowledge. If dealers offered good trade-ins in general, people would not resort to selling privately in order to get as many funds out of their vehicles as possible. Why do you think people go through the 'schlep' of selling privately?

Selling privately will score at least 10% extra above a trade-in offer, more like 15 - 20% in most cases.

Considering that a dealer charges at least 10% above private sales, it's quite easy to grasp that they have around 30% markups in place on trade-ins they offer.

 

[Deago999]

It's common knowledge. If dealers offered good trade-ins in general, people would not resort to selling privately in order to get as many funds out of their vehicles as possible. Why do you think people go through the 'schlep' of selling privately?

Selling privately will score at least 10% extra above a trade-in offer, more like 15 - 20% in most cases.

Considering that a dealer charges at least 10% above private sales, it's quite easy to grasp that they have around 30% markups in place on trade-ins they offer.

That is true - literally sold my old car like 4 days ago - dealer wanted to give me R30 000 for my 2008 CitiSport with 84000km on the clock, sold it privately and got R49 000 - could have pushed for more but it was an easy sale. Thats a big difference.

 

[PostmanPot]

That is true - literally sold my old car like 4 days ago - dealer wanted to give me R30 000 for my 2008 CitiSport with 84000km on the clock, sold it privately and got R49 000 - could have pushed for more but it was an easy sale. Thats a big difference.

Excellent. I once sold a car for R15,000 the day after I was offered R5,000 as a trade-in.

Anecdotal cases aside though, let's wait for Roux to humour us.

 

[Deago999]

Excellent. I once sold a car for R15,000 the day after I was offered R5,000 as a trade-in.

Anecdotal cases aside though, let's wait for Roux to humour us.

Yeah there is no 2 ways about it - but the extreme measures you have to go to sell privately, is exhausting, not being able to trust people, worrying if the payment is going to bouce, worrying about the car and hope it doest fail, filling out the forms, sitting at municipality for change of ownership.... its stressful... so stressful....

and I hate the way dealersr only offer you book value, and when they come to sell it do they only take features, and KM's etc and add it to the price... makes me so angry

 

[Rouxenator]

Anecdotal cases aside though, let's wait for Roux to humour us.

When trading in - yes - it is a fact they will give you at least 10% less of what they will sell it for. I even made a post about my experience regarding this 5 years ago : http://mybroadband.co.za/vb/showthread.php/244383-How-much-do-dealers-profit-on-trade-ins

Taking into account the schlep is saves me I'm still happy with it. It gives me the ease of driving to the dealer with my old car, leaving it with green paper and spare key and driving off in a new car. The old car being a deposit on the new one.

Where I call shenanigans is claiming that dealers sell cars at a 15% premium. On-road and admin fees excluded the prices are market competitive.

 

[PostmanPot]

Yeah there is no 2 ways about it - but the extreme measures you have to go to sell privately, is exhausting, not being able to trust people, worrying if the payment is going to bouce, worrying about the car and hope it doest fail, filling out the forms, sitting at municipality for change of ownership.... its stressful... so stressful....

and I hate the way dealersr only offer you book value, and when they come to sell it do they only take features, and KM's etc and add it to the price... makes me so angry

Agree with you. One needs to be quite street smart when it comes to the trust issues, that there certainly are. It's imperative to build up a good rapport beforehand.

But having done the whole schlep of documents done, I can honestly tell you it was a breeze. MyBb helped tremendously. I even bought my car in another province which take a little extra work.

The benefits are so worth it though.

Absolutely correct, and we have people who think that dealers are always acting in their best interests. If they can screw you with trade-ins, they can screw you with maintenance. Not saying they're all bad, though.

 

[PostmanPot]

When trading in - yes - it is a fact they will give you at least 10% less of what they will sell it for. I even made a post about my experience regarding this 5 years ago : http://mybroadband.co.za/vb/showthread.php/244383-How-much-do-dealers-profit-on-trade-ins

What you're referring to is the lowest they'll go, especially after a car has been sitting on the floor for a while. It is completely variable according to cars, brands, dealers, client waiting list, clients buying new cars, clients wasting money by selling as the car reaches 100,000km/5 years etc., of course, but generally speaking, they are not giving people 10% less than what they, the dealers, are selling for.

Taking into account the schlep is saves me I'm still happy with it. It gives me the ease of driving to the dealer with my old car, leaving it with green paper and spare key and driving off in a new car. The old car being a deposit on the new one.

But you're pissing away money. And the schlep is overrated, IMO.

Where I call shenanigans is claiming that dealers sell cars at a 15% premium. On-road and admin fees excluded the prices are market competitive.

Nonsense. Market competitive? To a degree, when they absolutely have to. Who is the market, the other dealers?

Do you not spend much time looking at private vs dealer car sales and their pricing?

 

[Rouxenator]

But you're pissing away money. And the schlep is overrated, IMO.

I am more the kind of person that pays for a service that saves me time and effort. I'd rather spend my time doing things I like than schlep stuff. If there are more than two people at my bank's ATM I use another bank's ATM. I don't queue for fuel if the price goes up because that R50 I am saving on a tank is not worth my time. You get the picture.

Do you not spend much time looking at private vs dealer car sales and their pricing?

Correct. I only look at dealer cars, and no ex-rental or fleet cars. Private is too much effort and risk for me. Yet I am fully aware that trading-in price is lower than selling privately, that's fine by me.

 

[PostmanPot]

I am more the kind of person that pays for a service that saves me time and effort. I'd rather spend my time doing things I like than schlep stuff. If there are more than two people at my bank's ATM I use another bank's ATM. I don't queue for fuel if the price goes up because that R50 I am saving on a tank is not worth my time. You get the picture.

And I'm similar in many ways. You are talking tiny amounts, a car is a substantial amount, in many cases, huge relative to one's position.

Correct. I only look at dealer cars, and no ex-rental or fleet cars. Private is too much effort and risk for me. Yet I am fully aware that trading-in price is lower than selling privately, that's fine by me.

That is why you are incorrect about pricing.

 

[Rouxenator]

Which is why I say you should keep a car as long as possible. My last trade it was done for R30k, privately I might have gotten R38k after fixing the chip in the windscreen and fitting some new tyres as the ones on the car were badly worn. Add to that if something does go wrong a few months down the line I could face a lot of crap under the consumer protection act.

Obviously if you have cars that are valued more it will be worth your while to try and sell it privately, otherwise just keep on motoring until it is worth less.

 

[PostmanPot]

Which is why I say you should keep a car as long as possible. My last trade it was done for R30k, privately I might have gotten R38k after fixing the chip in the windscreen and fitting some new tyres as the ones on the car were badly worn. Add to that if something does go wrong a few months down the line I could face a lot of crap under the consumer protection act.

Obviously if you have cars that are valued more it will be worth your while to try and sell it privately, otherwise just keep on motoring until it is worth less.

Keeping a car as long as possible is the same as buying new, in terms of depreciation and loss.

There's a point where it does not become sensible. I would say that the point is 150,000km, and to an extent, 200,000km depending on the car.

 

[Pitbull]

Keeping a car as long as possible is the same as buying new, in terms of depreciation and loss.

There's a point where it does not become sensible. I would say that the point is 150,000km, and to an extent, 200,000km depending on the car.

I don't agree with this.

That was pointed out earlier in this thread. Cars only depreciate up to a point. Someone used an example of a Mk1 golf 1980 odd still being sold for around R 40k. So 150 000 or 350 000 that car will not fall lower than that unless it's completely farked. I would rather drive 10 years without car debt than drive a newish car every 5 years. That's just my personal opinion. I can easily drive a car for 20 years if it lasts that long

 

[PostmanPot]

I don't agree with this.

That was pointed out earlier in this thread. Cars only depreciate up to a point. Someone used an example of a Mk1 golf 1980 odd still being sold for around R 40k. So 150 000 or 350 000 that car will not fall lower than that unless it's completely farked. I would rather drive 10 years without car debt than drive a newish car every 5 years. That's just my personal opinion. I can easily drive a car for 20 years if it lasts that long

Cars depreciate up to a point, but that point is within a certain range of kms. There may be little difference in/on the book/system between 150,000km and 200,000km. But there's obviously, without considering the book, a huge difference in value between 150,000km and 250,000km.

Also, this is when dealers are concerned. Selling privately i.e. where one maximises their money, which is what this is focussing on, and no one will want to touch something with high mileage, let alone pay the same amount for high mileage vs very high mileage... The book is insignificant to the private domain.

 

[Pitbull]

Cars depreciate up to a point, but that point is within a certain range of kms. There may be little difference in/on the book/system between 150,000km and 200,000km. But there's obviously, without considering the book, a huge difference in value between 150,000km and 250,000km.

Also, this is when dealers are concerned. Selling privately i.e. where one maximises their money, which is what this is focussing on, and no one will want to touch something with high mileage, let alone pay the same amount for high mileage vs very high mileage... The book is insignificant to the private domain.

But that's exactly the point I agree with Roux with. I don't view buying cars as a means to try and salvage as much of a trade off it as I can. I buy it as new as I can afford. Then drive it till it's got no more drive left in it before I replace it. I don't buy to resell and buy another again. If I buy a car at 50 000 I don't buy it to drive it till 150k and sell it. I drive it till it clocks, gets written off or just can't be repaired no more.

I guess it varies from person to person. My father in-law drives a new car every 2 - 3 years. He has had car debt since he started working. I have had car debt now for I would say about 6 years total since I started working. If my bakkie wasn't totalled I would have now been car debt free till the day that bakkie could not be repaired no more. I'm sure that would have been easy another 10 - 15 years. Fate dealt me a hand and now I'll buy one again, pay it off and drive it till it's wheels fall off.

Just me though.

 

[PostmanPot]

But that's exactly the point I agree with Roux with. I don't view buying cars as a means to try and salvage as much of a trade off it as I can. I buy it as new as I can afford. Then drive it till it's got no more drive left in it before I replace it. I don't buy to resell and buy another again. If I buy a car at 50 000 I don't buy it to drive it till 150k and sell it. I drive it till it clocks, gets written off or just can't be repaired no more.

I really do understand, and I cannot fault this if you are happy with it. The bottom line though is that you are losing out on a lot of money. All one needs to do is consider your input cost vs output cost. This is the way in which it is the same as buying new (regarding depreciation/money lost). My approach is far more savvy, and it's worth the extra effort.

 

[rorz0r]

I would view less than 25000km/year as average as most motorplans etc seem to equate on about 20000km/year eg. Mercedes 120000/6yr, BMW 100000/5yr.
My previous car I bought on 100,100km at pretty much 5yrs so "optimal" usage etc. Overpaid on it a bit when it came to extras etc though so I lost out a bit more when selling, but the guy buying got an awesome deal. Super clean awesome car for dirt cheap. I bought for 240k and sold for 170k 19000km later, trade in offer was 150k. Previous car I was offered 50k as trade in and sold it for 110k (after buying for 155k and doing 46000km)
Current one is 2 yrs old this month and its on 18600km. I had another car from new and sold it on 22000km, can't remember trade in offers but it was worth selling privately and the buyer still got an excellent deal, around 40% off retail for 22000km.

 

[SauRoNZA]

But that's exactly the point I agree with Roux with. I don't view buying cars as a means to try and salvage as much of a trade off it as I can. I buy it as new as I can afford. Then drive it till it's got no more drive left in it before I replace it. I don't buy to resell and buy another again. If I buy a car at 50 000 I don't buy it to drive it till 150k and sell it. I drive it till it clocks, gets written off or just can't be repaired no more.

I guess it varies from person to person. My father in-law drives a new car every 2 - 3 years. He has had car debt since he started working. I have had car debt now for I would say about 6 years total since I started working. If my bakkie wasn't totalled I would have now been car debt free till the day that bakkie could not be repaired no more. I'm sure that would have been easy another 10 - 15 years. Fate dealt me a hand and now I'll buy one again, pay it off and drive it till it's wheels fall off.

Just me though.

Yes if you work it backwards as a monthly cost over the life of the car then it will still be cheaper to keep the car longer than to buy/sell in between.

It's all about your per km cost at the end of the day really.

If I buy a 2010 model now for R200 000 and drive it for another 5 years until 2020 and sell it for -50% at R100k it would have cost me R10 000 per year or R833 per month. Now I buy another car in 2020 for R200 000 with my R100k deposit and drive it until 2030 and I've spent R1250 per month on cars over 20 years.

If I had kept the 2010 model throughout I would have paid only R833 per month. If I sell it for R50k then it's total ownership cost was R625 per month.

Obviously extreme examples and there are a LOT more variables to it than this but you get the idea.