Edmunds Answers



  • Stever@Edmunds 01/10/10 8:53 pm PST

    Dealer Trade-In TMV is the amount you'd expect the dealer to pay you for your used '06 RX.

    After the dealer takes the car in trade, they check it out and add in a profit. Maybe they throw in an additional warranty that you wouldn't get from an individual seller. That becomes the Retail price - the price you pay.

    If you focus on your OTD (Out the Door) price, you can ignore the junk fees and just negotiate the bottom line price. That usually makes the process faster with fewer surprises when you go to pay.

  • 200_up_toooo 01/11/10 3:30 pm PST

    I am a Car Salesman at a Toyota Dealership in Maryland. I pride myself on being one of the good guys.

    1. "Which TMV price should I expect to pay? Difference between dealer retail and trade-in."

    The TMV price that applies to your situation would be 'Dealer Retail price'. This is the price that the dealer retails a used car to customers.

    2. "The difference between the Dealer Trade in price and the Dealer Retail price is 3,000! I don't understand."

    The “Dealer trade-in” price is the number that you can expect to get if trading in that vehicle. When we (dealerships) take a vehicle in as a trade we spend various amounts of money to make it retail worthy. The most common examples are as follows:

    -Mechanical inspection and State inspection
    This can cost anywhere from $75 dollars to Several Thousand. It just depends on what the car needs. Even if the Engine and Transmission are perfect, the cost could still be high. That Lexus is 3-4 years old and over 40k miles so it could need tires. A set of good tires for that Lexus cost around $1,000. No reputable dealer is going to half ass a Lexus.

    The same goes for brakes. My dealership routinely replaces brakes that are "questionable". "Questionable" means that the brakes pass State inspection without a problem but the customer might have to replace them within a year. Just imagine spending $30,000, then coming back to me 6 months later complaining that you need new brakes. I'd be a fool to think that you care one bit that the brakes passed state inspection, you want free brakes. We don't want the bad word of mouth, so we just replace them before retailing the vehicle, thus avoiding any future problem. Cost of this varies from $200-$800
    -Cosmetic inspection
    Tears in leather, scratches in paint, broken or non fuctional buttons, etc. Cost could be 0 - a few hundred normally.

    A funny example for the RX330, DON’T LOSE YOUR WOOD SHIFT KNOB! It cost $400 lol. I’m not kidding.
    -Interior and Exterior Detail ('not a car wash', a professional detailing). Cost around $100-$300

    these are just the common examples. There are dozens of different things I could mention but you get the point.
    So take the average cost of making a car ‘Retail Worthy’, and then add in some profit, that’s what we will sell the car for.

    3. “Also I have found that different dealerships here in Richmond, VA have a wide range of "Processing Fees".
    For Ex. - 1 wants to add $395 - another $299 - and Carmax wants $149 - another $0. What the heck! Is this negotiable?”

    Being in Maryland myself, I run into this all the time with VA customers who are comparing our dealership to VA dealerships. It’s only the VA dealers that charge these high fees. We aren’t really sure how they get away with it. My dealership charges a $100 Processing fee. This covers the man hours required to process the paper work with the bank/MVA/DMV and our in-house booking of a deal for our records. Since our fee is the lowest around and it’s the only ‘fee’ we charge, it is non –negotiable. With all of that said, I would venture to say that the VA dealers fee IS negotiable. If I was you I would say “All the dealers in Maryland only charge $100, I will agree to pay that for your time but nothing higher as I don’t see it as fair.” They’ll probably agree to it but I’m not positive since I’ve never had to discount our fee.

    I hope this helps. We aren’t all bad guys. Good luck.


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