2018 Limited on the lot for $21,000 with 10K miles - Jeep Compass Forum
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post #1 of 5 Old 01-12-2019, 01:18 AM Thread Starter
Join Date: Oct 2018
Posts: 87
2018 Limited on the lot for $21,000 with 10K miles

Let's see.... MSRP $30,600 The best anyone could have bought it for was $25,000 + taxes -- let's say $2000 in taxes. Total of $27,000 (Including rebate and employee discount) Dealer trade in for this car right now averages around $18,000 +/- $800 Kelly Blue Book value.

(This meant someone lost $9000 driving around for 10,000 miles in 1 year. That's a whopping $750 a month)

If the same dealer sold this car new, bought it back and sold it again for the asking price of $21,000. They will be making $10,000 for the same car in addition to the profits they made the first time. These profits may include, hold backs, floor plan, advertising, FCA employee discount reimbursements and finance manager miscellaneous bag of tricks like, warranties, paint/fabric protection, life/health/disability insurance, and finance interest "reserve" (for example: getting a loan at 1% and selling it to the consumer for 3%)

Even if you didn't fall for those bananas in the tail pipe, they will still make a cool $10K
Selling--buying--reselling the same car.
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post #2 of 5 Old 01-12-2019, 05:40 AM
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There is a simple solution. Abandon the dealer system and let manufactures make direct sales like they do in Europe. It is such a dumb and backward system that is only there so that the middle man making money on the expense of customer paying 20% more then what you should pay.

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post #3 of 5 Old 01-12-2019, 09:02 AM
Join Date: Dec 2018
Posts: 33
Although there is a ton of value in slightly used cars, there is always a story with a quick return and you just hope it's a good one.

Reposession is a good one. Someone with poor finances or bad luck can't pay for their car.

Life change - moving for work, being deployed abroad, all possible reasons to give up a car early regardless of the financials

Lemon law return. Depending on your state, not all returns need to be reported as such. Potential red flag if it's the case.

Water damage, but didn't claim insurance to keep the clean title. Problematic if so and electric Gremlins and mildew smell abound.

That said... It could just be a regular trade in. Depending on state, most let you apply the trade in to offset taxes. So let's just think of the 6-7k losses and the tax on that. At 18k miles, you are paying over 30c a mile. Maybe the dealer gave him a good trade and making money on the new sale and he's down to 25c a mile. Most likely it's a for $X month more and a longer loan term I can get you into this shinier new car and people forget how much they actually lost.
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post #4 of 5 Old 01-13-2019, 01:40 PM
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Location: Ontario, Canada
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There is a lot of chiselling going on that weighs down the economy and costs average people a lot of money. These are based on 'lack of knowledge', ie, buying a car or a home is a dark and mysterious process and you need to pay a percentage of the purchase to an agent to guide you - however the information age is shedding light on these transactions. Other areas of the economy are already much more open - you can buy part ownership of, say, General Motors, through the stock market with very low transaction costs and the price is known to everyone.
It should be government policy to remove any legislative barriers to open and direct sales, regardless of what the product or service is. Some additional pressure to break up the existing cartels in markets such as automotive or real estate might be helpful also. They aren't actually criminal but they siphon off a lot of money while producing nothing of value. A more efficient economy is a benefit to all (well, the realtors and dealers might need to find real jobs, boo hoo).
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post #5 of 5 Old 02-01-2019, 06:44 PM
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Join Date: Aug 2017
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I always try to not buy new, CPO is always my go-to or demo leftover because of this great example. Also, do some price comparison on other dealer sites autotrader, car gurus, or autolist.

I bought new and lost a good amount of money and never will do it again.
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