A place to discuss all things ADM
#7246
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For those of you getting allocations at MSRP, is there an expectation that you won't ever flip the car for a profit, and will instead trade the car back to the dealer at MSRP or market value, whichever is lower? Or is there an expectation that you'll trade in a car and take a big hit on the trade-in value?
Last edited by joejenie; 11-04-2023 at 02:01 AM.
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Manifold (11-06-2023)
#7247
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poofy, take a chill. Mani is bored and simply asking a question, right?! Isn't that why we have a forum?
Mani, as you know I had a couple of Tourings and i just switched to a 24 winged car. My dealer (the GM and I are very close friends) and I have a very clear rule. We do the right thing by each other and, WHEN he gives me a deal, I make sure he gets the car and can make whatever "profit" there is to be made. Buying a 24 today, while i dont care about profit, I dont suspect prices are going to drop such that I would lose (meaning sell it and prcies be below MSRP). After all, very few new allocations given the RS builds happening.... your thoughts?
Mani, as you know I had a couple of Tourings and i just switched to a 24 winged car. My dealer (the GM and I are very close friends) and I have a very clear rule. We do the right thing by each other and, WHEN he gives me a deal, I make sure he gets the car and can make whatever "profit" there is to be made. Buying a 24 today, while i dont care about profit, I dont suspect prices are going to drop such that I would lose (meaning sell it and prcies be below MSRP). After all, very few new allocations given the RS builds happening.... your thoughts?
My apologies.
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Joe mac (11-04-2023)
#7248
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The two year - the subject of the article you posted originally - did not rally quite like the 10-year did. If the view is that yields are collapsing (you reference the 10-year above) then no reason to not have duration especially with the 2s10s still inverted. Druckenmiller who is long 2-year has some specific views about fiscal debt keeping yield at the long end elevated but those are contrarian so it's kind of a unique trade and most people are playing the longer end of the curve with their views.
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AlexCeres (11-04-2023)
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There's an unspoken agreement with my dealer that once I'm done with my GT cars that I'll trade them back in to get the next new GT cars. I've always gotten MSRP or a little higher and the dealer ended up selling the car that I traded in for about 10%-15% more than what I got for the trade in value.
#7250
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I wonder if any users here have kept a precise history of all of their dealings with a dealer. On any one transaction, or even a small set, I can see a dealer making an unlucky deal that looks bad in retrospect. But over the years and many transactions, my guess is that anyone who does a lot of business with a dealer pays them a ton, whether through service, add-ons, trade-ins, ADMs, etc.
I even have caught myself with selective memory on my cars, until I started tracking everything in Quicken. For me, it is not that dealers have made a ton off me as much as I have generally underestimated my spending on tax, service, transport, insurance, storage, etc. That said, dealers deal with the intention to make money, so if you think you have made money off of them, you are either wrong, or might have been lucky in a small sample.
A separate factor is inflation, but you making money by owning cars when the market for used cars is rising is not you making money off of a dealer. I have 993 Turbo S that is worth 5x what I paid for it, but I wouldn't say that the dealer did me any favor by selling it to me for 80% off of today's price.
I even have caught myself with selective memory on my cars, until I started tracking everything in Quicken. For me, it is not that dealers have made a ton off me as much as I have generally underestimated my spending on tax, service, transport, insurance, storage, etc. That said, dealers deal with the intention to make money, so if you think you have made money off of them, you are either wrong, or might have been lucky in a small sample.
A separate factor is inflation, but you making money by owning cars when the market for used cars is rising is not you making money off of a dealer. I have 993 Turbo S that is worth 5x what I paid for it, but I wouldn't say that the dealer did me any favor by selling it to me for 80% off of today's price.
Last edited by 993TurboS; 11-06-2023 at 08:05 AM.
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Manifold (11-06-2023)
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Dealers buy and sell cars every day, and they do it to make money. We owners mainly buy cars for enjoyment, and hope to get good deals along the way as we occasionally buy and sell. So dealers have way more experience in buying and selling cars, and are more objective about the money aspect. The best we owners can expect in the long run is to drive cars we like and not overspend in terms of our net cost per mile driven (none of us actually measure that).
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Larson E. Rapp (11-06-2023)
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I find it almost impossible to believe if PNH is letting you buy cars at MSRP they then turn around and buy it back a little higher than MSRP - why would they let you arb them like that? That’s just stupid business IMO unless you take a beating on your non GT cars? So either this isn’t exactly true or PNH should update their business practice because I’m sure they can easily get a better relationship than that where they don’t share the profit as much.
I buy GT3 at MSRP. A year later, dealer calls and says, hey we have an RS at MSRP if you trade in your GT3 at MSRP (or even a little above).
Im happy because my GT3 didn’t lose any value, and I get an RS at MSRP. Dealer is happy because they can now sell my car for $50-70k over what they got it for while making a repeat customer happy.
Could dealer make a little more playing the ADM game, maybe, but most ADM buyers are one and done and usually not local so it’s more strategic to do what is described above.
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usctrojanGT3 (11-06-2023)
#7253
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I find it almost impossible to believe if PNH is letting you buy cars at MSRP they then turn around and buy it back a little higher than MSRP - why would they let you arb them like that? That’s just stupid business IMO unless you take a beating on your non GT cars? So either this isn’t exactly true or PNH should update their business practice because I’m sure they can easily get a better relationship than that where they don’t share the profit as much.
what USC describes isn’t uncommon. It’s similar to my dealer. Example:
I buy GT3 at MSRP. A year later, dealer calls and says, hey we have an RS at MSRP if you trade in your GT3 at MSRP (or even a little above).
Im happy because my GT3 didn’t lose any value, and I get an RS at MSRP. Dealer is happy because they can now sell my car for $50-70k over what they got it for while making a repeat customer happy.
Could dealer make a little more playing the ADM game, maybe, but most ADM buyers are one and done and usually not local so it’s more strategic to do what is described above.
I buy GT3 at MSRP. A year later, dealer calls and says, hey we have an RS at MSRP if you trade in your GT3 at MSRP (or even a little above).
Im happy because my GT3 didn’t lose any value, and I get an RS at MSRP. Dealer is happy because they can now sell my car for $50-70k over what they got it for while making a repeat customer happy.
Could dealer make a little more playing the ADM game, maybe, but most ADM buyers are one and done and usually not local so it’s more strategic to do what is described above.
So the margins are there for PNH when they deal with a customer like usctrojanGT3, even if they offer him GT cars at MSRP.
Dealers always win. Always.
#7254
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I believe usctrojanGTC leases several non-GT cars from PNH. Something along the lines of multiple Macans, if I recall correctly.
So the margins are there for PNH when they deal with a customer like usctrojanGT3, even if they offer him GT cars at MSRP.
Dealers always win. Always.
So the margins are there for PNH when they deal with a customer like usctrojanGT3, even if they offer him GT cars at MSRP.
Dealers always win. Always.
#7255
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what USC describes isn’t uncommon. It’s similar to my dealer. Example:
I buy GT3 at MSRP. A year later, dealer calls and says, hey we have an RS at MSRP if you trade in your GT3 at MSRP (or even a little above).
Im happy because my GT3 didn’t lose any value, and I get an RS at MSRP. Dealer is happy because they can now sell my car for $50-70k over what they got it for while making a repeat customer happy.
Could dealer make a little more playing the ADM game, maybe, but most ADM buyers are one and done and usually not local so it’s more strategic to do what is described above.
I buy GT3 at MSRP. A year later, dealer calls and says, hey we have an RS at MSRP if you trade in your GT3 at MSRP (or even a little above).
Im happy because my GT3 didn’t lose any value, and I get an RS at MSRP. Dealer is happy because they can now sell my car for $50-70k over what they got it for while making a repeat customer happy.
Could dealer make a little more playing the ADM game, maybe, but most ADM buyers are one and done and usually not local so it’s more strategic to do what is described above.
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Orca911 (11-09-2023)
#7256
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I'm sorry but what about that is disgusting?
#7257
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what is disgusting about this approach
I have been on both sides
my dealer used to do similar thing with MSRP allocations for GT cars and I sell them back to then 6-12 months later for MSRP
worked well for both
unfortunately, now the dealer decided to change their approach , and decided on highest ADM they can get , so I am on the sidelines for now. I am willing to pay a small ADM on couple of cars , but not the crazy ADM that is happening on some models.
why ?
I think these cars are priced well by Porsche
For example a 992 3RS at 285k is well priced but reaching close to max
with 100 k ADM , meaning 385 k total , I don't think the car is worth it that much
I have been on both sides
my dealer used to do similar thing with MSRP allocations for GT cars and I sell them back to then 6-12 months later for MSRP
worked well for both
unfortunately, now the dealer decided to change their approach , and decided on highest ADM they can get , so I am on the sidelines for now. I am willing to pay a small ADM on couple of cars , but not the crazy ADM that is happening on some models.
why ?
I think these cars are priced well by Porsche
For example a 992 3RS at 285k is well priced but reaching close to max
with 100 k ADM , meaning 385 k total , I don't think the car is worth it that much
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#7259
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I find it almost impossible to believe if PNH is letting you buy cars at MSRP they then turn around and buy it back a little higher than MSRP - why would they let you arb them like that? That’s just stupid business IMO unless you take a beating on your non GT cars? So either this isn’t exactly true or PNH should update their business practice because I’m sure they can easily get a better relationship than that where they don’t share the profit as much.