Quote:
Originally Posted by rounder
I bought a car for my wife about a month ago. It was used and had 2,0000 miles on it. She did not need a new car but it seemed like a good deal.
I looked up the Blue Book value of our trade-in car based on miles and condition and it said $5,000.
The car store offered to go down in price by $1,000 and give us and extra $1,000 over the blue book value. I think that was partly related to the fact that we had done business with them before.
The lesson for me was that Blue Book means something, but that it is just an indicator, not the end of the process.
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In your case the book was used to make you feel better about your purchase. I assure you the dealer had way over $2k extra in the car.
I am pretty trusting when it comes to people telling me stuff, including my bosses. The most profitable car I ever sold was not a $110k out the door car, it was a $13k out the door car. I was told we had about $1500 in the car, meaning a margin of $1500. The couple asking about the car were limited in finances so I went and asked for $1250 off the car. The manager asked the service director to see if "he could help out" with the car and keep the costs down. The service director nodded seriously, I totally bought the act, and I went and sold the car.
After the car left another sales guy came over and noted "that was a good car". I agreed - I liked it so much I considered buying it for myself. "No, I mean, that's a good car." "No, I had maybe $250 left in it." "Just check the sheet when it comes out" (the sheet that has original cost, repair costs, and net margin.
I think the dealer made like $5k on that $13k car. I was expecting to get maybe $175 (our flat fee), instead I got close to $1000 for various things.
On the full margin $110k car I sold I think I made $750 or so.