The wife and I took our 17k miles 04 MCS w/ JCW to the dealer to talk about an 05 model. We were offered a very low trade in value on our car. The dealer said it was in great shape and all but suggested we would get a much better value by selling it ourselves.

So my question is "Do MINI dealers NOT want to handle pre owned cars and prefer to sell only the new ones?"

Any one have an opinion? We live in the mid western part of the country.

Thanks for your thoughts.


Bear

 

from what i understand, dealers are having trouble moving the used cars if the give you the full trade-in value because the prices end up being so close to a new car. soooooo, it seems the trend is to low-ball the possible trade. i could be wrong though.

 

The dealers make LOTS of money on trade-ins! They make very little on each actual new MINI sale. The dough is in selling accessories, after-market items, and in selling used cars. They will offer you a price that is equivalent to wholesale. It is always better to sell the MINI yourself. I was too lazy, traded my first one in for Wanda. But I was leaving on my first roadtrip, and didn't have time to deal with the resale.


Clover

 

Just simple economics. The dealer can generally make more profit on pre-owned vehicles than on new ones, especially given competition from other dealers, manufacturer incentives/rebates, educated consumers, etc. That said, MINI dealers have been "spoiled" with relatively good margins on the new MINIs but still expect to make more profit on used ones - or at least similar to the profit they can make on the new ones. Even with MINIs, the market can only bear so much. The dealer has to get that margin somewhere - and it is by offering you less on trade than they can sell it for on the market. The reason you keep reading about good residual values is because the consumer will still pay a relatively high amount for these cars - but don't confuse wholesale and retail pricing

It is the same with ALL cars. There are a lot of ways to look at/explain this, but it all boils down to the same thing. Dealers are in business to make money selling and servicing cars.

Chances are good that the dealer offered you about $2k - $3k less than you should be able to retail it for yourself. You do the math. A dealer has to factor in any cost it has to "invest" to bring your car to "Retail" condition and still have a profit. They will probably need to buy four new tires, detail the car (whether it needs it or not, it is usually paid for), have a technician give it a once-over (at the going BMW/MINI labor rate for your shop.), pay the lot attendant to keep it clean and shuffle it around the lot, fill the gas tank, pay the newspaper and the Internet advert. bills, pay a sales commission, etc. etc.

Simple economics.

You have to decide for yourself if it is worth the hassle of trying to sell the car on your own. For many people it isn't worth it. How many people to you have to deal with? How much time will it take? Do you pay for ads? Can you negotiate the sale well and get "top dollar?" How much time will it take? Time is a big factor for most people - not just how long will it take to find a buyer, but how much time do you spend dealing with the whole process.

Good luck with your decision! Cheers!

 

If you have a CarMax near you, try there. When I asked the MINI dealer about trading in my Maxima, they told me that the price that they (MINI) would offer me would be crap. They recommended private sale, or through CarMax. I took it to CarMax, and while they didn't offer what I would have sold it for privately, it was still a decent price (a couple thousand above Blue Book), and they pay off your current loan and/or give you a cashiers check right then and there. With my situation, I payed off my loan, and had a good amount of money left over for a down payment on my MINI!

The only thing I would be wary of is them correctly pricing the JCW kit.

-Paul!

 

I was pretty lucky I guess. I went and had them tell me how much my car was worth a month ago and they quoted me exactly what I owe on it. Maybe its just my mileage. 10k and about 10 months old.

 

I got very lucky myself, while I tread in my 2002 MCS (48,000k) for 2005 MCS and they just pay off what I owe. So I walk out with a New MCS on the same day with lower interests and the best thing is my payment are lower new but I just have to start it all over again for 5 years

 

Above posts are right, the new car dealers normally have a 15% margin target, on average, for trade-ins. Some get more than 15%. It makes absolutely no sense economically to trade any car into a dealer for a new model.

Selling a car is simple with venues such as EBay. Easy, quick, and safe (you can set your reserve as high as you wish). I've sold several cars there, it's a snap. EBay reaches the largest possible market. Local newspaper is a great place to begin if you don't like EBay. Just use the ad venue that reaches the largest market.

Selling a car requires only a few hours or less of actual, direct involvement. Let's exaggerate and say it takes six hours (actual time is more like 2-3 hours). If we save 10% of our $15,000 MINI with an 6-hour investment of time, we earn $250 per hour for our time (in reality, it will be roughly twice that amount)! What are you earning per hour now????

If your MINI is worth, say, $15,000 retail, the dealer will offer approximately $12-$13,000. Forget about it!!! Sell the car yourself and put the extra thousands of dollars in your pocket! Or better yet, order a JCW package with the proceeds!

Or, you can trade it in. After all, it's only money . . .

 

Because dealer's are in the business of making money and when it comes to trade ins you can never expect them to give you a price close to used retail market values.

I sold my '04 MCS with 17K miles (Plain jane MCS) for $700 above original sticker price on a private sale in early February.

If you want to get max $$$ for your '04 MCS with JCW, sell it yourself.

I highly recommend placing an ad in www.cars.com. Get the $50 "Premium ad" package that allows up to 12 photos uploaded and runs until the car sells.

I sold my '04 in just 6 days after placing the ad in cars.com.

 

Does the trade-in not reduce the sales tax due by that amount?

In Ohio that means selling the vehicle for some amount greater than the 7% difference. I would agree that if a private sale produced a 15% difference it would well worth the effort, otherwise it doesn't make much sense.

I was disappointed when the dealer told me that they would only allow the lowest book value regardless of condition or desirability, that doesn't make good business sense in every case.

I agree with some of the other comments regarding the cost of getting a used car ready to sell, a dealer friend told me they average over $500 per unit in prep charges.

 

It doesn't reduce the sales tax in Ca. It counts as a down payment..unless Ahnold change that(not!~)

 

Wonderful discussion. Thanks for your opinions.


Bear

 

Carmax worked well for me too. Drove down the street from the MINI dealer and made an extra $2000.

 

I was reciently looking at a used 04 mc auto for my wife. local dealer wanted 23500... Ok, It did had all options except nav and not a S. Knowing that they didnt give wholesale for the car... It booked at 19100. ( a while back, I had tryed to trade my 02 cooper to the same dealer, the car was 18months old with 9k miles. they offerd me 1000 under wholesale. The car had not one ding, chip, scratch... I never even drove it in the rain..) Ill say they are making bank on the used ones.... Just not from me

 

I don't ever recall hearing someone say - "Man! I got such a good deal on my trade!"

 

Here's another tidbit to consider: If you go to buy a new car at let's say a Jaguar dealer, chances are much better that they would show you a good trade-in value for your MINI. Trouble here is there are such HUGE incentives on some of their models that they have room to play with. At one point there was $20k worth of incentives/rebates on the XJ8 (or was it the XK8?)! A dealer who owned both Jag and MINI franchises could have offered a free MINI with every car and still made money! Jaguar is just an extreme example (which is probably not even current), but most other makes are similar in that there is some kind of incentive to the dealer from the manufacturer that gives them a cushion to negotiate from. It is actually very common for dealers to over-allow on trade values - because it usually makes the customer feel better about the deal in general. But it all comes out in the wash more or less, because the Jaguar's depreciation startsafter you subtract the $20k - not from the sticker price. So, if you were to take the Jaguar and try to trade it in the very next day, you'd probably get an offer that is $23K (or likely more) lower than the original price of the vehicle. This is also a reason it is good that the MINI still sells for MSRP - and the basic reason why used retail prices are still so high.

With a new MINI, however, the manufacturer is not offering ANY incentive to dealers. The cost is the cost. The only way the dealers can make "decent" profit on a new MINI is to keep the trade values at Actual Cash Value instead of over-allowing on the trade - to make the customer feel better - and also to keep the price of the new MINI at MSRP. Of course, the demand/supply equation is a factor in all of this.

This begins to delve into the whole "art of the deal" and why it frequently seems complicated to follow the numbers when negotiating at a dealership - They keep shuffling money around to different places in order to find a combination of payment/trade-value/term/rate/etc. the customer is agreeable to - all while trying to keep the profit as high as possible. At least with MINI it's pretty straightforward - to the point of blunt (as with the trade value) - there's very little place to "hide" money in the deal.

Vagt6 makes a good point the the advent of Internet services like Ebay, autotrader, cars.com, etc. helps you to reach a very broad audience that highly improves your chance of connecting with a buyer willing to pay prices much closer to retail.

Hopefully somehow this is helpful to you! :smile:

 

Something else to consider on trade-ins is if your state will only charge you tax on the difference between your trade and the value of the new car. WA is one of those states.

So for example, if I was able to get $20k in trade for our car I would save $1600 in taxes on the new car. That means if I can't get more than $21,600 for our car as a private party sale, it makes more sense to trade in.

I would go so far as to tack another $1k onto that number for the convenience factor of not dealing with the sale, which brings that figure to $22,600. So I could see a situation where trading in this car would make as much sense as selling it outright.

 

One of the top 5 things to remember when negotiating a car purchase at a dealer is never tell them that you have a trade until you've agreed on a price for the car you are buying. Just focus on the new car number, and once that is where you want it, then bring up the trade, even if you've told them prior you aren't trading anything in.

Some others are never negotiate monthly payments (only negotiate purchase price), have your financing worked out at your bank before shopping, never fall in love with a car, never sign anything until you've agreed to a price and always remember that you can control the negotiations with your feet - ie walking away.

One more thing, if they ever pull out a piece of paper and draw a big plus sign on it: + they are about to 4-square you. The only purpose of the 4-square is to confuse you with numbers to the dealer's benefit. Don't pay attention to anything they write on that piece of paper or say about anything written on that piece of paper.

 

Since many people have an inflated value of what their trade-in is worth, most dealers add the discount off the new vehicle to the value of the trade. Thus some of the money that you were "allowed" on the trade is money that you would have received even if you had no trade. With the MINI, since there is usually no discount, the dealer does not have this cushion of money to play with. He has to tell you what your trade is actually worth to him. The fact is, that with re-sale values being so high, it would be tough for the dealer to make you an offer that sounds reasonable. The dealer needs to make a fairly large profit on the used car as he usually has to warranty it for a time as well as the other expenses that have been mentioned.

 

MINI dealers usually have a tough time moving out used MINIs because of the high resale values. Often the used ones are only hundreds less than a brand new MINI. Unless you are desperate about getting into a MINI and don't care whether you get it used or new and want a car right away, used may be the way to go.

The people that bought my '04 MCS from me, were desperate, had cash on hand and didn't want to wait to order a new one and couldn't care less if the car was used or new. All they cared about was the miles, condition and the fact that it still had warranty left on it. The profile of the used MINI buyer is quite interesting and doesn't fit the mold of the typical used car buyer.

Also some people dislike dealing with dealerships and prefer to buy second hand (used) from private buyers.

If you come accross such type of used MINI buyer, you'll be in luck.

 

In most cases, used MINIs still have lots of factory warranty left, so no additional cost to the dealer on this regard.

 

It's not clear how your example saves on taxes. You only pay tax on the assessed value of each car while it's owned, and you're refunded overpaid tax on the old one on a pro-rata basis. How does trading it in save tax money over selling the car yourself?

Also, how did you arrive at $1,000 for the "inconvenince factor"? Is there a formula for calculating it?

Fuzzy math, it seems.

 

I'm not sure I understand this statement. In WA you pay tax on a car once when you get it at about 8%. If you buy a 25k car, and trade in a 20k car you only pay tax on 5k. Tax on 25k=$2000, tax on 5k=$400. I understand these tax laws vary from state to state.

The $1000 is an arbitratry number that I gave to the amount of time and effort I would anticipate spending on selling a car. Would I take $1000 from someone to sell a car for them? Yes. But the fact that it's my car and if it doesn't sell right away I'm still making payments on it, and the gamble of the selling price vs tax savings makes the $1k number seem about right to me.

 

A few months ago we traded our '96 Chrysler Sebring ragtop in on an '05 Scion xB. The Sebring had over 90K on the clock, lots of rock chips, stained upholstery, a leaky top, worn tires, etc. They gave us over BlueBook private seller price - because Toyota does not let their dealers negotiate the price on new Scions. Man! we got such a good deal on our trade!

 

Haveing had been a wholesaler for 10 years..( mosty as a hobby to make a few bucks with my love of cars) here is the bottom line. When it comes to cars and dealers,,, a mini is just a car. now, when it comes to trade in, It is one of the only general produced cars that if the person tradeing it in knows somewhat what his is doing, you can get wholesale for the mini if it is is near perfict condition .( most cars will get between 1500-3000 under WS ) The dealers bottom line can be skewed by more angles then the dragon run. But just know this, The kelley Blue WHOLESALE for the mini, Dealer Cost for new car ( the closest the ave consumer can come to this is book it opt for opt at Edmunds.com then subtract any insentives also found under edmunds) then you pay the differance of the 2 cars. Now, if you owe more than KBB W/S... take the differance and add it back in to the bottom line. then add Tax, lic, and doc fees. ( some states the tax is on the differance of the new car$ - trade car $ ) lic varies per state, and doc fees should much exceed 300.00

Lets say you owe 15k on you mini, the wholesale is 17k. If you get the 17k from the dealer, you get to keep the 2k differance.. now you take that 2k and subtract if from the $ you calculated from edmunds.com on the new car.

thats it in a nut shell... of course, this is very general, each persons senario will vary... but its a good general format.