Rant: Why do we even have trade and retail values anymore?

[dyllindd]

Good Day Everyone,

I apologise that this is basically just a rant about the dodge dealings of car dealers in South Africa.

I currently have a 2007 Mercedes Benz CLK 500. 125000km on the clock.

Trade Estimate: R167000
Retail Estimate: R200000

I still owe R157000. I was looking to trade it in on something else and did expect a slight shortfall as I know dealers normally offer below trade.(In order to fix the vehicle up prior to reselling).

Dealer offers ranged from R90k - R130k. In most instances the reason given was that the car is too old to obtain finance on (However Wesbank finances up to 25 years old) + No Maintenance Plan and No Warranty.

In most cases the cars that I looked at where selling between R30000 - R60000 above retail. Yet dealers aren't willing to negotiate on either the trade-in price or the car's selling price.

I personally have no empathy for dealers like this who end up closing up shop. Cars stand on dealership lots for months at a time yet no one is willing to make a deal anymore.

Is it just me or is anyone else experiencing this?

Please feel free to share your experiences.

 

[adamr]

For car dealers it's just a guide ... It's business supply and demand. they never have stuck to trade and retail values. But yeah they do offer well below trade and sell at retail. For some cars though they would offer more than trade (but this is more the exception)

For insurers it's used to determine payouts In the case of total loss

 

[eg2505]

I feel you OP, I sometimes just look at the prices dealers feel justified in asking for,

lets look at something from lower on the scale, a 2010 kia picanto
something quite common and basic, right?

NEW price for this car was 74K dealers today what that price, on the same car, even after 157000Km
some even ask for more, its simply a ripoff, how can they even sell anything?

https://www.autotrader.co.za/used-c...anto-1.1-fpa-8bbb7546ed0040d89905e687bef6b75f

https://www.autotrader.co.za/used-c...-striker-fpa-e178dc9e65274e9e9b49fbc607a55050

https://www.autotrader.co.za/used-c...anto-1.1-fpa-f7579e56bc3f404eae14762c7f337f1f

https://www.autotrader.co.za/used-c...anto-1.1-fpa-e76d9800a61e439e811ba138a769e69a

in all honesty OP, its simply lets try to rip you off as much as we possibly can and offer you as least as we can,
its become the new south african way, no morals or standards, just how much can we squeeze from you without you walking AWAY

 

[dyllindd]

For car dealers it's just a guide ... It's business supply and demand. they never have stuck to trade and retail values. But yeah they do offer well below trade and sell at retail. For some cars though they would offer more than trade (but this is more the exception)

For insurers it's used to determine payouts In the case of total loss

Thanks Adam, I am aware of the values needed for insurance payouts. I am still willing to accept that the amounts are used as guidelines. But just the sheer unwillingness of dealers to negotiate anything anymore is what gets my blood boiling. I realise that everyone needs to make a living but I have seen too many times where a dealer gives a son story and the customer trades at the low offer. Then that dealer turns around and sells the vehicle for between R70k - R150k profit. So I don't buy the sob stories they spin you about their profit margins being very mininal.

 

[adamr]

Thanks Adam, I am aware of the values needed for insurance payouts. I am still willing to accept that the amounts are used as guidelines. But just the sheer unwillingness of dealers to negotiate anything anymore is what gets my blood boiling. I realise that everyone needs to make a living but I have seen to many times where a dealer gives a son story and the customer trades at the low offer. Then that dealer turns around and sells the vehicle for between R70k - R150k profit. So I don't buy the sob stories they spin you about their profit margins being very mininal.

Agree they do lie about only making small margins. Truth is they making on a cheap car nothing under r50k profit.

 

[dyllindd]

Are we allowed to name and shame ;-)

 

[adamr]

Are we allowed to name and shame ;-)

Mention it ...but all dealers most in fact practice well below trade and sell at retail. This has all become normal practice

Edit: what I do loathe is scalping and charging massive premiums on supposedly sought after cars ...

 

[Mike Hoxbig]

For car dealers it's just a guide ... It's business supply and demand. they never have stuck to trade and retail values. But yeah they do offer well below trade and sell at retail. For some cars though they would offer more than trade (but this is more the exception)

For insurers it's used to determine payouts In the case of total loss

It's pretty much this.

What they do is to put the car out to other dealers in their network, and see who comes back with the best price. It's based on the probability of them firstly being able to sell your car, and secondly what they can sell it for.

If your car was something like a normal C-class, you may have gotten more for it because they could shift it relatively quickly. But since it's something that's a bit more niche, they predict it sitting with them for a while and hence a lower offer...

 

[Sinbad]

And this is why I buy old mercs privately

 

[rietrot]

Agree they do lie about only making small margins. Truth is they making on a cheap car nothing under r50k profit.

Those guys then also only sell one car a month. The guys really coining it has lower margins and push a lot more deals.

 

[Zukat]

As mentioned above, those values are just indication. Dealership use them as the benchmark, but more importantly is for them to estimate how long will the vehicle stand on their floor, so the less liquid the car is the less they will be willing to offer you to give a bigger room to play with lowering the price till its sold. With your particular vehicle it wont be an easy sell- heavy on petrol, expensive maintenance, hence the price...

 

[dyllindd]

As mentioned above, those values are just indication. Dealership use them as the benchmark, but more importantly is for them to estimate how long will the vehicle stand on their floor, so the less liquid the car is the less they will be willing to offer you to give a bigger room to play with lowering the price till its sold. With your particular vehicle it wont be an easy sell- heavy on petrol, expensive maintenance, hence the price...

Noted Zukat. I know mine is not the easiest to sell on. But I hardly see dealers lowering prices on their vehicles anymore. Take for e.g. Bram Fischer Drive in Randburg. Some of those second hand vehicles stand there for months, some covered in dust and needing a jump start. However, the price has remained at Rxxx since day one.

I know this is not so easy to do on a brand new car. But second hand dealers are just not coming to the table.

 

[seted]

No one wants to give me what I want. Poor me.

 

[dyllindd]

I actually traded in a 2004 C180k with 120000km on my present vehicle last year. Traded at R20k below trade value. Dealer was spinning the same b@ll***** story. Dealers ended up selling for R30k above trade. All in all a R50k profit.

 

[dyllindd]

Would be funny if it was only me. We are all getting shafted in this country.

 

[Pitbull]

Noted Zukat. I know mine is not the easiest to sell on. But I hardly see dealers lowering prices on their vehicles anymore. Take for e.g. Bram Fischer Drive in Randburg. Some of those second hand vehicles stand there for months, some covered in dust and needing a jump start. However, the price has remained at Rxxx since day one.

I know this is not so easy to do on a brand new car. But second hand dealers are just not coming to the table.

You should get a better deal if you trade it at a dealership you're buying from. Remember they need to think about money here. So if you just want to sell, they aren't making anything short term and need to think how long it will take to sell and offer accordingly. Obviously with as much profit as possible (Low balling).

If however he makes money of the purchase of a new vehicle from his floor and takes in your vehicle he will be more lenient with regards to trade in or lowering the sell price. End of the day, if you put money in his hand today, even if just a bit, he'll be more accommodating.

 

[rietrot]

Would be funny if it was only me. We are all getting shafted in this country.

Nobody is shafting you. If you willingly bend over and take it, it is your own fault.

 

[dyllindd]

You should get a better deal if you trade it at a dealership you're buying from. Remember they need to think about money here. So if you just want to sell, they aren't making anything short term and need to think how long it will take to sell and offer accordingly. Obviously with as much profit as possible (Low balling).

If however he makes money of the purchase of a new vehicle from his floor and takes in your vehicle he will be more lenient with regards to trade in or lowering the sell price. End of the day, if you put money in his hand today, even if just a bit, he'll be more accommodating.

Thanks @Pitbull. The offers received were all at dealers where I wanted to trade in on one of their vehicles.

The only thing I don't appreciate is when salesmen start to get defensive as soon as you mention the concept of negotiation.

 

[Mike Hoxbig]

Thanks @Pitbull. The offers received were all at dealers where I wanted to trade in on one of their vehicles.

The only thing I don't appreciate is when salesmen start to get defensive as soon as you mention the concept of negotiation.

Negotiate with your feet by playing one dealer against another. Make it clear that you're not as desperate for their car as they are for your business...

 

[dyllindd]

And this is why I buy old mercs privately

Got one if you're interested ;-)