Quote:
Originally Posted by BrotherEastman
Okay, now that I know you'll be nice, let me ask you another question (being that you are a former dealer), with the market being more a buyers market these days, and knowing that your cars must be sold, why would you not want to deal with my offer? (remember, I have cash)
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A dealer has no more money (markup) to deal with in a demo as he does a brand new car with no miles.
His only incentive to give a better deal on it is to move a car with miles off the lot and get it off the floorplan. However since there is no more markup in those cars my experience was that 98% of the time the same deal could be made someone on a brand new car with zero miles as on a demo. Keeping in mind that the dealer markup is probably around 10% (you can check at
www.kbb.com as I mentioned earlier) he probably only has about $2000 markup plus any rebates or factory to dealer incentives. Therefore on a $21,000 list car his invoice is probably about $19,000. Lets assume for a moment that GM has a $1500 rebate on the Impala (I have no clue if they do) and perhaps $1000 hidden dealer incentive to get rid of 07's. That would take his cost from $19,000 down to $16,500. That would make your offer still $2500 below his cost. That is unreasonable. Plus I have no clue as to if those extra rebates or incentives even exist for him and if not the difference is even greater.
For the kind of deal you are looking for you need to look at what are actually program cars as I described in an earlier post. There are some great deals there and they still have some factory warranty left and are eligible for factory extended warranties if you desire to purchase one.
For the kind of difference in list and what you are willing to pay a used program car is your best bet. Factory invoice does not really matter on these cars as they are technically used and have been bought at an auction by the dealer.
Most of the time you are better off buying a program car at a new car dealership that sells the same make new. I say that because many manufacturers have auctions of their make cars just for their dealers and many times those are the nicer program cars. There are exceptions to this though and many auctions are open to all dealers.
The things to look for in program cars are the number of miles, check for any body work that has been done indiciating accidents, and excessive wear in the interior.
Back in 2000 I bought what was probably an $18,000 when new 1999 Ford Taurus program car from a Ford dealer for $11,000.00. It had about 12,000 miles.
In February 2005 I bought a one year old 2004 Lincoln Town Car that new had a sticker of over $42,000 for just $25,000. It had 23,000 miles on it.
What will happen is that a dealer will go to auction and by a bunch of these cars. They will buy one or two with higher mileage. For example most one year program cars have 12,000-23,000 miles on them but occasionally one will have 24-29,000 miles. Those higher mileage cars sell for less at auction (usually at least $1,000-1500 less)and are used as the "price leaders".
The higher mileage program car is the one they usually use in the advertisements that will say something like "2007 Chevrolet Impala Program Cars. Ten to choose From". Then there will be a great price listed with the note below it that it is for a specific stock number. You can bet that particular stock number is one of the higher mileage ones and that they will want more for the ones with the lower mileage. That is normal. It is a mild form of switch and bait because the price will draw you in but once you get there for most people it is worth a thousand dollars more to get a car with 15-18,00 miles vs. almost 30,000.
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