March 22, 2006

Hi Tony

Thanks for the informative site. I’ve glanced through a lot of it, but not in fine detail so I may have missed this being discussed.

I have been in the hunt for a used Tahoe or Yukon for a while now. On two separate occasions, at two different used car dealers I have been given similar lines. They show me a piece of paper (or their computer) which shows their "cost" on the vehicle plus their expenditures for repair items and explain that they can only let the truck go at a certain price.

The first dealer that did this I tend to trust. I was given a great deal on a minivan that was later totaled in an accident. This dealer's computer shows the Yukon "acquired" for $6,500 with around $1,800 in repairs/upgrades. Because we are a repeat customer and because they have had the Yukon for a number of months they will let me have it at their cost - $8,300. They currently have it marked at $8,990.

The second dealer has a Tahoe in a similar price range. I told them it sounded like it might have a water pump problem which I could take care of myself and the dealer pulled out his sheet of paper with all his vehicles on it. Showed me the "cost" and explained that he could either give me a free service contract or deduct the price of the contract from the current sticker price. Otherwise, no concessions. The Tahoe has been on the lot for several months and was listed $1,000 more than it is currently listed.

So, are these dealers really showing me their cost on these slow movers or does "cost" mean something else?

Thanks for the great work.

Keith S.

Answer:

Hi Keith,

There's no way of knowing for sure if they are actually showing you their true cost on these vehicles, but my gut tells me they are both lying to you! I've never know any dealer who shows their true cost on a used vehicle to a customer. Used cars are where they make most of their money, and I find it hard to believe they are going to sell them a cost.

It does happen on occasion however. The dealers may be so desperate to move these vehicles that they are telling you the truth, but I don't think so. Also if the first dealer had to spend $1,800 on repairs to get the vehicle ready for sale I'd absolutely steer clear of that truck. My guess is that they have grossly inflated the repair number to give themselves some room, but like I said . . . no way of knowing for sure.

You'll just have to check the vehicles out carefully and try to make an educated decision - not an emotional decision. Take your time, think it through and if you're not sure keep shopping.

All my very best...

Tony Iorio