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I would pay more for a car covered under a CPO. First, you know the car will be mechanically sound/sorted. PPIs do not catch all repairs needed and most are absolute bunk except for the super obvious. How many times have you had those difficult to duplicate, intermittent problems? Second, a warranty has and adds some value.
If you have two exactly the same cars, but one comes with CPO and one doesn’t . . . which would you get?
Based on my experience with CPO and non CPO cars, I think and would pay 3% or more for the CPO car versus a comparable non covered car.
I would pay more for a car covered under a CPO. First, you know the car will be mechanically sound/sorted. PPIs do not catch all repairs needed and most are absolute bunk except for the super obvious. How many times have you had those difficult to duplicate, intermittent problems? Second, a warranty has and adds some value.
If you have two exactly the same cars, but one comes with CPO and one doesn’t . . . which would you get?
Based on my experience with CPO and non CPO cars, I think and would pay 3% or more for the CPO car versus a comparable non covered car.
Doug! Thoughts on that one? hits all the big hitters- Manual, GTS, except aerokit.
Not really; it might make the purchase easier (giving the buyer more confidence) but doesn't add to value.
This isn't a great time to wait, but nobody knows if next year will be better. We could bounce back, but CV could come right back when restrictions are released, and these protective measures could throw our economy right into an extended recession or worse. Now might be your best time! Nobody knows. I haven't heard enough conversations about what will happen if we are just postponing the inevitable infection of 1/2 or more of the population, and by kicking the infection can down the road while shutting down the economy to do so, are adding potential financial ruin to the mix.
If you look at the flattening of the curve graphs, all we're trying to do is prevent the healthcare system from being overwhelmed where people who need critical care cannot get it. At the end, this will be a very prolonged painful journey which will not be resolved until everyone takes a vaccine or has already had it and has the antibodies.
Doug! Thoughts on that one? hits all the big hitters- Manual, GTS, except aerokit.
Color?
With aeorkit, easy 80-85k?
Are you speaking of a particular car? Can you link it?
I have no idea about prices now. I think the market will be super slow, but there will still be guys out that will pay $$$s for those super rare, unicorn or time capsule cars.
The problem with prices is that many dealers have paid premium prices to get premium inventory. How far down they are willing to go remains to be seen, but I think guys will be moving stuff close to cost right now to keep floor current or in check.
I have no idea about prices now. I think the market will be super slow, but there will still be guys out that will pay $$$s for those super rare, unicorn or time capsule cars.
Are you speaking of a particular car? Can you link it?
I have no idea about prices now. I think the market will be super slow, but there will still be guys out that will pay $$$s for those super rare, unicorn or time capsule cars.
The problem with prices is that many dealers have paid premium prices to get premium inventory. How far down they are willing to go remains to be seen, but I think guys will be moving stuff close to cost right now to keep floor current or in check.
DH,
Here is the link. Ofc pricing is skewed due to our current world issues. But if you can look through that and say your thoughts on this GTS versus similar GTS car specw aerokit and what difference in price would you forecast? You're opinion ofc.
The problem with prices is that many dealers have paid premium prices to get premium inventory. How far down they are willing to go remains to be seen, but I think guys will be moving stuff close to cost right now to keep floor current or in check.
here is a timely article from Jalopnik. I dont think it will be up to the dealers how close to cost they sell it.
for those that were around during GFC, it took a LONG time for the market for assets to catch up with stock market and reality. a ton of stuff (houses & cars) just sat forever until they were forced sales with people holding out for things to go back to where they were. we are only 2 weeks into CV....
here is a timely article from Jalopnik. I dont think it will be up to the dealers how close to cost they sell it.
for those that were around during GFC, it took a LONG time for the market for assets to catch up with stock market and reality. a ton of stuff (houses & cars) just sat forever until they were forced sales with people holding out for things to go back to where they were. we are only 2 weeks into CV....
Least of our worries with the current CV situation. Seems as demand is going to virtually nil, dealers across the board will look to unload used and/or new car inventory? Those who happen to be flush with cash might find insane buying opportunities, the longer this situation unfolds.
Sweetwater...the largest on-line seller of MI goods (Music Industry) is experiencing a big uptick in sales since last week. I was ready to jump to my death last Tuesday, but yesterday we had our second-largest day ever in our 25-year history. On a Friday, Our slowest day. Plus my retail location is closed.
Yes, we will take a hit. Yes, we are resilient. I'm doing what I can to help people that are out of work by gifting a couple close friends out of work and supporting those places that CAN'T work. My wife canceled her hair/nail/ whatever women do appointments but we'll pay them anyway. Others are doing the same. This is a time to pay back since I've been so lucky. Even if business tanks for a while I'll dip into my retirement to pay employees. Not sure if it will.
you are sweetwater? I love Sweetwater, definitely my preferred MI retailer. I remember talking to some Fender guys that sometimes their business is inversely proportional to the overall economy because when times are tough people sing the blues lol. I’ll keep you guys in mind if we end up shopping for stuff to make our live streaming more distributed.
Here is the link. Ofc pricing is skewed due to our current world issues. But if you can look through that and say your thoughts on this GTS versus similar GTS car specw aerokit and what difference in price would you forecast? You're opinion ofc.
that dealership is sketchy. A friend of mine was looking at a BMW 1M from them, had it looked at, and of course it was found to have been in an undisclosed accident that the dealership had prior knowledge of. Most of their cars come from auction....clean manual GTS or whatever don't go to auction and end up at a place like this. I am not sure this one did, but I have seen a lot of "questionable" cars there over the years.
Last edited by raidersfan; 03-22-2020 at 10:43 PM.
here is a timely article from Jalopnik. I dont think it will be up to the dealers how close to cost they sell it.
for those that were around during GFC, it took a LONG time for the market for assets to catch up with stock market and reality. a ton of stuff (houses & cars) just sat forever until they were forced sales with people holding out for things to go back to where they were. we are only 2 weeks into CV....
If I were a dealer today, I would try to get out of it what I could (hopefully cost), shut down for the time being, lay everyone off, and pay rent/overhead as best as I could while negotiating with note-holder/landlord for a discount. Retailers have a lot of leverage in this situation: I spoke with the head of acquisition for a Real Estate P/E firm and he told me they are cutting deals to keep businesses alive. Their lenders are working with them as well. 50% of something is a lot better than 100% of nothing, and nothing is what they get if they force someone out of business right now.
As a dealer, paying a discounted lease rate with little to no other overhead gives one a fighting chance. Keeping people on while holding onto expensive inventory and hoping this will all blow over is very risky. It might pay off, but the odds are long that it will, and if it doesn't, it puts a dealer a lot closer to bankruptcy. Plus, if I, as a lender, see that the dealer is liquidating all inventory just to go into hibernation and live to fight another day, I know they are not making money while crying poor.
In business, gains don't end you; losses do. Too many people become emotionally committed or fall victim to the sunk cost fallacy. If it isn't bringing anything to the table in terms of profit, loss-leadership, or future potential, re-adjust your strategy to minimize losses and re-allocate resources to more profitable enterprises. If there aren't any, then wait until things turn around. Whatever people paid for cars at some point in the past is irrelevant. What people will pay for them today and in the forsee-able future, and how this balances against the future costs of operating a business, are all that matter. It is no different than running a conglomerate: they get too large and the 80% of well-run divisions are pulled down by the 20% of non-performers. The company is too unwieldy to cut the dead weight and underperforms as a result.
I search cars.com quite often and just did another one; things in the filter are: 2009-12, coupe, manual, under 50k miles. As a result, I barely see any car being advertised for under $50K.
Below is a screenshot of the search I just did few minuets ago: the first one is 45K but it had an accident before; anything has a clean Carfax history is priced around 60K and plus. I am really baffled..
As a good friend of mine who owns a specialty Porsche dealer says; "what one car is priced at vs what one car sells at are 2 very different things". He says most buyers expect at least a 5% discount; he often ends up at 10%, and isn't like Friedman, asking outrageous prices to begin with.
Start by calling and making offers. Find out what current wholesale is, and add 10%. Most dealers expect to make 20% in normal times, but these are not normal times.
here is a timely article from Jalopnik. I dont think it will be up to the dealers how close to cost they sell it.
for those that were around during GFC, it took a LONG time for the market for assets to catch up with stock market and reality. a ton of stuff (houses & cars) just sat forever until they were forced sales with people holding out for things to go back to where they were. we are only 2 weeks into CV....
Here is is what I posted about a week ago in this thread in post 6406. The article you link seems very consistent with what I say including the part that corporate owned new car dealerships may survive, but the small used lots and privately owned new car dealerships may be toast.
I have several close friends that I don't even want to call right now (bad friend on my part . . .) because I know they are ****ting bricks and I don't know what to say. The used car market has been an absolute blood bath with razor thin profit margins since about 2016/17. Used car dealers were making their money on back end, but none of them were doing well. A big part of it was Carmax, Carvanna and etc. running up auction prices do dang near retail due to their reliance on back end money and need for inventory. This has squeezed out the smaller guys. They could maybe sustain this about 30 to 60 days, Many were already have floor plans decreased before this happened.
I have to say I never expected this type of shut down and it may be here for a while. I would say many smaller dealers will very soon be willing to sell off some of their inventory at or near their costs, especially if they are financing the deal.
The larger players like Sonic, Autonation and etc. should be okay, but some companies like Nissan and Infinity were already in a lot of trouble.
As a good friend of mine who owns a specialty Porsche dealer says; "what one car is priced at vs what one car sells at are 2 very different things". He says most buyers expect at least a 5% discount; he often ends up at 10%, and isn't like Friedman, asking outrageous prices to begin with.
Start by calling and making offers. Find out what current wholesale is, and add 10%. Most dealers expect to make 20% in normal times, but these are not normal times.
Wholesale price or MMR for 997.2s (non GT3) are not accurate because good 997.2s don’t end up rolling through an auction or being sold at wholesale . Only crap or basket case 997.2s that no one wants to mess with end up at auction. This is well known.
One would be pretty out of touch to think Ryan Friedman’s cars were purchased at wholesale or MNR prices. Not just Friedman, but lots dealing in high end, premium cars pay for it because they know purchasers are out there for this stuff.
that dealership is sketchy. A friend of mine was looking at a BMW 1M from them, had it looked at, and of course it was found to have been in an undisclosed accident that the dealership had prior knowledge of. Most of their cars come from auction....clean manual GTS or whatever don't go to auction and end up at a place like this. I am not sure this one did, but I have seen a lot of "questionable" cars there over the years.
This straight and pure defamation and what make you believe that GTS went through an auction? What evidence do you have that most of their cars came from auction?
I quickly scanned the first 48 Porsche 911s and Boxsters out of 62 listed. I saw one (1) 996tt, two (2) 997.2s, one (1) GT3 and two (2) 991s (both Targas) that came from auction. I did see 2 cars that could have been purchased from a bank (perhaps repossessions) and 2 or 3 higher priced or newer cars that may have purchased wholesale from other dealers such as this 2011 997.2 GT2 RS:
Again, this was a quick scan and I may or may not have missed a few, but I saw about a half dozen auction cars our of 48. GT3s are all over Manheim as are 991s so I would not knock a dealer for picking those up at all.
03-21-2020, 09:43 PM
