Abe Evrens

Posting this for everyone's benefit as I believe we all fall into the trap of "wanting" that "car" more than our ability to "rationalize objectively" why often we should refrain from buying it in the first place ! First off, its not abnormal for Porsche dealers to re-sell trades to other non branded dealers for a quick flip when it doesn't fit their profile of what they want on their lot. For example: I was looking at an 08 Cayman S at a non Porsche dealership - but a "exotic- boutique" re-seller. To make a long story super short ... that 08 Cayman S was traded in at Pfaff where the private seller got $19k for that trade and purchased a used Macan. Pfaff flipped the same car to this "exotic car" boutique dealer in Toronto and was looking to sell at $29,900 + tax ...certified (but as we all know ...that means sweet little these days) So some simple math here ...we have a $10k spread between what Pfaff paid and what the new dealer is selling. My guess the other dealer trying to sell me the car got $29k for that same car w/ 105kms on the dial. So that begs the question how much did each make ? Answer - not really relevant but what is more relevant is what these used cars are being bought for !! Car had a wet front hood - found out the car was repainted in the front due to scratches and had a blown engine at 65,000 kms and block was replaced but original headers intact. How did I know this ? I called the garage that did some of the work and found out it was "their car" traded in ....

The reseller NOT Pfaff had NO clue about its history NOR did they concern themselves with it because some idiot was going to walk in and buy it regardless. In the meantime the sales guy was smooth as silk - didn't lie - just refrained or played ignorant or simply didn't care to know because these cars are just a "product" for them. They don't care they simply want to flip the car ... its buyer beware and we buyers should NOT expect more...! This is where we often allow our "wants" to overtake any questions relevant to that purchase.

My uncle who has been in the car business for 40 yrs - said one very important thing to me "all the big money is being made in used cars" - end of story ...

As for the branded Porsche dealers - they have most by the "short and curlies" because often they get the "best" of what is out there and often will sell cleaner cars because they have one special tool available to them - its called the "CPO" warranty that "you" the consumer as did "I" paid for that privilege "twice" but in return I got some peace of mind ... for a price of course.

So the moral of the story is simple - branded or non branded dealerships are there to make "MONEY" - that is why they are in business - simple. Some adhere to better business practices than others ... I will NOT buy a Porsche unless its a CPO or from someone I can trust, except for vintage models where they don't exist so you buy as is with NO CPO .... you must presume the worst and hope for the best and this after a PPI is done because it often never uncovers the details ...it just doesn't. Hence, don't confuse "want" with "rationale" - then again even contemplating a Porsche throws that rationale out the window ... but I hope you get what I mean. These dealers sell cars - its our choice to do our homework and determine what level of risk is justified for a price you are paying ... I also learned that in used cars especially high end models the amount of margin is often massive - 30% + as opposed to 12% margins on Porsche's (weighted average) on new ...so bargain and be prepared to walk away. I got a "fair deal" not a "good deal" but a "fair one" - for price, options, km, service records,year, model and CPO etc ... and I was willing to live with that given the lack of availability for 987.2 variants !

Having spent 20 yrs in I Banking and prop trading we are "taught to trade what we see" not "what we feel" - there is a distinction and that is no different in buying a used Porsche ... Have a great New Year everyone ... Cheers. Abe

cpbmd

Great post!
thanks Abe.

Gregster

This just in , banker complains about dealers making money. More news at 6

moab

Anybody that has ever traded in their car to a dealer knows they are going to get hosed. That's the price you pay for convenience. And of course every deal is in the business of making money. The only thing more obvious than that is that water is wet!!

Gregster

Most people do it because they could not be bothered to sell privately and deal with tire kickers. Or worse assume liability if something goes wrong after the sale "hidden defects" dealers will generally work recon/ maintence into the trade if they dont plan on wholesaling. IMO wholsaling to other dealers is by far the fastest and easiest way to make money/move stock. You do make less per unit but less work. Just don't burn your loyal buyers and be 100% honest

Lots of the big box dealer groups these days truth be told don't wholesale anymore. They sell everything in house regardless of model or brand. Only way it's getting wholesale out is if it's been sitting for ages or needs a massive amount of work. Otherwise it sits

pro1200

And I would add that selling cars is one of the only businesses that nearly has a license to steal. This is for many reasons, but the big two are that a car is an emotionally driven purchase and lending institutions are lined up at the door to create loans for the buyer.

928gt

The dealer that accepts the trade-in will only pay for the car what they know they are going to get for it EVEN BEFORE they actually get it. In other words, the trade-in car is pretty much sold to another dealer even before the dealership where you're trading it in physically takes possession of it. The moment you tell them that you want to trade in a car toward a new vehicle, your old car gets a quick once-over for obvious defects, and the details and pictures get put up on ADESA where it is immediately auctioned off and tentatively sold to another dealer in about 30 minutes - while you're still at the dealership looking at the new car you're considering buying. Your salesperson then offers you the amount they just received based on the auction as the trade-in value. Unless you have a reasonably new (< 3 years old), low mileage car that the dealer themselves might want to try selling themselves as a CPO, it goes on the ADESA auction block right away in AS-IS condition. The used car dealer that agrees to buy it then does the bare minimum of repairs and/or maintenance required to certify the car once they take possession, and they try to sell it at a profit.

gcurnew

Selling a well cared for, documented Porsche is pretty easy. I've sold two here on Rennlist within about a week of listing. Yes, trading is convenient, but very costly.

Vise

Seriously, is this really news to anyone? Of course they are in it to make money, it is not a charitable organization LOL.

Personally I've always traded in my cars knowing I could do much better selling private... but to me not worth the hassle/time not to mention the tax benefit on the new car. When I traded in my 911 recently to Pfaff they were very straight forward in terms of what they would give me on a trade vs what they planned to resell it for ($15k delta). Part of that difference is the cost to CPO (roughly $5k) and also the time they would need to carry the car in inventory which ended up being around 4 months.

Ultimately I was happy with the trade number as it allowed me to get into my current car right away which was the most important factor. Time is money etc.

JTT

Pags993

There are 2 primary margin drivers in a dealership - used cars and the F&I dept. A distant third is service and at the bottom of the list is margin on new car sales.

928gt

There is one other thing to consider toward trading it in vs selling privately: if you own the car (not lease) and trade it in, you don't pay the sales tax on the trade-in value toward the new car. If I am looking at a $120K car and they're offering me $65K for my old one, that's almost $8.5K that I don't have to pay that I would otherwise have to part with should I chose to buy the new car for cash (and would thus need to make on the private sale of the old car). Never mind the tire kickers and scammers - it's just not worth the time.

And, if you know someone who wants your old car and you ask the dealer to sell it to them at the trade-in value when you are picking up your new car, they will generally do so with no fuss and just a nominal fee (a few hundred bucks) for them to certify and plate it.

gcurnew

Good info for folks that have provincial sales tax; in Alberta with no tax other than GST, selling privately is the best way to keep the most cash in your jeans.

Adamant1971

I will add that CPO is worthless. Just a marketing gimmick designed to get more money from your wallet. I just went through hell with VW after Oakville mistakenly flagged my R as TD1 and then they tried to cancel my CPO. And I know of one local 911 that was a heavily modified track monster for two years, now sitting on a lot converted back to stock with CPO (and the dealer did the converting).

But there are many mindless meat sacks ready to make emotional purchases on cars. So that further complicates negotiating with the stealerships.

991.2 GTS

I’ve done a “sell through” on my last few new car purchases by first finding my own buyer for my used car. You’re correct the dealer was happy to pass my car through their books as an “as is” sale to my buyer, but I’d be glad to pay an admin fee if necessary. It’s a win, win (13% tax saving on my trade and top dollar for my trade) for me and also the buyer as they are getting a private sale car with full history and a bill of sale from a new car dealer who guarantees there isn't a lien on it. They also feel more comfortable that their bank draft is paid to the new car dealer not me. I’ve already asked my Porsche rep who said that a sell through wouldn’t be a problem.