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Old 09-24-2012, 12:43 PM   #261
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Old 09-24-2012, 12:52 PM   #262
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^I love you.
This a million times over
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Old 10-05-2012, 11:04 PM   #263
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Originally Posted by Altis View Post
Not sure if it's been mentioned yet, but it's normal for American cars to hold their value less than Japanese cars, for example. However, I did get around $5k off sticker and 0% financing or so, compared with Honda, who wanted to charge 3.9% interest and would barely take off $1k from sticker.

In the end, it kind of balances out, IMHO. Cars aren't investments... I'd happily deal with lower resale value as an extra sort of cost of owning a Focus over something like a Civic or Corolla...
But, lower resale value from what original price? Your losing money, but how much from purchase price? Honda civic@27900.oo with 5 year trade in of 15750.00 compared to a focus at @24900.00 with a 14900.00 trade in. Focus has lower trade in value, but loses less money. Who has the better deal? The focus carries a higher residual value than the civic, even though the figure was 850.00 lower. Focus was the better deal.

Bill
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Old 10-06-2012, 04:15 AM   #264
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You guys got this ALL wrong... Comparing MSRP when new to the Dealer trade in value isn't a fair comparison. They're not even the same type of pricing.

MSRP - the RETAIL price on the sticker suggested by ford..

Dealer Trade In - This is the recommended WHOLESALE price paid by a dealer to purchase a used car to add to their inventory, which they will mark up significantly to sell at USED RETAIL to the next owner. The trade in estimate is often times close to what a dealer will pay for a car at auction or what they pay for a car when buying a car from another dealer...

the difference between these two is going to ALWAYS be very steep.. otherwise the dealers don't make a profit when they sell it as a used car.

Compare the MSRP (or your actual agreed on purchase price to the PRIVATE Party Sale numbers... Or the Suggested Used Retail Price to make a fair comparison...

And still ... ALL new cars drop like a ROCK. Thats why you buy USED.... and let the first owner take the hit... and negotiate to pay as close as you can get the dealer to go to Trade-In value when you buy it...

A little more behind the scenes info....

A new car dealer makes his profit in the following order...

1. Service Department (this is where they make the most money)
2. Finance Office (they make more on the financing of a new car than they make on the car itself) Why do you think they push leases so much, they hate it when you pay cash... since it eats away their profit.

3. Used car Department. This is why the trade in value is so crappy compared to the MSRP of the car when new... its manipulated by the NADA in order to maximize profit on that car when the dealer Re-Sells it. They would rather have you buy a used current year than a showroom new current year. (if they can get you to finance that used car when you buy it, they make even more...

Example... A 20000 new car.. has an invoice price of 16500.. which the dealer essentially leases until it is sold.. the first owner talks em down to 17ish lets say...
6 months later.. the first owner trades it off and gets a trade in of 11500...
Then that dealer puts it in the used lot with a sticker price of get this... 17995... which the next owner talks him down to say 15995... so now the dealer gets almost a 4500 profit selling it used.. Where when that same dealer sold that same car "NEW" he would have only made a potential of 500 or maybe 750 dollars profit (if he's lucky)... THIS is why the trade in vaule drops SO much.. most people will buy used over new, since its usually cheaper... this is not a game.. this is done by DESIGN.....

The new car they will try to get you to lease....
Once sold as a used car.. they will try to get you to take out a standard loan on it...

Heres why...
As you can see above.. the average car dealer will make usually less than 1000 dollars on the sale of a new car.. (according to a report relesed by NADA at one time its $82.00 profit on average for the car itself...)

If they can get you to finance the car with traditional payments, the contract is then sold to a bank or something like Ford Motor Credit, and the profit margin jumps from $82 dollars on average to around $800 dollars on average...Plus they get a cut of the interest that loan accrues...

If they can get you to lease, that lease contract when sold to Ford Motor Credit (or who ever its leased through) pushes the profit margin to as much as $1700...

bottom line.. Buy it Used after it is about a year old... negotiate the hell out of it.. and pay cash..
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Old 10-06-2012, 07:26 AM   #265
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^^^This. This is why we will never be able to buy a new car online, whether through Ford or a third-party. The dealership wants to retain the control.



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Old 10-06-2012, 09:38 AM   #266
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Quote:
Originally Posted by Chaddz3 View Post
You guys got this ALL wrong... Comparing MSRP when new to the Dealer trade in value isn't a fair comparison. They're not even the same type of pricing.

MSRP - the RETAIL price on the sticker suggested by ford..

Dealer Trade In - This is the recommended WHOLESALE price paid by a dealer to purchase a used car to add to their inventory, which they will mark up significantly to sell at USED RETAIL to the next owner. The trade in estimate is often times close to what a dealer will pay for a car at auction or what they pay for a car when buying a car from another dealer...

....

bottom line.. Buy it Used after it is about a year old... negotiate the hell out of it.. and pay cash..
Glad someone finally pointed that out.

And to the buying used and paying cash... This isn't always an option. I would say peeps need to weigh their options based on their own financial situations and priorities. After being burned on used cars a few times, I lean heavily towards buying new (read: not "abused, neglected, then dumped when the miles are still relatively low"). To me, the first year or two of ownership that are GENERALLY issue-free are worth a premium.

....Not that I'm willing to pay a ton more for new, mind you. I financed $16,600 for my new SE Hatch, I bought my 2008 Ducati new (with a full factory warranty) as a 2-year-old leftover for 66% of MSRP. Gotta shop! But I worry about how a vehicle was abused by someone who fully intended to get rid of it within a year of purchase... even before he/she leased it.
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Old 10-06-2012, 10:17 AM   #267
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Quote:
Originally Posted by CajunR View Post
Glad someone finally pointed that out.

And to the buying used and paying cash... This isn't always an option. I would say peeps need to weigh their options based on their own financial situations and priorities. After being burned on used cars a few times, I lean heavily towards buying new (read: not "abused, neglected, then dumped when the miles are still relatively low"). To me, the first year or two of ownership that are GENERALLY issue-free are worth a premium.

....Not that I'm willing to pay a ton more for new, mind you. I financed $16,600 for my new SE Hatch, I bought my 2008 Ducati new (with a full factory warranty) as a 2-year-old leftover for 66% of MSRP. Gotta shop! But I worry about how a vehicle was abused by someone who fully intended to get rid of it within a year of purchase... even before he/she leased it.
I agree, you never know what the previous owner has or has not done to the vehicle. If a vehicle is only a couple of years old and on a lot used, most likely something is not legit...

Anyone who tries to say that a vehicle's MSRP is $x and the dealership only offered my $y to trade it in needs to come to grips with negotiation. If you pay full sticker and then trade in with the dealers initial offer, you are only reaping what you yourself have sown.

Current prices in my area show that a 2013 5dr Ti is selling below invoice...almost the same as when I bought my Ti earlier this year.
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Old 10-06-2012, 10:32 AM   #268
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Quote:
Originally Posted by CajunR View Post
To me, the first year or two of ownership that are GENERALLY issue-free are worth a premium.
Which is, of course, exactly _why_ those first couple of years drop off more than later years. Many people agree with you, and loss of that premium makes the price fall off faster in the first year or two.

No new car "holds value" in the sense that you're going to be able to sell it for anything like you paid for it after a couple of years. Plan on using up half the purchase price in those two years.
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