Short Sighted Dealers

[chiang mai]

I'm getting ready to sell my two year old CRV and have been told from two different sources that the sales price to a private buyer should be between 850,000 and 870,000 baht - that stacks up with the insured value of 900,000. On the way home today I stopped in to a Honda dealer to "admire" a new CRV costing 1.3 mill and "casually" inquired what the value is of my vehicle. Maximum of 600k came the reply, if you sell to a company. What if I sell you my CRV and then buy a new CRV from you, what will you give me I asked. 600K max came the reply again.

I tried to explain to my wife the different attitudes and approaches used by dealers in the West as compared to those in Thailand. In the West I said, a dealer would want to do a single deal on all its components and make a profit on the deal package. Here it seems the mentality is to break the deal down into its component parts and make the maximum profit on each part. If somewhere along the line the punter says no, the whole thing collapses and the dealer makes zero. Am I alone in thinking this is rather undeveloped behavior and thinking on the part of the dealers?

[Crossy]

Nope you're not alone. In the UK a part-ex against a new car nealy always attracts more than you can get with a private sale (part-ex vehicles usually end up at auctions and go for a lot less than the dealer 'paid' for them), here always less, way less.

It's just the way it works here, things ain't gonna change in our lifetimes, live with it

We got 50% more for our old Beemer in a private sale than the dealer wanted to offer part-ex against our new Ford, not that I'm complaining. We could actually have gotten more for the old bus if I'd been prepared to wait, but I wanted my new toy and didn't want to transfer the cash from overseas.

[danone]

I'm getting ready to sell my two year old CRV and have been told from two different sources that the sales price to a private buyer should be between 850,000 and 870,000 baht - that stacks up with the insured value of 900,000. On the way home today I stopped in to a Honda dealer to "admire" a new CRV costing 1.3 mill and "casually" inquired what the value is of my vehicle. Maximum of 600k came the reply, if you sell to a company. What if I sell you my CRV and then buy a new CRV from you, what will you give me I asked. 600K max came the reply again.

I tried to explain to my wife the different attitudes and approaches used by dealers in the West as compared to those in Thailand. In the West I said, a dealer would want to do a single deal on all its components and make a profit on the deal package. Here it seems the mentality is to break the deal down into its component parts and make the maximum profit on each part. If somewhere along the line the punter says no, the whole thing collapses and the dealer makes zero. Am I alone in thinking this is rather undeveloped behavior and thinking on the part of the dealers?

hear you loud and clear.

if you "switch" an old for a new one at the honda dealer, you get about 20 percent less for the old one than if you sell it privatly.

its just the way it is. because some people do not have to care about money in this country. they consider it as a comfortable way to sell a car. getting 20 percent less? peanuts.

[Phil Conners]

Then UK is special, in the rest of Europe dealers pay pittance for used cars, regardless if you're buying a new one from them.

[Jamie]

Same here in the States. They are not going to give you what it is worth, but they will surely tack on a higher price for resale. They want to make the highest profit on the vehicle they can. I've seen used trucks at the local "stealership" that looked like they were driven to hel_l and back. Scratches, rust spots along the underside of the bed, high mileage etc. You know they offered the previous owner next to nothing, yet the prices they had listed were ridiculous considering the great deals and rebates on a brand new truck.

[cleggit]

Same here in the States. They are not going to give you what it is worth, but they will surely tack on a higher price for resale. They want to make the highest profit on the vehicle they can. I've seen used trucks at the local "stealership" that looked like they were driven to hel_l and back. Scratches, rust spots along the underside of the bed, high mileage etc. You know they offered the previous owner next to nothing, yet the prices they had listed were ridiculous considering the great deals and rebates on a brand new truck.

Tiz the same in the UK - i was a bit puzzled by the above responses. Everytime i've ever tried to px a vehicle here the dealers have offered a pittance - even for cars with a supposedly strong residual value. If they do happen to offer a good px price then they won't give any sort of discount off the cost of the new car. Best way is to sell privately then go into the dealers with the cash ready and your bartering head on......

[borracho]

How dare those evil car dealers try to make a profit!

Unless you already have a buyer lined up for your old car selling privately carries it own set of risks.

As far as the the new car dealer goes, they are in business to make money. If they weren't making some money off you they wouldn't be there to sell you a nice shiny new car and provide service for you.

Do you begrudge you're favorite restaurant for making a profit? When the profit margin of a restaurant meal is much higher

Dealer profit margins on new cars are pretty low. They make more off accessories and finance.

[Pattaya Dave]

How dare those evil car dealers try to make a profit!

Unless you already have a buyer lined up for your old car selling privately carries it own set of risks.

As far as the the new car dealer goes, they are in business to make money. If they weren't making some money off you they wouldn't be there to sell you a nice shiny new car and provide service for you.

Do you begrudge you're favorite restaurant for making a profit? When the profit margin of a restaurant meal is much higher

Dealer profit margins on new cars are pretty low. They make more off accessories and finance.

I agree, the profit margins on new cars aren't all that spectacular. New cars sales profits are a product of volume, the more they sell, the more profit the dealer makes. My father was a car salesman in the U.S. for most of his adult life and he always told me that the big profits were made in the used car market. There are much higher profit margins although the volume sold is lower than that of new cars. It's the old adage, buy low and sell high. Having said that, I do agree that the prices offered by the dealer on trade-in here in Thailand is less than what would be offered in the U.S. from my experience.

Pattaya Dave

[Xabi]

I'm getting ready to sell my two year old CRV and have been told from two different sources that the sales price to a private buyer should be between 850,000 and 870,000 baht - that stacks up with the insured value of 900,000. On the way home today I stopped in to a Honda dealer to "admire" a new CRV costing 1.3 mill and "casually" inquired what the value is of my vehicle. Maximum of 600k came the reply, if you sell to a company. What if I sell you my CRV and then buy a new CRV from you, what will you give me I asked. 600K max came the reply again.

I tried to explain to my wife the different attitudes and approaches used by dealers in the West as compared to those in Thailand. In the West I said, a dealer would want to do a single deal on all its components and make a profit on the deal package. Here it seems the mentality is to break the deal down into its component parts and make the maximum profit on each part. If somewhere along the line the punter says no, the whole thing collapses and the dealer makes zero. Am I alone in thinking this is rather undeveloped behavior and thinking on the part of the dealers?

[stingray]

How dare those evil car dealers try to make a profit!

Unless you already have a buyer lined up for your old car selling privately carries it own set of risks.

As far as the the new car dealer goes, they are in business to make money. If they weren't making some money off you they wouldn't be there to sell you a nice shiny new car and provide service for you.

Do you begrudge you're favorite restaurant for making a profit? When the profit margin of a restaurant meal is much higher

Dealer profit margins on new cars are pretty low. They make more off accessories and finance.

This is correct! Another thing is, that new car dealers overhere not make trade ins. They usally call the used car dealer, to get a price of them, before they make any offer for the "trade in car". After if you bought your new toy, they sell the "trade in" direct to the used car dealership. They not want stuck up with all the used cars in theyr yard. New cars they get in comission. Why they should trade in used cars and sit on them? The risk on loosing money on the trade in is higher than the small profit on a new car.

[cleggit]

How dare those evil car dealers try to make a profit!

Unless you already have a buyer lined up for your old car selling privately carries it own set of risks.

As far as the the new car dealer goes, they are in business to make money. If they weren't making some money off you they wouldn't be there to sell you a nice shiny new car and provide service for you.

Do you begrudge you're favorite restaurant for making a profit? When the profit margin of a restaurant meal is much higher

Dealer profit margins on new cars are pretty low. They make more off accessories and finance.

This is correct! Another thing is, that new car dealers overhere not make trade ins. They usally call the used car dealer, to get a price of them, before they make any offer for the "trade in car". After if you bought your new toy, they sell the "trade in" direct to the used car dealership. They not want stuck up with all the used cars in theyr yard. New cars they get in comission. Why they should trade in used cars and sit on them? The risk on loosing money on the trade in is higher than the small profit on a new car.

Aaaaaah the poor car dealers on the breadline because we want an extra few hundred quid for our car part ex

Is that the sound of the smallest violin in the world i hear playing

I've no problem with a car dealer or any other business trying to make money - just as i have no problem with someone trying to negotiate as good a deal as possible when they are spending thousands of pounds on a new car.

[chanchao]

I'm not sure I agree with the original poster. Because I have in the past sold a current used car to a dealer for WAY more than it was worth.

I think what's at work here is that the new CRV has just been released, and sales people have no trouble at all meeting their monthly targets. Wait a while, let the competition release their baby-suvs (mia-noi-suvs ) , or Toyota do something to their Fortuner, let the sales people get a bit desperate and suddenly you will get a lot more for the car you trade in. (or wait 2-3 years and realize you're STILL getting that 600K, so you've been driving for free for 2-3 years)

Secondly: There's more than one dealer and not all are equally desperate. Shop around. Not in terms of what you can get on the new car, but especially also on what they're willing to give for the old one.

Thirdly: You'd be nuts to now trade in a car you bought new a mere 2 years ago. (esp. in Thailand where a 2-5 year old car costs virtually nil in maintenance) Might as well throw money off a bridge, but do then give me a call first because I want to be under it.

Cheers,

Chanchao