Hey Cool Car Fans,
Each week I have people contact me about helping them find a vehicle for their personal use or for a family member. Why wouldn’t you contact me? I’m free! I buy, sell, trade and lease vehicles everyday and you do it once every three, four, five or ten years. I only get paid if I deliver you a vehicle, so it’s like turning down free legal advice.
Unfortunately, I get so many people who are looking for the “deal” and they refuse to listen to me and then I get emails like this one below.
“Hi John, We are in a confused bind. Our son bought a used 2003 Mitsubishi Eclipse GS off of Craigslist and we have, put a new battery, new starter, new radiator, new thermostat, new tires and rims. Basically, the $3,000 car is now $5,600. It is overheating, and could be the water pump, which they have this $800 kit to also do the timing belt. No guarantee it will fix the overheating issue. So, We would like to sort of cut our losses, trade this car in for him to find one that will hopefully last a few years. Not sure what we can get for his car or what the heck to do. Help.”
I have a saying that I picked up years ago from another guy who had sold cars for a few decades. We were watching cars go through the dealer auction and there was a pretty big spread for the exact same vehicle. This was because one vehicle was in excellent condition and another was in fair condition and still another was in rough condition. The condition makes a huge difference on what you can expect to pay for a vehicle and people do not always take this into consideration when car shopping like the people above found out the hard way.
While we were watching cars go through the sale, he made a comment to me that I share this with my clients all the time. These are words to live by when it comes to looking at automobiles because no two used vehicles are the same, regardless of what Kelly Blue Book or NADA might be telling you. They are simply a guideline on what a vehicle should sell for. We were laughing about how these cars had a $2,000 to $3,000 difference in price for the exact same vehicle and he turned to me and said, “Nice cars are not cheap and cheap cars are not nice.” and then he laughed and walked away.
If you learn nothing else from visiting CoolCarGuy.com just remember what I just said when you’re out looking for a use vehicle. You can learn from my years of experience, since I have looked at thousands of vehicles. It’s the old saying that if it sounds too good to be true then it probably is. Sure, there are some deals to be had when looking at vehicles, but what most people fail to realize is that used vehicles have already depreciated compared to the original MSRP. This is true even when you’re looking at paying retail book for a used vehicle. You are much better off paying retail book for a vehicle that needs nothing and that has been well maintained that getting someone else’s vehicle that is a piece of junk.
I do not inventory vehicles like most dealers. There is a very simple reason why I do not inventory vehicles. Cars and trucks depreciate and each month there are several third-party experts that do not purchase vehicles that come out with their books to tell the world what a used vehicle should be worth. They are Kelly Blue Book and the NADA book and everyone has access to them for wholesale and retail prices based on the national depreciation based on what the vehicle should be worth. However, this data comes from auction sales and other sales data in the marketplace. I just told you how there can be a $3,000 spread between the same two vehicles running through the Dealer Auction based on the condition or if it has a clean CARFAX or a number of other factors.
What these books cannot tell you is that no two used vehicles are the same. This is because they are used cars and people drive differently, they take care of their vehicles differently and they have different ideas about cars. Some people trash their cars, they let their dogs live in them, they smoke in them, they don’t care about the vehicle, they don’t change the oil, etc.
You could look at two 2003 Porsche Boxster’s, each with about 25,000 miles and one was hanging out on the East Coast, the driver took it out a few times in the Winter for fun with his friends, with salt on the roads and mag chloride to do some donuts in a parking lot. He didn’t wash it regularly, so rust is forming underneath it, and he also didn’t change the oil regularly. They both have low miles and look great on the Internet, but the guy rode the clutch and was grinding the gears when he did drive it, he parked it outside on the street got a few door dings and somebody backed into the front bumper that he had fixed at a local body shop on the recommendation of his friend and paid cash. By doing that he kept it out of CARFAX, so you think you have a vehicle that has not been in an accident, but there is no way for you to tell without an expert looking at it. Are you getting the picture?
The other vehicle was in Colorado, garage kept, never was even out in the rain, while the guy owned it. He kept it covered, changed the oil even when he wasn’t driving it much and he treated it like a baby. He had rebuilt Jeeps on the side, was an Engineer and extremely meticulous about his vehicles. The one vehicle is placed on consignment for retail book value, which I did for a client recently by the way and his car was in mint condition.
It was purchased by a gentlemen up in Steamboat Springs and he got a really nice vehicle. The other one was traded with a used car dealer and he put it on Ebay for wholesale book because he ripped the vehicle apart with his paint meter when it showed up from the first guy. You the consumer don’t know this because you are not in the car business. However, you think you are an expert because you see these deals on Ebay and Craigslist all the time, so you know what the market should be without ever even cracking open KBB or NADA to see what the retail and wholesale price should really be for that particular vehicle.
These were the people who called me on this Porsche that I had for sale and told me about the lower priced vehicles they saw on Ebay and said that they wouldn’t pay the retail price for the vehicle. My response was “good luck” because you’re going to get what you pay for because “Nice cars are not cheap and cheap cars are not nice.”.
Let’s hypothetically say that the difference between wholesale and retail is about $3,100 for a Porsche that sold new for $42,600. That is about 7% of the original purchase price of a vehicle that only has been driven 3,000 miles a year. This been my experience over and over because I get the phone calls from people when I have a consignment and they are more than willing to buy the car that is a potential nightmare with oil leaks and other issues because they are looking for the deal. What they fail to realize is that “nice cars are not cheap and cheap cars are not nice.” and if they did then they would spend the additional $3,000 and pay closer to retail book instead of trying to pay closer to wholesale book and get the right vehicle.
Instead, most people will take the cheap car to their mechanic and have them check it out and then get the $3,000 bill over time from their mechanic who loves them. I know that many of you don’t believe me, but that’s okay because I see it all the time. I get the calls and emails from people telling me their nightmares that they want me to help them solve. They end up making payments to their mechanic because they thought they were saving so much money. Don’t get me wrong because there are some cars that are just lemons and you can’t always protect yourself from buying a bad vehicle, which everyone in the car industry has done at least once or twice in their career. Most of the time though people are either buying someone else’s nightmare or creating their own.
Before I end this post, let me make it clear that just because a vehicle is priced at Retail Book doesn’t make it a nice vehicle either. I’m simply pointing out the fact that nice cars are not cheap, most of the time. I have access to the Dealer Auctions and I see some really great vehicles that I can buy closer to wholesale book than retail book and I pass the savings on to my clients. I recently got a client a 2012 Infiniti G37x S model that was going up for sale with only 14,500 miles on it and still under warranty.
I got that vehicle for my client back of retail book and they will get a really nice vehicle. I’ve also seen vehicles being sold for retail book by some dealers that don’t do anything to them. They don’t fix the brakes, change the oil, do the things necessary to sell the vehicle for retail book.
It is always buyer beware when purchasing a vehicle, but hopefully I’ve given you some things to consider when you are looking at purchasing a used vehicle.
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Auto Consultant – John Boyd: The Cool Car Guy
John is an auto consultant with his license at a car dealership in Denver, Colorado. He can help you save time and money on any make or model, new or used, lease or purchase – nationwide! Call or email John about your next vehicle! jboyd@coolcarguy.com or Twitter @coolcarguy