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2011-2014 Mustangs
2011-2014 Mustang Talk
Dealership unhappy they're not going to get to screw me?
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<blockquote data-quote="Red Turtle" data-source="post: 10298071" data-attributes="member: 17647"><p>Have you been in the business? Unless you have, you will not understand the used car market. Book is only a tool or guide, and most of the time the dealership will use popularity of model, color, price range, estimated recon, age/model year as this leads to financing options, and ease of dumping it at the auction in the event it does not sell. The book values change drastically and if the car sits for 60days, it could potentially lose $500-$1000. So in theory, if the dealer put "Book" in a car and then could not sell it with 60 days, they could be in the car over book. </p><p></p><p>Now because most of you have never been in the business, lenders use " wholesale book" as loan value on used cars, and almost 100% of buyers "don't want to put money down". So now you have an equation of 120-130+% LTV (loan to value) after you take into consideration profit, being in the car over book, and of course financing the tax's/registration fees. This most of the time results in a lack of financing options for most. Now you have to hope that someone comes in with cash to purchase the car, which is less than 5%.</p><p></p><p>So here the dealer sits with the car and now has to go sell it at the auction. The next guy buying is not going to put his dealer in the same scenario, so he is going to try and buy it $2k-3k back of book. The dealer does not have to sell it for this, but runs the risk of the situation getting worse as time goes on. Dealers will recognize a car at auction from the same dealer and offer less and less each week. </p><p></p><p>So all of these things are considered when placing a value on a vehicle. Everyone has the ability to try and sell their own vehicle and are not headlocked into trading.</p></blockquote><p></p>
[QUOTE="Red Turtle, post: 10298071, member: 17647"] Have you been in the business? Unless you have, you will not understand the used car market. Book is only a tool or guide, and most of the time the dealership will use popularity of model, color, price range, estimated recon, age/model year as this leads to financing options, and ease of dumping it at the auction in the event it does not sell. The book values change drastically and if the car sits for 60days, it could potentially lose $500-$1000. So in theory, if the dealer put "Book" in a car and then could not sell it with 60 days, they could be in the car over book. Now because most of you have never been in the business, lenders use " wholesale book" as loan value on used cars, and almost 100% of buyers "don't want to put money down". So now you have an equation of 120-130+% LTV (loan to value) after you take into consideration profit, being in the car over book, and of course financing the tax's/registration fees. This most of the time results in a lack of financing options for most. Now you have to hope that someone comes in with cash to purchase the car, which is less than 5%. So here the dealer sits with the car and now has to go sell it at the auction. The next guy buying is not going to put his dealer in the same scenario, so he is going to try and buy it $2k-3k back of book. The dealer does not have to sell it for this, but runs the risk of the situation getting worse as time goes on. Dealers will recognize a car at auction from the same dealer and offer less and less each week. So all of these things are considered when placing a value on a vehicle. Everyone has the ability to try and sell their own vehicle and are not headlocked into trading. [/QUOTE]
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2011-2014 Mustang Talk
Dealership unhappy they're not going to get to screw me?
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