Newsgroups: rec.autos
From: eoates@us.oracle.com
Subject: Re: How Accurate is the Blue Book?
Organization: Oracle Corporation, USA
Distribution: usa
Date: Wed, 19 Aug 1992 22:49:39 GMT
X-Disclaimer: This message was written by an unauthenticated user
              at Oracle Corporation.  The opinions expressed are those
              of the user and not necessarily those of Oracle.

In article <1992Aug19.171410.10431@magnus.acs.ohio-state.edu>, jcasella@magnus.acs.ohio-state.edu (Joseph A Casella) writes:
> This weekend I was shopping for a used car and had a number of interesting 
> exchanges with several of the dealers.  The scenarios went roughly as follows:
> 
> The dealer would show me a car that had a sticker for 1.5-3 times book value 
> and then ask me if I would pay $X for that car today.  I would say no and 
> counter with a price below book value (I have a copy of the NADA prices).  The 
> dealer would then tell me, of course, that he can't sell a car for that 
> much--after all, look at what a cut he was giving me below the sticker price, 
> which he claimed was the retail value of the car.
> 
> At this point, I would reply to the dealer that the price he was showing me was
> not the book value of the car and I was not prepared to buy that car at his 
> price.
> 
> Instead of trying to counter-offer or tell me why his car was worth more,
> several of the dealers got mad, told me that they couldn't buy a car wholesale
> at auction for what I said the book value was, and then, after telling me I
> didn't know the auto industry, proceeded to give me an economics lecture on 
> supply and demand.  (That is, except for the guy who looked at his blue book 
> and, seeing I was right, threw the book across the room and stormed out)
> 
> Is there any chance that these guys weren't lying to me--that their wholesale 
> prices were really higher than the blue book retail prices?  And, for that 
> matter, how much leverage does using book value give you in negotiations with 
> the dealer?  Should I let them know I know the prices or not?

And these very same dealers will drag out the "blue book" when you try to trade
your old car in on a new one and start with "low wholesale" and stard deducting
for mileage, options missing, phase of moon, etc.  

Blue book prices are average prices obtained at auction around the country. 
There is no set depreciator (note that Mercedes hold their value better than
BMW according to the blue book - if there were set formulas, all cars would
be prices using some fixed formula).  Some cars have not "blue book" value
printed, since there are too few changing hands to make any number
statistically significant (such as collectors cars).  But most models are
traded enough at wholesale and retail to allow statistical treatment.

I've found that a good way to deal with used car dealers is
	1.  NEVER NEVER NEVER go to a dealer who sells only used cars.  They
get the dregs from new car dealer trade-ins.
	2.  Search for the new-to-you car at new car dealer used car lots and
in private party transactions.  New car dealers keep only the best of their
trades.  You may even get some sort of warrenty, you are in a better position
to state the condition of the car in writing so you can sue them if they lie. 
You'll probably get a better price from a private party, but anything they say
about the car is probably a fib.  In either case, get a trusted mechanic to
look at your prospective purchase.
	3.  Start your search on Friday evening.  If you find a car you like,
don't get emotionally involved with it!  Just find out the asking price, etc. 
Maybe even deal a bit.  If you happen to get someone to let you purchase for
wholesale + 10 to 15%, go ahead and buy right then.  Otherwise, LEAVE.
        4.  Come back late on Sunday.  If the car is still there, the dealer or
private party will be more willing to deal.  Most cars are sold on weekends,
and if it is still there in Sunday, it is likely that it will be there next
Friday, too!  The seller HATES that.  Use it to your advantage.
	
I bought my last used car this way in 1985: on Friday the sticker was $9000,
slightly lower than high-retail blue book (so the dealer could say it was in
the blue book range!).  Low wholesale was $5500.  Dealer wouldn't budge on
Friday - this 4x4 tercel is really in demand or some such.  I offerred $5500
and he let me leave.  Well, when I came back Sunday, the car was still there,
and guess what?  $5500 was no longer a rediculous offer!  He took that price,
cash, and drove it away with a 72 hour no questions ask return for mechanical
inspection.  TA DA!

Ed Oates (my opinions, not Oracle's)