Vehicle Buy Back Events - What Gives?

[Smokey Bear]

Has anyone received "Buy Back Event" notices from dealers here and actually followed through to check them out?

I rcvd two for my Ram and now I have one for my 07 Honda. It states that there is "high demand for these vehicles" and that they will "give me 110% of Kelly Blue book value in exchange on an 09 or 10 model" and that they "are confident that this exchange can be made for little or no out-of-pocket expense....".

I'm tempted to follow through and see how much bullshit they throw at me, but first I want to see if the entertainment value will be worth my time.

Anyone followed through on one of these?

[jeryst]

Just the latest trick the sales managers are using to get you in the door.

[kidsixpack]

Trading that Honda for a Ram sounds like a good idea.
KID

[Arthu®]

They just want you to take a new car of their hands and give them your now more valuable second hand car in return. The vehicle buy back events have always been great to stimulate their sales, in the end having a new car sit and not sell over a model year is more expensive than to have second hand car sitting. But with the cash for clunkers deal now having ended it is a real money maker. I keep an eye on the auto industry and in the U.S. just before year end the average price of a car went up. It's quite simple the incentives are down and the inventory are down due to the cash for clunkers deal and the downsizing of production. Had the car industry in the US in the beginning of 2009 still more than 3 million new cars sitting at the end it's under 2million, so they can charge more for a new car, especially if you are looking for a 2009 model this will decrease your choice tremendously. Now the cash for clunkers deal also had the effect that cars that would normally return to the second hand market were now taken off the street which decreased the supply. I'm sure I don't need to explain the concept of supply and demand and price. So for them it's a lucrative deal, they sell you a car that they can charge more for and they get one back that will probably hold it's value much better and longer.

Arthur

[Smokey Bear]

It's the idea that I could trade in a 3 year old car with 50k on it for a 1 year old new car in light of the statement that they "are confident that this exchange can be made for little or no out-of-pocket expense...." that draws my curiosity. It's hard to ignore, even though I also think it just a gimmick to get you on the lot.

I guess I just need to come to grasp that dealers basically have no shame. 

[68charger383]

It's probably 110% of blue book trade in value (not private party and not retail) and then they'll charge you 90% of the MSRP for the new car.

Remember, most states require a dealer to provide a warranty for a used car they sell. If they buy a car which is 3 years old, then they will most likely still be under the original warranty. So only a minimal service will need to be done before it's on the lot. Plus there are a lot more people with $10K to spend on a used car than $20K for a new one.

So bottomline: they sell you a new car for $500-$1,000 profit. Take in a nice used car with a warranty to sell for a $1,000-$5,000 profit. It's win/win for them.

[skip68]

A big thing to know is this...   When a dealer is giving you say $10k for your trade in, it's not "cash money"..  It's paper.   Most dealers have wholesale guys that buy most of the trade in cars from them so they will get money out of your car there.  Then  they talk you into buying the warranty for $2,500 that really only cost them about $600.  They move things around so much and tack on the negative balance from the trade to the new car is what the tell you but you really don't know what your paying for the new car.  All you know is what they tell you.   Just like when they tell you about the ext. warranty and how banks like to see that when you buy the new car.      Banks don't care nor do they turn you down for not buying the extra warranty.  This is one that I love....  When you see a nice used car on the lot they always tell you it's a trade-in.    The truth is, some cars are.  But most used cars on a new car lot come from other dealers, the aution yard, small used call dealers or even ex rental cars.     No matter how the slice it they are making money.  bottom line is don't be fooled into thinking they just want to help you.   Just like the old  "we'll pay off your car no matter how much you owe"...      Trust me, you are still paying for it.....     I'm sure some of the guys here that work at dealers as buyers might share some of the B.S. that customers are told.   

[Rolling_Thunder]

Kinda sounds like Toyota's warranty on the Tacomas and other vehicles...   they publicly stated there is frame rust issues so if you're truck has frame rust (even surface) go to a dealership and get it checked....    if it fails their inspection then Toyota will buy back your old truck for 150% KBB private party value....     

Talk about customer service

[CYACOP]

A big thing to know is this...   When a dealer is giving you say $10k for your trade in, it's not "cash money"..  It's paper.   Most dealers have wholesale guys that buy most of the trade in cars from them so they will get money out of your car there.  Then  they talk you into buying the warranty for $2,500 that really only cost them about $600.  They move things around so much and tack on the negative balance from the trade to the new car is what the tell you but you really don't know what your paying for the new car.  All you know is what they tell you.   Just like when they tell you about the ext. warranty and how banks like to see that when you buy the new car.      Banks don't care nor do they turn you down for not buying the extra warranty.  This is one that I love....  When you see a nice used car on the lot they always tell you it's a trade-in.    The truth is, some cars are.  But most used cars on a new car lot come from other dealers, the aution yard, small used call dealers or even ex rental cars.     No matter how the slice it they are making money.  bottom line is don't be fooled into thinking they just want to help you.   Just like the old  "we'll pay off your car no matter how much you owe"...      Trust me, you are still paying for it.....     I'm sure some of the guys here that work at dealers as buyers might share some of the B.S. that customers are told.   

One good reason new car sales are down. Its such a nightmare to deal with the dealers, most just avoid doing it, well thats the way I see it.

[stripedelete]

It's definitely a Sales/Marketing program that has been around for a while.

On thing that is different right now: used cars are bringing top dollar. I've been following the auctions for the last year (trying to buy my wife a low mile Exploder) and prices are historically high.   Why? Maybe some is due to "Cash for Clunkers", but, I am told by the dealers that it's more due to the franchised dealer closures.  The majority are continuing to operate as used car stores, so they are doubling the number of cars purchased at the auction.  Demand goes up.  Price goes up.

What does that have to do with the "buyback event"?  The dealer can give ("show") more for the trade.  Combine that with factory incentives (rebates, 0%)  and if they can get a "fence sitter" in dealership.....

But nothing is free.  This is just one of those times when, if you are in the market for a new car and you have the right trade-in you might get deal.   

[mauve66]

somewhere in the small print after it says 110% trade in it will say "less depreciation, miles and wear and tear", and like they said, your not getting dealer sale price or even private party sale price for the used car, they will tell you that the KBB wholesale price is not really what the auction is bringing and even if they do give you the book WHOLSALE price they are taking it off the list price of the car and then pocketing the incentives that you would of normally got.  i worked at a nissan dealer for a couple of weeks (hoping i could transfer to the sister Dodge dealer), the ways they turn numbers to get you qualified to meet that payment you stated you wanted (the very worst thing you can do) and the dragging out of the "talking to the manager", all to wear you down, they're stuck for the day, their not going anywhere.  i had to quit and find another job, i couldn't just lie to peoples faces like that

[89MOPAR]

  Yes, it's "No money out of pocket " , on the day you trade it in.
  Unfortunately you'll be paying probably an additional $200+ a month for the next 6 years....

[Charger440RDN]

It will be a long, long time before I set foot in a dealership again to by a new car. I get tired of the lies and tricks