Dealer Pre Owned Markup....
Thread Starter
Burning Brakes
Joined: Nov 2008
Posts: 1,063
Likes: 215
From: New Hampshire
Dealer Pre Owned Markup....
I am in the market for a pre owned 997 2007. I am wondering just how much the dealers markup these cars that they take in on trade? Using this information I am trying to get the best deal possible. For example, I am looking at a 2007 C2 Coupe, full leather, bose,turbo wheels, black on beige, 8K miles for $58K. No CPO. What would be a reasonable offer to the dealership on a car like this? Also why isn't it CPO'd? Makes me wonder if there is something wrong with this car. Thanks for all your input. It is greatly appreciated.
Constantine
Constantine
Last edited by cpbmd; Aug 15, 2010 at 03:32 PM.
Burning Brakes
Joined: Aug 2009
Posts: 1,123
Likes: 28
Good question for the dealer, I'd be skeptical too. If the car is at a Porsche dealer, it should have CPO, especially given the year and miles on the car. The cars do need to pass an inspection before the dealer can offer CPO. Maybe this car didn't pass the CPO inspection and if so I'd look for another car if I were in your shoes.
Advanced
Joined: Apr 2008
Posts: 55
Likes: 0
Not necessarily maybe the dealer understands it's still under factory warranty and is trying to give it for the best cost.. When I was looking for mine a few of them weren't cpo'd because of mileage- I bought mine and negotiated the cost of the cpo into the deal about $2200- well worth it in my opinion plus they had to give me new rear tires and I got to keep the old ones 5k left on them by just asking..
Rennlist Member
Joined: Jun 2006
Posts: 514
Likes: 5
From: Texas
If you have a relationship with your salesperson, ask them to contact you on any trades they may be getting ready to take. They also may be aware of someone that wants to sell the car. Usually they will take a lot less if you are doing an in and out for a new car purchase for someone else. They also may help out by cutting cost since they know they have a solid buyer for a vehicle and then you can add CPO and other options you may require.
Instructor
Joined: Feb 2002
Posts: 209
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From: San Jose, CA
Dealer's aren't automatically CPO'ing the car so they can keep cost down, advertise at a lower price, and maybe attract more potential buyers. Once they find one, then they can pitch the benefits of CPO'ing the car, at the additional cost of course.
If they go ahead and CPO it, they've incurred the expense and there's always the chance the car might sit a while on the lot, forcing them to negotiate the price down later, maybe reducing the profit on the car if they had CPO'd it. If they wait until the time of sale to pitch CPO, I think they stand an easier chance of selling the price of the CPO then.
Just a theory.
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Thread Starter
Burning Brakes
Joined: Nov 2008
Posts: 1,063
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From: New Hampshire
Great comments. I try to think on the positive side of things. I am going to talk to the sales guy tomorrow about the CPO and let you know. In any event I think I will get a PPI on the car although the place where I would take it is 60 min from the dealership. I wonder if they will let me take the car to the place. Probably 60 miles each way. If the PPI works out and there is no CPO on the car I might be okay with that. I can understand why the dealership would not want to CPO all cars in this economy: keep initial costs down and to reduce future financial risk. I am getting close to purchasing my first 997. I am getting excited although I have to maintain my objectivity and get the right car at the right price, easier said than done.Thanks for the great input.
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Thread Starter
Burning Brakes
Joined: Nov 2008
Posts: 1,063
Likes: 215
From: New Hampshire
Clean retail for this car is about $60K and the clean trade in value is about $54K. That is about a 10% mark up. I can't imagine that the dealers only mark these cars up 10%. I would have thought that they mark the cars up on the order of 20%.
Race Director
Joined: Sep 2006
Posts: 19,031
Likes: 268
From: Bentonville, AR
I am in the market for a pre owned 997 2007. I am wondering just how much the dealers markup these cars that they take in on trade? Using this information I am trying to get the best deal possible. For example, I am looking at a 2007 C2 Coupe, full leather, bose,turbo wheels, black on beige, 8K miles for $58K. No CPO. What would be a reasonable offer to the dealership on a car like this? Also why isn't it CPO'd? Makes me wonder if there is something wrong with this car. Thanks for all your input. It is greatly appreciated.
Constantine
Constantine
I would estimate the markup at least 10% and probably closer to 20%. One rough guide is to try to get a feel for the wholesale value of the car -- NADA, Black Book, KBB and possibly other sources as well (auction prices if you can get ahold of them) and then compare the car's wholesale price to the dealer's asking price.
Another way is to with the car's invoice cost (roughly MSRP - 13%) figure the car's value dropped 10% from this invoice cost the day the 1st owner drove the car off the lot, and then each year upon the appearance of the new year's models another 10%. Do the math and this is the car's depreciated value. Compare this calculated value to what the dealer's asking. (Remember too that the price is not a fact only an opinion.)
As for the CPO question, the car is a 2007 which means it may still have some factory warranty left. If not perhaps the dealer has a 3rd party extended warranty )service) available that he would prefer to sell you at a nice tidy profit.
Or the dealer just doesn't feel the car requires a CPO to sell. I'm not sure but I seem to remember the CPO costs the dealer some money and the dealer's trying to sell the car with as much profit as possible. Sales have been really slow and dealers are caught between trying to get as much for each car as possible and selling enough cars to remain open. My second-hand info is some are open but not making any money. The dealerships are for sale but there are no takers.
Or maybe the car doesn't qualify for a CPO warranty. Ask the dealer. I'd be interested in the answer.
Sincerely,
Macster.
Burning Brakes
Joined: May 2010
Posts: 814
Likes: 6
From: Boston
Two things, as I'm searching in the same price neighborhood.
1. And this ticks me off as I've never spent this much for a used car. Most dealers can mark them up even more because no financially sane person who is planning on getting another car will sell privately, if it means losing their sales tax rebate. So, they'll "trade" to the dealer for $3,000 less than they could get privately on a 60k car (assuming a 5% sales tax state). Dealers beat folks up for more than this, but it partially explains why private sales have been drying up over the years. Makes me feel like I'm paying double my state's sales tax
2. I saw an '06 C2S recently get marked down 5,000 that the dealer claimed was enabled by stripping the CPO from their 59k ask. Price was probably too high, anyway, but there's another data point for you. Actually, that car is still listed.
1. And this ticks me off as I've never spent this much for a used car. Most dealers can mark them up even more because no financially sane person who is planning on getting another car will sell privately, if it means losing their sales tax rebate. So, they'll "trade" to the dealer for $3,000 less than they could get privately on a 60k car (assuming a 5% sales tax state). Dealers beat folks up for more than this, but it partially explains why private sales have been drying up over the years. Makes me feel like I'm paying double my state's sales tax
2. I saw an '06 C2S recently get marked down 5,000 that the dealer claimed was enabled by stripping the CPO from their 59k ask. Price was probably too high, anyway, but there's another data point for you. Actually, that car is still listed.
