Wholesaler - Have I been fed a line?

[shumacher]

I looked at an older SUV stuffed into some distant corner of a huge new car lot. I talked to a used car salesperson there. They had trouble finding the keys. Once we got out there, the truck looked decent, and I was considering placing an offer. The problem is that the salesperson told me that a wholesaler had made an offer to them of $3000. Now, I'm just looking for someone who is not this dealer to explain this process to me, because I found the Edmunds TMV for Dealer Retail to be around $2100. I would think a wholesaler would offer them more like $1200-$1400, possibly less, as the offer didn't involve an inspection.

Also, if this is a fib, could this be the salesman I'm dealing with? The place is up to their ears in business as it is in an area hit by katrina, just north enough to be out of storm surge, but south enough to be easy to get to. Maybe he doesn't think he stands to make enough from the deal.

[JLad10687]

That is strange, it probably is just the salesman trying to mark up the prices. Ask him why a wholesaler would pay that much.

[harrymay]

yeah, and id stay away from it if i were you. its screaming flooded all over it.

[MagicRat]

I am sure that's a line.
Many (but not all) sales people lie a lot. I work with sales people who lie all the time. They take pride in coming up with believable stories that are simply not true at all. Frankly, it sickens me.

Dealers generally do not accept offers from wholesalers on individual vehicles. The wholesaler offers a fixed amount for a group of vehicles; not just one at a time, and its always on vehicles the dealership knows thet do not want to sell. Such cars are usually not even sold to the public. The dealer sends them straight to the wholesaler.

Usually the wholesaler is cheap. If you think $3000 is too high for a buyer to pay, its definitely way too high for a wholesaler.

[Jeremy02XType]

They take pride in coming up with believable stories that are simply not true at all. Frankly, it sickens me.

sounds like what customers say all the time

customers lie and decieve just as much as salespeople do. when you inflate your payoff to try to get more for a trade. when you say you have no idea what youre looking for just to shut someone up

[shumacher]

Originally Posted by Jeremy02XType

They take pride in coming up with believable stories that are simply not true at all. Frankly, it sickens me.

sounds like what customers say all the time

customers lie and decieve just as much as salespeople do. when you inflate your payoff to try to get more for a trade. when you say you have no idea what youre looking for just to shut someone up

Yeah, I've been in sales. I've been a salesperson and a sales manager, though never in cars. Somehow, sales experience doesn't translate into being a remarkably savvy buyer, at least in my case. I've known other salespeople to say the same thing. In my field, it was a rare day when we would negotiate a price. I hated it when customers would try all sorts of sillyness to push for a discount.

[shumacher]

Originally Posted by MagicRat

I am sure that's a line.
Many (but not all) sales people lie a lot. I work with sales people who lie all the time. They take pride in coming up with believable stories that are simply not true at all. Frankly, it sickens me.

Dealers generally do not accept offers from wholesalers on individual vehicles. The wholesaler offers a fixed amount for a group of vehicles; not just one at a time, and its always on vehicles the dealership knows thet do not want to sell. Such cars are usually not even sold to the public. The dealer sends them straight to the wholesaler.

Usually the wholesaler is cheap. If you think $3000 is too high for a buyer to pay, its definitely way too high for a wholesaler.

Thanks a bunch! That's the kind of inside-the-business info I was looking for. It's been a while - I might go see if the truck is still languishing on their backlot.

[Banjoman10]

Wholesalers sell in auctions, (restricted!) to Dealers. Period.

[Jeremy02XType]

well ultimately a wholesaler whether they are buying or selling will buy from or sell to whoever he can get the most from or pay the least for. I know plenty of wholesalers who will go through the WantAd or Ebay looking for cars to re sell. There is just less legal mumbo jumbo with auctions and buying/selling to and from other dealers, and people dont call you up whining the next day if there is a minor problem with the car.

But back to buyers are liars. I had a customer trading in a Volkswagen a few days ago. During the appraisal process I specifically ask the guy (who by chance is a certified freakign mechanic) is there any engine issues, sputtering, hesitation anything? Nope Nope Nope the engine runs great Ive done everything to that car myself from day one. Ok so my mgr takes it out for a drive. The thing could barely rev past 2k rpm and couldnt shift out of second gear cuz you couldnt get the rpm high enough. So we get back and the guy was like well yeah I did notice a little something start up a few days ago, I guess I forgot about that. Could you imagine if I did someting like that as the delaer trying to sell him a used car

[NOBU-SAN]

Hold on, hold on. Wholesaler is nothing but a term used to describe someone who posesses a wholesaler's license. They could own buy-here-pay-here lots, or strictly do business at auctions. Almost every used car manager has one. They most certainly do not bid on "lots" of cars. One bid at a time. They won't say I'll give you 30k for those 6 cars over there, that's be poor business savvy. Wholesalers have two things for sure, cash flow, and business savvy.Cars are no different than any other business. People just think they shouldn't have to pay what retail is. Fine, there is always common ground to be found.

A wholesaler may have bid more than KBB or Black Book because he has a buyer or is going to handle the finance himself(Buy here pay here). If he pays 3k and the car books out a 2k, he can still charge someone with bad credit 7500 if he finances it himself(Banks won't allow that, that's second chance finance and they can't rape a customer because the bank won't have it).

[Jeremy02XType]

"They most certainly do not bid on "lots" of cars. One bid at a time. They won't say I'll give you 30k for those 6 cars over there"

uh bud that is exactly what big wholesalers do. i suppose when our wholesaler comes back with 25 convertible mustangs up from dollar rent a car in FL and theyre all 6 mo old with 22k and theyre all the same price he went through a one by one bid process. No. And do you think a company like that selling those cars would be looking for someone to buy a lot of 10+ or 10 different people to each buy one.

And just because a buy here pay here guy can make a ton of money per car doesnt mean he will pay more than the car is worth. what if the buyer only makes 2 payments and when he reposesses the car it's trashed and worth nothing?

Do you actually work in the auto sales business or are you just expessing opinions?

[jeffcoslacker]

Originally Posted by shumacher

I looked at an older SUV stuffed into some distant corner of a huge new car lot. I talked to a used car salesperson there. They had trouble finding the keys. Once we got out there, the truck looked decent, and I was considering placing an offer. The problem is that the salesperson told me that a wholesaler had made an offer to them of $3000. Now, I'm just looking for someone who is not this dealer to explain this process to me, because I found the Edmunds TMV for Dealer Retail to be around $2100. I would think a wholesaler would offer them more like $1200-$1400, possibly less, as the offer didn't involve an inspection.

Also, if this is a fib, could this be the salesman I'm dealing with? The place is up to their ears in business as it is in an area hit by katrina, just north enough to be out of storm surge, but south enough to be easy to get to. Maybe he doesn't think he stands to make enough from the deal.

How do you tell when a car salesman is lying?

His mouth is moving.

I've only met one or two in my LIFE that could be trusted, and they were both older guys that had made their money and weren't as "hungry" as the young cubs.

Is the vehicle unprepped?(no sticker, still needs a clean up)

When I buy a car, I use the experience of working on BHPH car lots, over 20 years of wrenching, not to mention being a repo man and more. I've been all around that business (wholesale and auction also)

I go to the back of the new car dealer lots, and look for the cars back there that are not gathering dust, but rather look like they were just parked, have no license plates and no personal items in them, usually need cleaning. Those are ones that were just traded in on new cars.

Make a lowball deal on one of those, take it unprepped and without a mechanical going-over if you feel comfortable to make that kind of call, and you can buy like a wholesaler. They love to get rid of those before having to put any time or money in them.

The last one I got 2 years ago was just like that, a 1998 ZX2 with power sunroof, CD changer, new tires, 50,000 miles, great little car for my wife. Retail book at about $5595. Offered them $2000 for it, they laughed at me. Gave them my phone number and they ended up calling me later that day and said they'd sell it for $3000. After kicking it around for an hour, we got to $2700 and I took it.

Somebody said they don't buy lots. When I worked at the lot, we would go and find 8-10 cars we liked outta the trade-ins at big dealers, and generally they'd want us to take a few that we didn't really want, and we'd go round and round until we settled on a mutually acceptable price for all 12 or whatever.

Don't even consider buying a car from an auction, even if you are connected enough to do so. Unless you are part ASE mechanic, part body man, and part psychic, chances are you're gonna get screwed. We used to get maybe three from different dealers and salvage, all the same model (say one with a bad tranny, one engine fire with a great interior, and one beater with a good motor), and take the good stuff from each and put together one decent car and run it out to the auction. I'd trust one of those as far as I could throw it.

Ultimately, if you are spending so little that the car is not going to have any warrantee, buy from a private seller. Stay away from car lots.

[jeffcoslacker]

Originally Posted by Jeremy02XType

"And just because a buy here pay here guy can make a ton of money per car doesnt mean he will pay more than the car is worth. what if the buyer only makes 2 payments and when he reposesses the car it's trashed and worth nothing?

?

The lot I worked on (BHPH), we practiced what we called "redline", that being the down payment on the windshield was the amount we paid for the car, plus title work, repairs, etc. So even if the guy drives off the edge of the Earth after leaving the lot and we never see him or the car agin, we lost nothing. I'd think that's pretty typical.

[Jeremy02XType]

How do you tell when a car salesman is lying?

His mouth is moving.

Does this include you? lol If you worked in the business of selling cars to the public for any length of time you will know that the customers lie/decieve just as much if not more than the salespeople do. Buyers are Liars and dealers are stealers.

"Don't even consider buying a car from an auction, even if you are connected enough to do so."

How is this any different from "I go to the back of the new car dealer lots, and look for the cars back there that are not gathering dust, but rather look like they were just parked, have no license plates and no personal items in them, usually need cleaning. Those are ones that were just traded in on new cars."

3 out of 4 of the above referenced cars that would be behind our dealership after a weekend end up at the auction anyway. My personal history with auction cars. 1992 Toyota MR2 side swiped and needed body repair red t-top stick with 59k tmu and salvage title. paid $2k for the car spent $2k on the repair. Drove it almost 30k with nothing more than replacing a belt and brakes and then sold it for $5k a yr later. 1994 Acura Integra from Lynnway, MA 197k green stick sedan paid $2200 and even that was a fight with 2 other kids there, drove it to 235k with nothing more than brakes, tires, exhaust and then sold it for $1500. 1988 Honda Accord from the same auction a few yrs later bought with 202k and drove that for almost 9 months as an interim car replacing nothing more than tires and a oil change. You can get plenty of good cars at auction

[Jeremy02XType]

oh i also forgot to throw in my 1995 Mazda MX6 5spd V6 i bought at the same auction as the others. 179k when i bought it there for $600. After i bought it i replaced cv joints for $250, a set of tires, brakes 6 mo later and an exhaust system 4 months after the brakes. drove it over 30k and then sold it for $250. come to think of it the last several cars ive bought i had great luck with

I will definitely agree with what he said about if you are looking to spend short money on a car as in under $10k. Definitely go private party not dealer for that kind of car, are there some dealer cars that are great vehicles under $10k of course but for the most part you will get a lot more for your money from a private seller than a dealer and have a chance to actually see the person who drove it for X years and talk to them about the car