Used car trade-in values plummeting

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Fri 9 Dec 2011 14:38
Used car trade-in values plummeting - MikeTorque

Used car trade-in values are plummeting due to low volumes, low turnover and high used car stocks. Apparently what is happening is dealers are offering customers substantially below book price and increasing their profit margin when the car is sold on their forecourt.

The reason apparently is to ensure dealership profit margins are maintained due to low volumes/turnover & high used car stocks at this time of year. Also more aggressive hard selling are being fronted by some used car dealers to try to get customers to purchase a car ASAP such is the desperation of dealers to sell cars.

For example, typical trade-in value for an excellent condition used VW Golf, Glasses prices quote £10650, trade-in offer would be £9300 from a VW dealer. The dealers often use Glasses valuations for their guide price. The car then goes on sale for around £12000.00, a premium of £2700 up on the trade-in value offered to the seller. Normally a typical margin would be around £1500 for this value of vehicle but now it's been increased by over £1000. Take it or leave it seems to be the norm or sell privately for a better price is the advice being given.

So how does a customer negotiate to purchase a used car or new car when they have an excellent condition trade-in for part exchange and they are faced with these types of trading conditions ?

Edited by Avant on 12/12/2011 at 21:21

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Fri 9 Dec 2011 15:27
Use car trade-in values plummeting - oldroverboy

I would say that taking into account Vat and overheads it's not such a good margin. How many times did I see cars that came in as PX's require large amounts of work before they could go on the forecourt. Some ordinary customers think that exchanging their cosmetically good car in px is a way of not paying for that HGF failure, or that slipping clutch or new discs and pads etc etc, but a dealer is in business to make a profit, and certainly where i worked if a customer came in with a warranty problem, it got fixed. Once we had a seat ibiza which leaked like a sieve, and after many many hours of trying to fix it my boss said to the customer, can't do any more, if you want we'll take it back at what you paid and you can deduct that from another car if you want, did everything to sweeten the deal, and the customer decided to keep the car and that was that. But in defence of dealerships, they have certain standards to keep, and many of them are still paying heavily to the manufacturers each year to keep the franchise!

If you have a car that is "in demand", yes you'll get a better offer, but for mainstreet cars, not any more.

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Fri 9 Dec 2011 18:40
Use car trade-in values plummeting - bonzo dog

Hi Mike

Used car trade-in values are plummeting due to low volumes, low turnover and high used car stocks. Apparently what is happening is dealers are offering customers substantially below book price

You are quite correct

and increasing their profit margin when the car is sold on their forecourt.

You are quite incorrect.

You see as values are plummeting (& this is the second time today I've heard this expression) then dealers are having to be very cautious about what price they can offer the vehicle at - too high (giving them big margins) & they get no enquiries.

Plus, if they have to trade the car then the trade will only give them the going rate.

Sensible dealers aren't going to give daft money in the hope that some unsuspecting soul will pay over the odds. One I was with today let a customer walk because the price he offered wasn't acceptable.

At the end of the day it's only an offer, not a gun-point demand; the customer always has a choice

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Fri 9 Dec 2011 19:14
Use car trade-in values plummeting - daveyjp
Its easy, ignore what the guides say. Before looking to trade, do a search for your car at a main dealer. You trade in target figure is £1000-1500 less than this, but as we know the only figure which matters is cost to change.
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Sat 10 Dec 2011 11:14
Use car trade-in values plummeting - rayleck

Yes,quite agree. Went to trade in my car 2 weeks ago .What Car? said £13600,WBAC offered £14000,I was actualy offered £11500.Walked away.

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Sat 10 Dec 2011 13:05
Use car trade-in values plummeting - bonzo dog

WBAC offered £14000

When you say "offered" was this at their site, them having veiwed it?

If What Car say £13,600 & the dealer has offered you only £11,500 in PX I would say WBAC would be the one to definitely go for.

Let us know exactly how much they do offer you on site (my bet is £10,900)

Good luck

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Sat 10 Dec 2011 21:04
Use car trade-in values plummeting - unthrottled

I thought WBAC offered awful prices. It's pretty much the only way a business model like that is going to work! They're going to get a lot of grenades dropped on them...

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Sat 10 Dec 2011 21:55
Use car trade-in values plummeting - RT

It seems that WBAC will pay the initial attractive price but only if the car is EXACTLY as described - they do mark it down severely if the inspection finds anything not already declared.

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Sat 10 Dec 2011 21:57
Use car trade-in values plummeting - jamie745

WBAC would knock 90% off their offer because you didnt tell them about a stone chip. Pathetic waste of time them lot, i cant understand how anybody is desperate/stupid enough to sell a car as to do it that way.

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Sat 10 Dec 2011 22:03
Use car trade-in values plummeting - unthrottled

Dumping ground for anything with imminent DMF/HP fuel pump or clutch failure.

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Sat 10 Dec 2011 22:10
Use car trade-in values plummeting - jamie745

I can only assume businesses like WBAC only work these days because you have to pay to get your fit-for-scrap cars taken away. In the old days you'd wander into a scrap yard, he'd give you £50 and you'd be on your way so even if WBAC give you £150 for something which is about to go bang its still a decent deal.

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Sat 10 Dec 2011 22:14
Use car trade-in values plummeting - unthrottled

Not at all Jamie!

Scrap prices are buoyant again.

OTOH, WBAC's minimum offer is £50, but they reserve the right to charge a transaction fee of £49...

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Sat 10 Dec 2011 22:24
Use car trade-in values plummeting - jamie745

I suppose from WBAC's point of view theres always some utter pleb who sells them his Range Rover for £4.74, one of them makes up for 500 piles of scrap.

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Sun 11 Dec 2011 05:56
Use car trade-in values plummeting - RT

I know of a couple of guys who been given the initial price for their otherwise trade-ins - despite huge scepticism it was the best offer by some margin.

But as I say, their cars were accurately described.

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Sun 11 Dec 2011 11:56
Use car trade-in values plummeting - Roly93

It seems that WBAC will pay the initial attractive price but only if the car is EXACTLY as described - they do mark it down severely if the inspection finds anything not already declared.

Yes that is exactly their MO, get the punter excited and hope they dont back out when the price is whittled down.

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Sun 11 Dec 2011 15:56
Use car trade-in values plummeting - MikeTorque

It pays to shop around and avoid phone offers or anyone who hasn't seen the car as these offer lower prices.

If you have a mint or good condition car and take it to an interested dealer they are more likely to offer book price as per Glasses guide. This is helped if they have another dealership outlet who has made a bid for your car if that particular dealer doesn't normally sell your brand of car.

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Sun 11 Dec 2011 18:14
Use car trade-in values plummeting - rayleck
I have no intention of using WBAC- I was just using their valuation along with What Car? and Glass's to get a rough idea of my p/ex value.I would accept anything in the £13000-00 to £13500-00 so,£11500-00 is no use to me.
Going by some of the above comments I can see why my car has been so under valued.You would think in these harsh economic times traders would try a little harder to get your business,sadly not so.
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Mon 12 Dec 2011 14:34
Use car trade-in values plummeting - dieseldogg

Having just ordered a car for our daughter, a straight deal, Senior Managment & myself were both quite surprised at the general lack-a-daisical approach of the sales staff.

We looked in about 5 or 6 franchises, stated that we were flexible on specification ( as long as it was diesel, ) & price, and that we were for buying either in December or January (with an early Feburary birthday as a handy excuse) depending on what juicy offers were forthcoming.

Not many apparently, which surprised me.

Ps

A good mate got a shocking low price to trade-in a 3 year old petrol Mazda 3 with 35,000miles & Full Mazada service history, unsure of the spec but i think he was only offered £4,600.00, we concluded it was well worth that to retain & drive a wheen more years.

M

Edited by dieseldogg on 12/12/2011 at 14:37

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Mon 12 Dec 2011 16:54
Use car trade-in values plummeting - Bobbin Threadbare

My F-i-L asked the local Audi dealership what they'd take his 2008 A6 estate for - it's a stunner but 98k on the clock. Every gadget going, only serviced by them etc. They said £6k ish. He could sell it for around £10k on Autotrader! He bought it from that dealership brand new as well. He was a bit surprised as he is a repeat customer (the two cars before this have been A6 estates as well) and they weren't really willing to even discuss it.

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Mon 12 Dec 2011 19:00
Use car trade-in values plummeting - BenG

Got a rubbish trade-in on my old Focus a few weeks back. 2003 1.8TDCi Zetec with 61k miles and full history, cambelt done, etc for £1700.

I think dealers are using WBAC as their reference for prices as Parkers reckoned my car was worth low £2ks...

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Mon 12 Dec 2011 19:45
Use car trade-in values plummeting - unthrottled

That's a pretty low offer. Still, since every rep/accountant and his dog wants an Audi or a BMW 3 series, they don't have to try very hard to sell them!

You pay for the convenience of off-loading your existing car onto the dealer. The price for the convenience will be hidden somewhere in the transaction. An unwavering dealer isn't necessarily a lazy one. If his cars are priced correctly, there's no reason why he should give ground on price. Silly offers like 'cashback' or 'pay no VAT' are nothing more than chicanery designed to fool the greedy and unwitting into thinking that they're being canny and getting something for nothing.

Edited by unthrottled on 12/12/2011 at 19:46

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Mon 12 Dec 2011 20:41
Use car trade-in values plummeting - bonzo dog

Hi Bobbin, the thing is, a franchised dealer is highly unlikely to retail a 98k vehicle. Thus he needs to either

  1. get it underwritten & make no profit on it; so your F in L will be offered what the Audi dealer is offered - why would he offer less? Or
  2. take a guess at what he will be able to realise in the trade / at auction & at the moment this is not a lot.

As someone said to me today on this very subject "why would I want to take in a PX which I'm not sure I can sell & which has all of my profit (from the first car) & more. I'll hold on until a buyer comes along with no PX even if this means I have to take what on paper is less profit"

Tell your F in L to sell on Autotrader, get a lump knocked off what he wants to buy & enjoy a damn good drink at Christmas (& the rest of the year!) on the proceeds :)

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Mon 12 Dec 2011 20:53
Use car trade-in values plummeting - RT

When I traded a very leggy Astra against a nearly new Subaru, the salesman rang his contact while I was there to get a price for the Astra - now I've no idea whether or not he discounted the value he offered me but he did give a reasonable price given it's mileage and condition.

Thinking back over the last 40+ years, no dealer ever re-sold one of my cars directly, they all got rid through the trade.

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Tue 13 Dec 2011 09:52
Use car trade-in values plummeting - Bobbin Threadbare

Tell your F in L to sell on Autotrader, get a lump knocked off what he wants to buy & enjoy a damn good drink at Christmas (& the rest of the year!) on the proceeds :)

I mentioned Autotrader to him - I don't think he believes me! I might take it off him at Audi dealership prices and sell it on....!! ;-)

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Tue 13 Dec 2011 09:15
Use car trade-in values plummeting - Dodge

Quite correct, If you want to know what your car is worth always advertise it privately or use an auction house. There is no reason why a used car is worth anything at all. I have always used the private advert route except in one case (a Punto) where the paint was faulty and i couldnt do the dirty on a private punter. It can take ages and you will get idiots phoning you but it is the only way to establish true value. the auction route will give you true trade value. This time of year is hopeless for car sales and you will never get a great deal, the dealer knows your car will sit in the yard for months. Advertise your car in May when the suns out and watch the phone buzz.

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Tue 13 Dec 2011 09:50
Use car trade-in values plummeting - Bobbin Threadbare

Well I guess it goes for most things that they're only worth what people are willing to pay, second-hand.

I'm particularly interested in this stuff myself; I keep my eye on Autotrader!

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