Worst dealer offer ever?
Thought I would share this, since it seems so bizarre... Was at a dealer the other day and for fun looking at new trailers, as I always pick up an idea or two looking at newer trailers. Mine is fine...
Forum Discussion
It all depends on what your trade is really worth.
We can hardly guess if this deal is bad if you don't tell us the details on your trade.
If it is worth 10K, the deal is pretty good. Basically, they are eating 20K on the trade but not moving off the MSRP. If your trailer is truly worth 31K, they are not moving because they are in business to make money and are throwing you the numbers best for them first.
They have to make it somehow. Here's my reasoning:
What happens if they take a better look at your camper after the deal and find something broken? Or, what if something breaks before it sells? What happens if it sits on their lot until next spring? There is risk with a used unit --maybe less with a new one. The potential to make money on used can be good, but they have to acquire low, sell high.
They have to give money to your bank to pay off your loan right now. The bank doesn't say, "Pay us when you sell that used camper." So, to sell you the new one, they shell out 31K on a hope that they will sell yours quickly for what, 35K, 45K. Maybe even less, right?
Also, the dealer has to pay the salesman commission this week/next week or this month at the latest.
Now, if you owned your trailer out right, they take the title and knock off the trade amount from the deal. Might get you a little better price -maybe.
They are still out the money they had to pay for the new unit sitting on the lot. Most RV manufacturers don't float dealers the costs. A dealer might be working a deal with a bank and paying interest only until they sell -maybe. Most likely, the dealer has the wholesale price wrapped into the new rig you are driving away.
So, lets say they have 60K in the wholesale price. They give your bank 31K. They pay off the 60K they were floating on the wholesale cost. They pay the salesman commission. Let's say 5% = $4,850 (salesman typically make salary + commission) So using 5% as a swag, say $5K to include that portion of your sale that supports his salary + commission and let's not forget the cost of running a business too. So, include that in the 5K number.
So, this dealer has, money, real hard cash, out the door: $60,000+$31,000+$5,000 = $96,000 on that camper that they just sold to you for $97,000. I can see the wholesale price maybe lower, so a little more skin in the game for the dealer.
Typically, dealers are in business to sell. Maybe the unit you are looking at is popular? That would make them tighten their numbers. Maybe they have had three people call or looking at this unit this week? Who knows?
I once had a salesman quit after I walked out the door after making a good offer on a 3/4 ton Yukon with a 1/2 ton F-150 as trade. He quit because his sales manager should have made the deal -thus earning him a commission. The Yukon I wanted was 2 hours away at an unrelated dealer. I bought it with the exact trade a week later for a $2,500 better deal for me. I drove the two hours. So, that salesman was probably right to quit. He was working for a stingy dealer. I was most likely the last straw.
Don't forget, salesman are in on the deal too. They want to maximize their commission but 5% of ZERO is ZERO. If your deal was as bad as you say, it would get old working there.
Was it a bad deal, maybe? But the first offer usually is, right? Most likely, they would have sweetened the deal a little if you countered.
Maybe they read you as a non-serious buyer so they gave you a stinker of a deal to run you off?
The numbers don't look that bad without the benefit of knowing what your trade is really worth.
We can hardly guess if this deal is bad if you don't tell us the details on your trade.
If it is worth 10K, the deal is pretty good. Basically, they are eating 20K on the trade but not moving off the MSRP. If your trailer is truly worth 31K, they are not moving because they are in business to make money and are throwing you the numbers best for them first.
They have to make it somehow. Here's my reasoning:
What happens if they take a better look at your camper after the deal and find something broken? Or, what if something breaks before it sells? What happens if it sits on their lot until next spring? There is risk with a used unit --maybe less with a new one. The potential to make money on used can be good, but they have to acquire low, sell high.
They have to give money to your bank to pay off your loan right now. The bank doesn't say, "Pay us when you sell that used camper." So, to sell you the new one, they shell out 31K on a hope that they will sell yours quickly for what, 35K, 45K. Maybe even less, right?
Also, the dealer has to pay the salesman commission this week/next week or this month at the latest.
Now, if you owned your trailer out right, they take the title and knock off the trade amount from the deal. Might get you a little better price -maybe.
They are still out the money they had to pay for the new unit sitting on the lot. Most RV manufacturers don't float dealers the costs. A dealer might be working a deal with a bank and paying interest only until they sell -maybe. Most likely, the dealer has the wholesale price wrapped into the new rig you are driving away.
So, lets say they have 60K in the wholesale price. They give your bank 31K. They pay off the 60K they were floating on the wholesale cost. They pay the salesman commission. Let's say 5% = $4,850 (salesman typically make salary + commission) So using 5% as a swag, say $5K to include that portion of your sale that supports his salary + commission and let's not forget the cost of running a business too. So, include that in the 5K number.
So, this dealer has, money, real hard cash, out the door: $60,000+$31,000+$5,000 = $96,000 on that camper that they just sold to you for $97,000. I can see the wholesale price maybe lower, so a little more skin in the game for the dealer.
Typically, dealers are in business to sell. Maybe the unit you are looking at is popular? That would make them tighten their numbers. Maybe they have had three people call or looking at this unit this week? Who knows?
I once had a salesman quit after I walked out the door after making a good offer on a 3/4 ton Yukon with a 1/2 ton F-150 as trade. He quit because his sales manager should have made the deal -thus earning him a commission. The Yukon I wanted was 2 hours away at an unrelated dealer. I bought it with the exact trade a week later for a $2,500 better deal for me. I drove the two hours. So, that salesman was probably right to quit. He was working for a stingy dealer. I was most likely the last straw.
Don't forget, salesman are in on the deal too. They want to maximize their commission but 5% of ZERO is ZERO. If your deal was as bad as you say, it would get old working there.
Was it a bad deal, maybe? But the first offer usually is, right? Most likely, they would have sweetened the deal a little if you countered.
Maybe they read you as a non-serious buyer so they gave you a stinker of a deal to run you off?
The numbers don't look that bad without the benefit of knowing what your trade is really worth.
