Negotiating Good Car Deals...

[Rambo]

Originally Posted by Despos

I put a deposit on a car on a Saturday and went back to negotiate on Monday. It was midyear on the car and I looked what the same year car was selling for used. I split the difference and went back on Monday offering that price. The salesman got up and said he had to talk to the manager. I told him when he came back I only wanted to hear yes or no, no BS, no counter offer. He came back and threw the keys on the table and scowled at me. I felt pretty good about it.
What used value did you use, same year or the previous year?

 

[Despos]

Originally Posted by Rambo

What used value did you use, same year or the previous year?

It was the same year car.

Last car I bought was last October and in hindsight the timing worked for me. I think the dealers were in "don't know what to do" mode due to the economy. Price I paid is what they are asking presently so it looks like I saved 1 years depreciation.

 

[Piobaire]

Just wondering. What do people here think the typical vehicle sold in the US depreciates in its first year? 5%? 10%? 30%?

 

[gomestar]

Originally Posted by Piobaire

Just wondering. What do people here think the typical vehicle sold in the US depreciates in its first year? 5%? 10%? 30%?

http://www.allbusiness.com/finance/868133-1.html#reg

 

[Thomas]

Originally Posted by Piobaire

Just wondering. What do people here think the typical vehicle sold in the US depreciates in its first year? 5%? 10%? 30%?

The accountant in me looks at that and thinks...loaded question.

The dealer will probably depreciate it 20-30% if you trade it in at one year. Then sell it at close to 95% if they can get it. The car is probably worth just north of 90% since nothing will need replacing anytime soon, outside of the consumables, but that's a moving target. The manufacturers also (used to) publish their own depreciation tables for figuring the residual values of a lease, but since they were buying the car back at the end of the lease they could fiddle with the numbers however they liked. Too bad I can't recall specifics on those little beauties.

I think 15-25% depreciation is pretty common as far insurance numbers go, depending on model.

 

[Piobaire]

Originally Posted by gomestar

http://www.allbusiness.com/finance/868133-1.html#reg

Originally Posted by Thomas

The accountant in me looks at that and thinks...loaded question.

The dealer will probably depreciate it 20-30% if you trade it in at one year. Then sell it at close to 95% if they can get it. The car is probably worth just north of 90% since nothing will need replacing anytime soon, outside of the consumables, but that's a moving target. The manufacturers also (used to) publish their own depreciation tables for figuring the residual values of a lease, but since they were buying the car back at the end of the lease they could fiddle with the numbers however they liked. Too bad I can't recall specifics on those little beauties.

I think 15-25% depreciation is pretty common as far insurance numbers go, depending on model.

Yup, those numbers were right in line with my thinking. Best in class, about 14-15%, worse, 25%+ That's not something the average consumer really wants to believe.

I can tell you, from my research due to my upcoming lease termination, the beautiful, phoney residuals are not being offered. I mean, we're talking MBs with 36 month, 15k residuals under 50%, when just two years ago, I was getting 60%.

 

[Rambo]

Originally Posted by Piobaire

Yup, those numbers were right in line with my thinking. Best in class, about 14-15%, worse, 25%+ That's not something the average consumer really wants to believe. I can tell you, from my research due to my upcoming lease termination, the beautiful, phoney residuals are not being offered. I mean, we're talking MBs with 36 month, 15k residuals under 50%, when just two years ago, I was getting 60%.
Oy. I wouldn't touch anything with a <50% residual.

 

[Piobaire]

Originally Posted by Rambo

Oy. I wouldn't touch anything with a <50% residual.

Nearly impossible to find these days, at 36 months, 15k miles. Check out www.ridewithg.com for great leasing info.

 

[Rambo]

Originally Posted by Piobaire

Nearly impossible to find these days, at 36 months, 15k miles. Check out www.ridewithg.com for great leasing info.
Really? Are we talking advertised or bargained down at the dealership. Haven't helped out on a lease in a while but residuals have never been too much of a sticking point. There isn't a wide spread but you can usually negotiate a few points.

 

[DNW]

Originally Posted by Rambo

Really? Are we talking advertised or bargained down at the dealership. Haven't helped out on a lease in a while but residuals have never been too much of a sticking point. There isn't a wide spread but you can usually negotiate a few points.
You CANNOT negotiate the residual value on a lease. You can negotiate the finance rate (i.e. the money factor), but the residual value is set in stone by the finance company. After your lease is up, however, you can in fact negotiate a buy price that's lower than the residual value. Residual values for cars are in the ******* right now because there's so much inventory floating around, and demand is not going to come back for several years to come. This combination depresses resale values of vehicles coming off lease, and nobody with enough cash (or cojones) to subsidize lease financing now like they used to.

 

[Piobaire]

Originally Posted by DarkNWorn

You CANNOT negotiate the residual value on a lease. You can negotiate the finance rate (i.e. the money factor), but the residual value is set in stone by the finance company. After your lease is up, however, you can in fact negotiate a buy price that's lower than the residual value.

Residual values for cars are in the ******* right now because there's so much inventory floating around, and demand is not going to come back for several years to come. This combination depresses resale values of vehicles coming off lease, and nobody with enough cash (or cojones) to subsidize lease financing now like they used to.

What he said. Out of three things in a lease, the residual, the cap cost, and money factor, you can only change the second two. The best lease will be when the car maker is giving a subsidized residual and money factor. Then you beat up on the dealer for the cap cost.

 

[Rambo]

Originally Posted by Piobaire

What he said. Out of three things in a lease, the residual, the cap cost, and money factor, you can only change the second two. The best lease will be when the car maker is giving a subsidized residual and money factor. Then you beat up on the dealer for the cap cost.
I was thinking money factor and confused it with residual. Been a while since I helped out on a lease. I usually tell everyone to buy used. That ridewithg site shows several benz models with 36month >50% residuals. I'm confused.

 

[Piobaire]

Originally Posted by Rambo

I was thinking money factor and confused it with residual. Been a while since I helped out on a lease. I usually tell everyone to buy used.

That ridewithg site shows several benz models with 36month >50% residuals. I'm confused.

We got a 60% on my wife's ML550, 36 month, 15k December 07.

Riding With G:

2010 Mercedes ML550 4WD
24-month | 15k miles | residual 49% | .00420 base money factor
36-month | 15k miles | residual 43% | .00385 base money factor

I was thinking of a GL550:

2010 Mercedes GL550
24-month | 15k miles | residual 51% | .00180 base money factor
36-month | 15k miles | residual 46% | .00135 base money factor

Now, the GL450 is at 53%, but I wanted that honking engine in the 550. *sigh*

 

[Christofuh]

My nay-buh has a new GL550. It's a goddamn schoolbus. The guy always takes up a spot and a 1/2 whenever he parks this thing.
Other than that, the truck itself is pretty jazzy looking.

 

[CDFS]

Originally Posted by uhurit

In the Capital of Copenhagen?

Serious question. I know it's not so in the capital of Copenhagen aka The Netherlands. Also, I watch Top Gear and know it's not so in GB. So I just wondered if you got your facts straight...