Trade in rort?

[Smoke Pursuit]

Originally Posted by LeadFoot81

My most recent experience with trade in vs private sale:

Was offered 18K trade in for my wifes 2013 Focus Titanium (by two separate dealers) to go towards a new purchase. One dealer said he couldn't go any higher as he'd struggle to make a few thousand on the sale.

Did a search for what similar examples were going for at dealerships (which was around 24K)

Advertised our Focus for 23K with roadie, sold it within 3 days for 21K (needed it gone asap)

So we pocketed the few thousand the dealer would've struggled to make.

Difference is the dealer would have sold it for 24 not 21. Why? because people will pay more for the dealer experience (ease of finance, warranty etc).

[axe]

Originally Posted by BENT_8

This is a difficult scenario as your hands are tied and they know it.

The car you want is in limited supply so they can ask what they want, there is little room to move if any.
Then there is the delivery date, sure you can advertise privately but what if it sells before your Sprint is ready, can you do without a car.
What if it doesnt sell before the delivery date, can you do the deal without selling the old one first.

If it were me i'd find another yard and get a buy price from them, if its a good car and being a T it should be desirable, colour will add more if its the right one as it draws attention to the yard.
If the price is right, take it if you can, failing that, show the dealer you're buying the Sprint from how much someone else offered and use it as leveredge for a better trade price. Tell them you'd rather they profit from it then an independant but you're not willing to get bent over for giving them the priveledge.

I'd be looking for $14k as it is realistically woth $19K drive away, they look to make a $5k buffer for overheads, warranty and sale sweeteners.

I've got a daily drive so having another car isn't an issue but i'd obviously like to be without the weekend car for as little time as possible. $14k is around what I reckon it should trade for as well.

[BENT_8]

Originally Posted by axe

I've got a daily drive so having another car isn't an issue but i'd obviously like to be without the weekend car for as little time as possible. $14k is around what I reckon it should trade for as well.

Can you do the deal without the trade, if they know your financial situation they will know the answer to this already through their F&I guy and be using it against you.

[Beastie]

I think it can also be effected if you are using finance or not.

I have been through your situation a few time in the past and after doing some research on private & dealer asking prices for my trade-in, I then settled on a figure in my head of what I thought a reasonable trade value that I was going to accept.

I then said to the dealer, I am happy to do the deal if you can package everything up for a monthly finance amount of $XXX.XX

Once the deal was done, I then make myself a promise to not search for my old car on-line, as I knew I would only get depressed, as the dealer will throw it up for sale asking way more than what I traded it for - but hey, that's the business they're in.

If no finance is involved and you have a bit of time up your sleeve to sell your car, I definitely think that selling private would yield you a few extra $'s, although potentially more inconvenient for you.

[Dr Terry]

Originally Posted by Smoke Pursuit

Don't forget they have to add GST and Stamp duty when they sell it, plus offer a stat warranty and RWC.

Not quite correct !

The dealer does not pay any stamp duty, the private buyer pays this when he transfers it into his name, after purchase.

GST only applies to the margin not the whole figure. In other words, if the dealer buys (trades) a car for say $10,000 then later sells it for $15,000, his GST liability is on the $5,000 profit, i.e. $500 (Not the full $1,500).

The margin covers, as you say, RWC, warranty, any-refurbishing costs, labour & overheads.

Dr Terry

[RANGEREST]

Originally Posted by Dr Terry

Not quite correct !

The dealer does not pay any stamp duty, the private buyer pays this when he transfers it into his name, after purchase.

GST only applies to the margin not the whole figure. In other words, if the dealer buys (trades) a car for say $10,000 then later sells it for $15,000, his GST liability is on the $5,000 profit, i.e. $500 (Not the full $1,500).

The margin covers, as you say, RWC, warranty, any-refurbishing costs, labour & overheads.
Dr Terry

Dealers sell cars "drive away" so all stamp duty etc is included in the sale price,
The buyer does pay it ,but if anyone is quoted drive away pricing it means, all costs incusive.

[Dr Terry]

Originally Posted by RANGEREST

Dealers sell cars "drive away" so all stamp duty etc is included in the sale price,
The buyer does pay it ,but if anyone is quoted drive away pricing it means, all costs incusive.

Drive Away pricing is different & usually only applies to new cars.

As you can see from my example I was talking generally about the used car trade. New laws force new car dealers include all on-roads (including rego & 3rd parts insurance) as part of the quoted price.

This generally applies only to new car advertising.

Dr Terry

[RANGEREST]

Originally Posted by Dr Terry

Drive Away pricing is different & usually only applies to new cars.

As you can see from my example I was talking generally about the used car trade. New laws force new car dealers include all on-roads (including rego & 3rd parts insurance) as part of the quoted price.

This generally applies only to new car advertising.

Dr Terry

Try buying any registered car from a dealer, and I'll bet it'll be drive away pricing.
As you said by law, new or used.

[CODSASR]

Originally Posted by Dr Terry

Not quite correct !

The dealer does not pay any stamp duty, the private buyer pays this when he transfers it into his name, after purchase.

GST only applies to the margin not the whole figure. In other words, if the dealer buys (trades) a car for say $10,000 then later sells it for $15,000, his GST liability is on the $5,000 profit, i.e. $500 (Not the full $1,500).

The margin covers, as you say, RWC, warranty, any-refurbishing costs, labour & overheads.

Dr Terry

In victoria used cars are drive away

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[Blue Shadow]

Originally Posted by JAJH

The trade in price is irrelevant, it's the change over figure you need to focus on. Eg: you want $10k for your car, the dealer wants 20k, so the change over is 10k. You need to decide what changeover figure you are comfortable with. But consider this, you only get one bite at the cherry, the dealer gets two...he will make money on your car and on the one he is selling.

Spot on

[JAJH]

Originally Posted by axe

Was more asking which particular website was worthwhile.

I have bought and sold a bunch of cars and in my opinion CarSales is probably the best way to go. It will cost you about $90 for an ad and you can post a heap of pics. They will also send you a large For Sale sticker you can put on your window which helps. The most important tip I can offer is take plenty of good quality photos, inside, outside, under the bonnet and make sure the car is immaculate. Price it according to the market, even on the high see but your ad will need to stand out to attract a higher price. One thing I never, ever do is negotiate a price (ie; "what's your lowest price") even before a buyer has seen the car. Once a potential buyer comes to view it you know he is at least half serious about buying. Hold your ground and play the game.

[2011G6E]

And whatever you do don't let him know how much you really really like it...act like you're on Prozac or something...

[Random Ranger]

Originally Posted by Dr Terry

Not quite correct !

The dealer does not pay any stamp duty, the private buyer pays this when he transfers it into his name, after purchase.

GST only applies to the margin not the whole figure. In other words, if the dealer buys (trades) a car for say $10,000 then later sells it for $15,000, his GST liability is on the $5,000 profit, i.e. $500 (Not the full $1,500).

The margin covers, as you say, RWC, warranty, any-refurbishing costs, labour & overheads.

Dr Terry

Still not quite correct,
I'm guessing (hoping) you're not registered for GST.
If a private seller trades a car for $10, 000 there is NO GST component, but when a dealer sells that same car for $15000 there is GST of $1363.63 included in the sale, plus $571.20 stamp duty, $37.40 transfer fee (vic), rwc, warranty etc etc.
So the $3000 "margin" still isn't that great.
Especially considering the 33% increase in price of the vehicle.

[Blue Shadow]

Originally Posted by adrianb

I'm not convinced on the above approach to only worry about changeover - this is a common dealer tactic to deviate the conversation from trade-in value and new car price. Instead of thinking about the price of your old car & new car, just think about this number in the middle.

To my mind, you want to negotiate the best trade-in value for your car and also the best price for your new car independently. Once you've got a best-offer on both of those by shopping around and some haggling then focus on improving your position.

The dealer will want to make money on the new car sale and the sale of your trade-in (whether they sell it themselves or sell it as wholesale) - they won't take a profit below what they're after on either of them.

If you can sell your old car privately then you'll be very likely to come out ahead financially but at the expense of convenience and having to do things like RWC yourself.

I agree, there is also to many variables when buying new cars, the dealer may have factory rebates on some cars, they maybe on target to get a VB (volume bonus). So you dont really know whats really at stake for the dealer. Also i reckon most people think that their particular car is worth more than it really is, because it has a 2k head unit in it and such, the dealer doesn't give a toss about that its worth 0 to them. So yep change over or finance $$ per month x anount of months. The F & I will make more money from you than the salesman.

[Blue Shadow]

Originally Posted by Random Ranger

Still not quite correct,
I'm guessing (hoping) you're not registered for GST.
If a private seller trades a car for $10, 000 there is NO GST component, but when a dealer sells that same car for $15000 there is GST of $1363.63 included in the sale, plus $571.20 stamp duty, $37.40 transfer fee (vic), rwc, warranty etc etc.
So the $3000 "margin" still isn't that great.
Especially considering the 33% increase in price of the vehicle.

Thats exactly how its done, stamps vary from state to state but thats the formula.

[Rodp]

Originally Posted by axe

Sprint, so as you can imagine not much wiggle room re: price etc. Can't exactly walk away and go somewhere else.

Given the exclusivity of the Sprint and the very quick take up, you're almost at the mercy of the dealer. It's tough to negotiate on a limited and desirable car if you're walking in with a trade as they're unlikely to budge much off the sticker price.

[Rodp]

Originally Posted by RANGEREST

Try buying any registered car from a dealer, and I'll bet it'll be drive away pricing.
As you said by law, new or used.

Unless something has changed recently in NSW, any used car you need to go to the RTA and pay the stamp duty within 10 days of purchase. I've never bought a second hand car 'drive away' but I have seen a few of them advertised on carsales that way while I've been browsing the last few weeks.

[Blue Shadow]

Originally Posted by Rodp

Unless something has changed recently in NSW, any used car you need to go to the RTA and pay the stamp duty within 10 days of purchase. I've never bought a second hand car 'drive away' but I have seen a few of them advertised on carsales that way while I've been browsing the last few weeks.

Dont think it is a requirement in NSW, is in QLD

[Random Ranger]

Originally Posted by Rodp

Unless something has changed recently in NSW, any used car you need to go to the RTA and pay the stamp duty within 10 days of purchase. I've never bought a second hand car 'drive away' but I have seen a few of them advertised on carsales that way while I've been browsing the last few weeks.

Yeah I should have said Victoria.

[FPV+fteT3]

Trade inns at the moment are fairly low across the board as the cost of new cars is low enough that most people buy a new cheapie with 3 year warranty before a good 2nd hand with limited warranty. I will be replacing the FPV with a new vehicle later this year I won't be trading the Falcon as its worth more to me than what I would get trade so the ute will become the spare car and every man needs a ute occasionally plus its a nice ride. Buying a car no trade usually wipes at least 3k off the ticket price.

[Blue Shadow]

Originally Posted by FPV+fteT3

Trade inns at the moment are fairly low across the board as the cost of new cars is low enough that most people buy a new cheapie with 3 year warranty before a good 2nd hand with limited warranty. I will be replacing the FPV with a new vehicle later this year I won't be trading the Falcon as its worth more to me than what I would get trade so the ute will become the spare car and every man needs a ute occasionally plus its a nice ride. Buying a car no trade usually wipes at least 3k off the ticket price.

Thats the best way to go of you can do it. And yes every man needs aute.

[Dr Terry]

Originally Posted by CODSASR

In victoria used cars are drive away

It may well be different in Vic. Are you saying that the rego transfer & stamp duty on that transfer is somehow paid for by the dealer pre-sale or at the time of sale ?

It's easy with new cars, because not many people just walk into a dealership & drive a new car out that minute. It takes time to register the car, fit plates, carry out pre-delivery, detail, wash etc. etc. Most buyers pick up their new car a day or 2 after the purchase itself.

Used cars (in NSW at least) are totally different. Most, if not all used cars are already detailed, registered & 3rd party insured. You can go into any used car yard & drive the car away in the time it takes to sign the paperwork (finance allowing). The transfer into the new owner's name & the attached stamped duty is the responsibility of the buyer. The RMS allows the buyer 14 days to affect transfer, after purchase. This is the same whether you purchase the car privately or thru a licensed dealer.

I realise there are a few differences between NSW & Vic in regard to used car trading, but I didn't know the ALL dealer cars (both new & used) had drive away pricing compulsory in Vic.

The drive away pricing rule introduced for new cars a few years ago, is a Federal Govt, initiative & applies equally in all states.

Dr Terry

[theBlake]

Originally Posted by axe

What sort of price difference should I expect on a trade in at a dealer when buying a new car.

You should find your answer by looking up the value of the car as reported at Redbook.com.au

Dealers will tell you that they dont use this as a guide, but IMO they are lying, they are using *something* as a guide, and Redbook is as close as you are going to get to a ball park figure.

[Blue Shadow]

Originally Posted by Dr Terry

It may well be different in Vic. Are you saying that the rego transfer & stamp duty on that transfer is somehow paid for by the dealer pre-sale or at the time of sale ?

It's easy with new cars, because not many people just walk into a dealership & drive a new car out that minute. It takes time to register the car, fit plates, carry out pre-delivery, detail, wash etc. etc. Most buyers pick up their new car a day or 2 after the purchase itself.

Used cars (in NSW at least) are totally different. Most, if not all used cars are already detailed, registered & 3rd party insured. You can go into any used car yard & drive the car away in the time it takes to sign the paperwork (finance allowing). The transfer into the new owner's name & the attached stamped duty is the responsibility of the buyer. The RMS allows the buyer 14 days to affect transfer, after purchase. This is the same whether you purchase the car privately or thru a licensed dealer.

I realise there are a few differences between NSW & Vic in regard to used car trading, but I didn't know the ALL dealer cars (both new & used) had drive away pricing compulsory in Vic.

The drive away pricing rule introduced for new cars a few years ago, is a Federal Govt, initiative & applies equally in all states.

Dr Terry

Dealers are connected to the authority in their state, they can isdue plates (they have stock of them) they can issue labels and its transfered in the system. The buyer buys the car for xxx plus on road costs third party, s/duty, rego pays the dealer.

[Blue Shadow]

Originally Posted by theBlake

You should find your answer by looking up the value of the car as reported at Redbook.com.au

Dealers will tell you that they dont use this as a guide, but IMO they are lying, they are using *something* as a guide, and Redbook is as close as you are going to get to a ball park figure.

They use glasses guide

[Dr Terry]

Originally Posted by Random Ranger

Still not quite correct,
I'm guessing (hoping) you're not registered for GST.
If a private seller trades a car for $10, 000 there is NO GST component, but when a dealer sells that same car for $15000 there is GST of $1363.63 included in the sale, plus $571.20 stamp duty, $37.40 transfer fee (vic), rwc, warranty etc etc.
So the $3000 "margin" still isn't that great.
Especially considering the 33% increase in price of the vehicle.

Not correct !!

With used cars, like used furniture & a few other items where a licensed dealer is involved, GST is 'deemed' to have been paid on the 2nd hand unit if purchased privately. If the dealer buys the car off another dealer, simple, the GST is stated the sellers invoice.

Using my example above, if a dealer buys (or trades) a car from a private (non-ABN entity) for say $10,000 & then re-sells it for say $15,000. He claims the 'deemed' GST on the $10,000 ($909.09) & receives it as an input credit.

When he receives the $10,000, $1363.63 is the GST component. Therefore $1363.64 minus $909.09 (=$454.54) is the GST payable by the dealer. This figure is same as the GST component of the $5,000 margin.

I didn't realise that Vic used car dealers were forced to include stamp duty & transfer in their advertised price, see my other post, but the GST on that deal is only $454.54, not $1363.63, a big difference.

Dr Terry

[CODSASR]

Originally Posted by Dr Terry

It may well be different in Vic. Are you saying that the rego transfer & stamp duty on that transfer is somehow paid for by the dealer pre-sale or at the time of sale ?

It's easy with new cars, because not many people just walk into a dealership & drive a new car out that minute. It takes time to register the car, fit plates, carry out pre-delivery, detail, wash etc. etc. Most buyers pick up their new car a day or 2 after the purchase itself.

Used cars (in NSW at least) are totally different. Most, if not all used cars are already detailed, registered & 3rd party insured. You can go into any used car yard & drive the car away in the time it takes to sign the paperwork (finance allowing). The transfer into the new owner's name & the attached stamped duty is the responsibility of the buyer. The RMS allows the buyer 14 days to affect transfer, after purchase. This is the same whether you purchase the car privately or thru a licensed dealer.

I realise there are a few differences between NSW & Vic in regard to used car trading, but I didn't know the ALL dealer cars (both new & used) had drive away pricing compulsory in Vic.

The drive away pricing rule introduced for new cars a few years ago, is a Federal Govt, initiative & applies equally in all states.

Dr Terry

Here the dealer transfers the vehicle and pays the fees on behalf of the buyer so sale prices include stamp duty and transfer fee. They have 14 days to transfer which most use a online system through vicroads

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[Dr Terry]

Originally Posted by Blue Shadow

Dealers are connected to the authority in their state, they can isdue plates (they have stock of them) they can issue labels and its transfered in the system. The buyer buys the car for xxx plus on road costs third party, s/duty, rego pays the dealer.

I realise all of that, I am a licensed dealer in NSW, but I was referring to how used cars & new cars are treated differently. Used cars don't need number plates or rego labels issued.

Dr Terry

[Dr Terry]

Originally Posted by CODSASR

Here the dealer transfers the vehicle and pays the fees on behalf of the buyer so sale prices include stamp duty and transfer fee. They have 14 days to transfer which most use a online system through vicroads

In NSW the selling dealer notifies the RMS that he has sold the car to Mr XXX, then Mr XXX has 14 days to transfer the rego into his name, but the new owner pays for that.

Also in NSW, the stamp duty is a % of the vehicle's selling price. Since a lot a price haggling goes on with used car pricing, how does the dealer know how much the stamp duty is, or is this all calculated it the time of the haggling ?

Does this mean that the new owner doesn't pay any fee when he transfers the car into his name online ?

How does this work with private sales ?

Dr Terry

[CODSASR]

Originally Posted by Dr Terry

In NSW the selling dealer notifies the RMS that he has sold the car to Mr XXX, then Mr XXX has 14 days to transfer the rego into his name, but the new owner pays for that.

Also in NSW, the stamp duty is a % of the vehicle's selling price. Since a lot a price haggling goes on with used car pricing, how does the dealer know how much the stamp duty is, or is this all calculated it the time of the haggling ?

Does this mean that the new owner doesn't pay any fee when he transfers the car into his name online ?

How does this work with private sales ?

Dr Terry

The stamp duty on used car is $8.20 per $200 of sale price. If bought from a dealer the buyer does not transfer the rego the dealer does that basicly its pay your money and drive away no contact with vicroads is required from the buyer. If private the buyer has to hand in transfer, roady and pay relevant fees

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