What is Wholesale Cost for Dealers of Collector Cars?

[B Jake Moran]

I received my June 2024 Hemmings Motor News.  We can critique HMN as we have some other time. I was just turning pages from front to back and of course the "dealer" section is near the front of the ads.  I suspect dealers and parts sellers support HMN more then individuals.  

Of course the pricing for most of us is stupid high.  Most of us laugh and comment on dealer pricing seeming ridiculously high.  There are hundreds or thousands of examples.  But, we also assume dealers are profitable and remain in business asking these prices.  

So, my curiosity is what is wholesale?  

Without picking on any one dealer, I will point out a few examples from I believe an Illinois dealer that starts with a "V".  Of course, most of the cars are muscle cars and specialty cars. 

1966 Mustang with a 289 and notchback (not even the fastback)   $84,000
1973 Camaro 350   $82,000
1968 Plymouth Roadrunner 383 4 speed   $84,000
1955 Buick Century convertible  $99,000
1981 DeLorean  $98,000
1965 Chev Nova Restomod  $67,000
1969 Chevy C10 Truck   $49,000
1973 Dodge Challenger 340 4 speed $66,000

And on and on.  The rest of the dealers are about the same or worse, with some writing $CALL, no price.  

I am not sure where dealers get their inventory.  I assume most buyers are salt and pepper haired guys with dad bods who are recently retired and just want a fun car or two.   But what is wholesale price on these cars and is that what we consider fair retail handshake to handshake transaction price? 

[EmTee]

3 minutes ago, B Jake Moran said:

 But what is wholesale price on these cars...

Well, when I bought my first and only new vehicle (1983 Mazda B2000) from my childhood best friend who was the GM at the Mazda dealership I paid the 'dealer invoice' price.  He showed me the invoice as proof.  That said, I didn't get that truck at 'cost' - they still made a profit on the sale; but it was a still a good deal and I was happy.  As I learned, there are other considerations such as 'holdbacks' and factory-to-dealer promotions that together with the individual store overhead determine the actual cost for any vehicle on the floor.  As you can imagine, that number is fluid, and varies for each vehicle in inventory.  Things like dealer-to-dealer 'swaps' or trades also come into play.

 

I have no idea what the actual dealer cost is for any new vehicle today, but there are companies who claim to offer 'invoice' or similar pricing discounts.  Rest assured, whatever deal you ultimately make, nobody is going hungry.  All I can say is do as much research as you can on the vehicle you want and shop around; understanding that 'price' isn't everything.  Especially with new cars, you will want to buy from a dealer who will treat you fairly for service, as the list of maintenance and repair tasks that an owner can reasonably expect to tackle these days is very short... 

[B Jake Moran]

Thanks EmTee, but I was thinking more as it related to the old car hobby.  It has to be as murky as new cars.  I agree.  I worked as a mechanic / technician for Mazda-Porsche-Subaru dealer for 7 years.   The dealer owner was wealthy and I heard he took $100 from every sale of any car in addition to salary.  He drove a Porsche usually, as well.  But I doubt Subaru sells the dealership a new Outback for 50% of retail.   

[EmTee]

Oooooooooo, I didn't know there even was such a thing for a collector car.  Seems to me it's whatever a buyer is willing to pay.  At least new cars can be compared in an 'apples-to-apples' way -- used cars (including collector cars) are not so simple.  Many things can happen to a car over 50 ~ 80 years...

[CarNucopia]

Most of the cars at the "V" dealer are on consignment.  Same goes for places like Gateway. 

[ABear]

42 minutes ago, B Jake Moran said:

I received my June 2024 Hemmings Motor News.  We can critique HMN as we have some other time. I was just turning pages from front to back and of course the "dealer" section is near the front of the ads.  I suspect dealers and parts sellers support HMN more then individuals.  

Of course the pricing for most of us is stupid high.  Most of us laugh and comment on dealer pricing seeming ridiculously high.  There are hundreds or thousands of examples.  But, we also assume dealers are profitable and remain in business asking these prices.  

So, my curiosity is what is wholesale?  

Without picking on any one dealer, I will point out a few examples from I believe an Illinois dealer that starts with a "V".  Of course, most of the cars are muscle cars and specialty cars. 

1966 Mustang with a 289 and notchback (not even the fastback)   $84,000
1973 Camaro 350   $82,000
1968 Plymouth Roadrunner 383 4 speed   $84,000
1955 Buick Century convertible  $99,000
1981 DeLorean  $98,000
1965 Chev Nova Restomod  $67,000
1969 Chevy C10 Truck   $49,000
1973 Dodge Challenger 340 4 speed $66,000

And on and on.  The rest of the dealers are about the same or worse, with some writing $CALL, no price.  

I am not sure where dealers get their inventory.  I assume most buyers are salt and pepper haired guys with dad bods who are recently retired and just want a fun car or two.   But what is wholesale price on these cars and is that what we consider fair retail handshake to handshake transaction price? 

It is very simple if you think about this for a minute.

 

"Wholesale" is the price the seller (or dealer) is willing to pay for the item in hopes to make some profit reselling at a higher price (IE RETAIL) to the end consumer.

 

The Dealer becomes a "middle man" in the buying process and are in business to turn a profit on each end every sale. That profit pays for the dealers acquisition of new product,  pay utilities, rent, insurance, interest and perhaps a bit leftover to pay the owners themselves. employees.

 

The difference between Wholesale and Retail is the "markup", dealer must add a markup price to the wholesale price to earn a profit..

 

In the used market, the dealer must determine what price they believe the retail market will support, then they must buy at a lower price than what they believe it will sell for.

 

The retail prices are nothing more than a reflection of what the retail buyers may be willing to pay and the dealers know that more often than not, they will end up selling it for less than retail but more than the wholesale (what they paid for it) and still have some profit.

 

See HERE for more on wholesale vs retail

 

The prices you listed are what dealers believe the market will support, does not reflect the final sales price which if the dealer sits on them long enough may become motivated enough to negotiate a bit lower.

 

Used dealers or auctions are not where you go if you want to find the best deal, those are places you go to if you must have it and you must have it in premium turnkey condition ready to drive.

 

If you want lower prices, then dealing directly with a seller and cutting out the middle man (dealer) is almost always a lower cost means of acquiring.

[alsancle]

1 hour ago, CarNucopia said:

Most of the cars at the "V" dealer are on consignment.  Same goes for places like Gateway. 

This.  Matt can comment but 90% of dealer inventory in Hemmings is consignment.   Which means the dealer has to negotiate with the consigner an agreed asking price before accepting the consignment.   At the beginning of the process the owner always thinks their car is worth more than it actually is.   This is true for everybody including me, and all of the posters on this board.  

 

On consignments most dealers are trying to make 7-10%.  Higher percentages on lower priced cars and lower percentages on higher priced cars.   Maybe a bit more for the dealers carrying a big storefront.

[George Smolinski]

2 hours ago, B Jake Moran said:

The rest of the dealers are about the same or worse, with some writing $CALL, no price.  

They want you to call so they can use their never fail salesmanship on you so you buy the car--------------------------------NOT!

 

42 minutes ago, alsancle said:

 

On consignments most dealers are trying to make 7-10%. 

On that low of profit, how could they possibly stay in business unless the profit on the cars the dealer owns and is selling is 40% or more. If 40% or more is the profit on dealer sold cars, I think it's outrageous. This my be part of the reason you never see what people in TV shows that chase after and hunt for classic cars actually pay for them. I may have to buy a new or modern used car from a dealer, but I can't see it happening with a collector car unless I have a bunch of stupid money laying around. Mayb P.T. Barnum was right.

One redeeming value of a collector car dealer is he/she may be able to find a specific car you're looking for, but be prepared to pay.

I may be all wet on my thoughts about this and if so, I think Mr. Harwood will set the record straight.

Edited May 18 by George Smolinski (see edit history)

[Billy Kingsley]

I remember thinking that Goldenrod Garage up in Maine seemed to be reasonably priced and didn't oversell the cars, at least it seemed that way from the ads. I never got to visit there before he passed away. 

[kar3516]

I think what @Matt Harwood will not say is that there is a standard dealer markup in the classic / special interest auto business.  I’m a dealer of industrial stationary gas engines and I’m entitled to make whatever I can.  The one rule that never changes is that liquidity is extremely important in assessing risk and projected markup.  A dealer might risk his own capital for a 10% markup if he can sell it with two or three phone calls and sell it in a week.  If the car is extremely rare and difficult to sell with only a handful of cautious buyers then the dealer will expect to buy it at a massive discount so he can be compensated for the excessive risk (might require significant discounting to push it out the door) and the potential that it will stay in inventory for a very long time.  Every dealer has their sweet spot; items that can be bought and sold at a reasonable profit in a moderate holding period.  That is why dealers become known for certain types of inventory as they have developed that customer base and can turn that type of inventory over quickly.  

[alsancle]

5 hours ago, George Smolinski said:

They want you to call so they can use their never fail salesmanship on you so you buy the car--------------------------------NOT!

 

On that low of profit, how could they possibly stay in business unless the profit on the cars the dealer owns and is selling is 40% or more. If 40% or more is the profit on dealer sold cars, I think it's outrageous. This my be part of the reason you never see what people in TV shows that chase after and hunt for classic cars actually pay for them. I may have to buy a new or modern used car from a dealer, but I can't see it happening with a collector car unless I have a bunch of stupid money laying around. Mayb P.T. Barnum was right.

One redeeming value of a collector car dealer is he/she may be able to find a specific car you're looking for, but be prepared to pay.

I may be all wet on my thoughts about this and if so, I think Mr. Harwood will set the record straight.

 

The only way a dealer is making 40% on a car is if he owns it.   And I'm sure Matt will attest to the fact that buying, sorting, detailing and then actually selling is a lot of work.   If it is only consignment the number is substantially less and 10% is max and that is for cheaper cars.   Maybe on really cheap stuff it is more than 10%.

 

And as I said before,  90% of the stock you see on dealer websites is consignment.

Edited May 18 by alsancle (see edit history)

[3macboys]

Even if the dealer owns the car outright start adding in their cost to sell - the capital cost of their building, property tax, insurance, ongoing maintenance including landscaping, snow removal, (when it's time for a flat roof replacement I can guarantee that you can't get one done for less than $10 a foot) employee costs, phone lines, hydro, heating/cooling, prepping the car for sale and oh yah that cost of the ad that you read, and how many other places is the car listed?  Now start adding in the credit card company fees because that $1000 to hold the car is going to cost the dealer 4%.  Not to mention any license fees that have to paid to the state to operate.   I'm certain that Matt could add considerably to the list but you get the idea.  So you tell me what the dealer should be paying for their inventory?  If they can net 10% out of a 50k car I say more power to them and it's not an easy way to make a living.  And I didn't even mention the compensation they need to build in for dealing with retail customers.    I remember the old rule of thumb for antique dealers was they could only pay up to half of the retail price, so if you outbid a dealer at an auction you were doing alright. 

[prewarnut]

I agree with 50% on antiques and I've been on both sides of that number....

[Matt Harwood]

There are no secrets in this business. There's no dark web where dealers are buying cars for $0.40 on the dollar and then marking them up 200%. We buy the same cars you do and get them at the same prices you do. We may be better at negotiating than the average guy but that doesn't necessarily mean we're getting the cars any cheaper. The cost is the cost. The mark-up is an attempt to make some money. If we didn't have to haggle, prices would be much more realistic. In truth, the hagglers are the greedy fools. I have a car advertised at $29,900 and a guy just today offered me $17,000 for it because "I'd have to ship it and pay taxes." No, what you're asking is for a huge discount AND for me to pay your shipping and taxes. If I didn't have to deal with that nonsense, I could price the car at a level that seems more palatable. A 40% discount just isn't a reasonable ask. Go to the Toyota store and ask for 40% off and see how quickly they laugh you out the door. No matter what price I put on a car, there will be guys offering me 20% less.

 

Last year, our average margin on 223 cars sold was 9.42% (yes, we track it). Some cars sold for close to 0 and some were home-runs. But it averages out to a little under 10% in the long run. For the 10 years Harwood Motors has been in business, the average is 10.05%. We're certainly not getting rich doing this.

 

How do I price the cars? Well, if I'm lucky, I get to do an appraisal and the seller listens to me. About 40% of our cars are priced the way I want them to be and those are typically the ones that sell in a reasonable amount of time. I bet my idea of a market-correct price and Jake's are two very different numbers. I wonder why that is?

 

The rest, well, they're usually consignments with owners with dreams. Why do I even take them on? Well, for one, I need inventory and new inventory sells cars and brings eyes to the website. Two, I have to keep my employees working, and if we run out of cars to detail, service, photograph, and market, then a half-dozen people are out of work. I don't want that, either. So I take on cars that are a little on the high side but which I think I can make a run with them. I turn away cars where the guys are just completely unrealistic in their expectations, and that happens about 15-20% of the time.

 

Say a seller wants $40,000 for his car. I'll mark it up to $44,900 or $46,900 and hope for a buyer to offer me $43 or $44,000. I can make that work. If the car sits for a long time, then I'll take something closer to $40 or even be willing to take a $0 commission on the car at $40,000 in hopes that I can renegotiate a deal with the seller once I have cash-in-hand from a buyer. The key is that I'm willing to take the $0 to keep my client happy, but usually they're flexible enough that once there's money on the table, they want it. 

 

I also have several repeat sellers, and more than a few who supply multiple cars. One client is responsible for more than 40 of the cars in my SOLD inventory. Those guys get a long leash. If they want to go fishing once in a while, I'm usually willing to let them. Eventually they come around or if we get an offer in the right neighborhood, we all negotiate. As my father the attorney always said, "No deal is done until everyone is equally unhappy." 

 

I think it's a mistake to believe that dealers are greedy fools and that you can do the job better because you are on eBay all day and read Hemmings. Whatever job you do professionally, I'm quite sure I can't read a magazine and master it, so don't look at buying and selling cars--something you only do for sport--as something at which an amateur can truly be an expert. I can whack a golf ball pretty well, but I don't pretend that I can play heads-up with Tiger Woods, you dig? There are more factors in play than most guys understand and it is most certainly not stupidity nor greed that makes dealers price the cars the way they do. 

 

I'll also say that many dealerships are bankrolled by already wealthy guys. There are more than a few that are one rich guy's personal playpen, including several big players. There are others where they're financed as a hobby by the owner's other businesses. And still others that simply have rich investors bankrolling the cars. There's one very large dealer who gets fantastic cars who apparently inherited $30 million from his aunt and opened his dealership using that money. I'm sure he makes a profit, but he's not relying on it to feed his family. Harwood Motors doesn't have a rich benefactor behind us, we built it ourselves, but that's likely how many dealers are able to consistently get great cars and advertise them at astronomical prices--they may not have to care about the margins or even making monthly sales.

 

Or perhaps the whole world actually works differently than I think it does. I often suspect that everyone is corrupt and cheating and getting rich and I'm just too stupid to figure out how to do it.

 

 

Edited May 19 by Matt Harwood (see edit history)

[prewarnut]

I have friends and family in the jewelry business. My friend quoted me two different prices depending on whether we financed or not. I asked her the back story and to get let's say zero (or minimal down) and some good rate the business has to pay the bank doing the financing. So if paying in full a better discount can be had - that's worth remembering. Of course I've never seen this at an auto dealer.

[Gunsmoke]

Personally, I think the terms wholesale, retail and markup/margin and similar terms only conventionally apply in a traditional supply/demand marketplace (buying a new car, sofa, fridge), where there is a relatively consistent supply of a new item and also a consistent demand. Usually there are also several sellers to maintain competitiveness, and a range of buyers(some with lots of money, some with very little)(some with good taste, some with no taste)(some men, some women)(some impulsive, some careful). This marketplace model does not apply to buying and selling old cars, so the highlighted terms don't apply.

 

Sellers of old cars (knowledgeable owners and dealers) do their homework to estimate the value range for their old car (rating say from 1 (project car)-5 ( show car), and determine the high/low selling prices for their car. Secondly, they check out the demand, and where it exists (local or national). Using this info, they can arrive at an expected final sale price range for the car/condition they have. 

 

Smart buyers run the same exercise, first selecting the car model they are interested in, establishing the condition they want (from 1-5), and researching what they could expect to pay in the local or national marketplace. In an ideal world, both the seller and buyer will be close in their idea of what a specific car is worth. 

 

So if a 1931 Ford Model A Tudor ranges in the local market place from $3000 for a project car to $35,000 for a show model, with somewhat even steps in between, then both the buyer and seller know what a deal should look like for a condition 3 car (perhaps $16K).

 

Now the subjective stuff. If either buyer or seller does not do their homework, there is going to be a winner and a loser. As well, if their is a motivated buyer (I had one when I was 16!) or seller (part of estate, has to go now!), a good deal can be had by one or the other. Selling/Buying price has nothing to do with what one paid initially, or has invested in time and material to restore/rebuild car etc. Value is only what buyer and seller can agree on.

 

There are some exceptions to this method such as rare highly sought after cars, where their rarity, provenance, exceptional quality or other factors make value determined often by who has the deepest pockets.

 

As for how "dealers" establish their buy/sell margins, I doubt anyone of them will tell you their true MO. (except Matt H above) 

Edited May 19 by Gunsmoke (see edit history)

[Ed Luddy]

After many years in the business the difference between what "Wholesale" vs "Retail" is so slim or non existent on old so called classic cars has become negligible. Except on the rare occasion that the seller hasn't wasted half his/her life shopping, dealing, fixing, storing and paying interest on their money instead of earning and decide to just get rid of the car for a fair price, you still have to be able to drop everything at a minutes notice and try to beat out the internet flipper/scammers to get it.

 

[George Smolinski]

2 hours ago, alsancle said:

The only way a dealer is making 40% on a car is if he owns it. 

I believe I stated that in my comments.

[George Smolinski]

After reading more of the replies, I wonder if we should not be looking at wholesale/retail in the old car market, but looking instead at how, sadly, it went from a hobby to an investment & business. Start by thanking the auction houses and the guys on TV chasing old cars.

[Bhigdog]

The formula is very easy.....buy high and sell low. .....Oh! Wait a minute..... Er....ahh....Never mind.....bob

 

[3macboys]

2 minutes ago, Bhigdog said:

The formula is very easy.....buy high and sell low. .....Oh! Wait a minute..... Er....ahh....Never mind.....bob

 

Every time I see a new car dealer try to sell an old car - not a used car but an old car - they always seem to end up upside down on the deal.   If it was easy, everyone would be doing it!

[B Jake Moran]

Matt I don’t care about whether I am perceived as cheap or whatever.  I am seriously curious about the businesses that occupy Hemmings and how they derive their pricing.  
 

It seems there are a lot of consignments.  I did not know that.  

[Dave Wells]

I had an uncle who was a used car dealer for over 40 years. He started out just after the war, hauling home a non-running old sedan with his father's pickup and got it running well enough to flip it to buy another couple of older cars. To maintain his momentum, he rented a house on a main street with a big yard and garage, sub-let the house and found a retired mechanic to help with refurbishing his cars. He was able to purchase the house and lot and lined up his used cars for sale on the front lawn. He soon found another similarly located property, sold the first property including the used car business and continued on as before. He repeated selling used cars and lots that he had established and purchased larger tracts, starting other car related businesses (body shops, rebuilders, and even wrecking yards) and made a very good living for himself and his family.

He often said that there was never enough reliability or money to be really comfortable staying exclusively in the car business. Developing businesses and properties allowed him to retire a millionaire a couple of times over.

 

Hats off to those dedicated hard workers who can make a successful living from old cars.

 

(not one of his, but similar)

[arcticbuicks]

I started buying and selling used and high number of vintage cars at 17 years old ....and did so until about 10 years ago,maybe around 2000 vehicles to date  ,local,across Canada and many California cars.....in the 80s and 90s I bought some California cars [approx 150] for $2000. US average like 60s mustangs and sold them in Canada for $10 k-$15k range.......i would buy many local or not too distant restorible cars for $500-$1000.......and sell for $2500-$5000........I would say i averaged $2500 profit on a lot of local cars that only cost up to $1000..........I did very well on California cars years ago many times clearing over $6000. and a hand full of times clearing over $10k......and that was mostly on a car costing around $5000.....I did quite a few high dollar cars and the selling results were all over the board and i cant think of an average on those......the very best profit sale i did was a $3100.CDN buy and sold for $60 ,000 USD which is $81,675. CDN........so I made around $78,000. on a vintage i paid $3100. for....... ..the last 10 years has really dropped to not being worth it on vintage,great buys.....but tough selling here..........i also did a lot of cross border Canada USA vehicles ...both directions during high or low exchange rate times ......that did not usually last too long each time....but was amazing profits......for example buy a vehicle for $40k......and sell it in either country with high dollar exchange for LESS than i bought it for say $38k.......but make $12k just on the dollar exchange......thus making $10 k profit only on the exchange rate of the dollar..........I did several hundred near new diesel trucks in one year cross border and cleared average of $12k each on $50k cost each

Edited May 19 by arcticbuicks (see edit history)

[1912Staver]

Arcticbuicks, you must have been the CRA / Minister of Finances best friend. Good thing you managed to do that $3,100.00 - $81,675.00  flip years ago and not currently with the new Capital Gains tax rate.

  A good friend did much the same as you back in the 1980's / early 90's but on a much smaller scale. Lucky for him he had quite a bit of staff costs and business overheads to offset the profit on the deals. What would have been a significant tax liability for his company  just turned into a modest living for both my friend and those of us who worked for him.  The big, long term money maker was that he over time paid for the building we worked out of with part of the income stream from the cars rather than just paying rent like many car businesses end up doing. When he decided to retire a few years ago the property was sold at a tidy profit and even though there was a significant Capital Gain payable  there was still enough left to easily justify all the hard work in the car business over the decades.

 

 

 

Edited May 19 by 1912Staver (see edit history)

[arcticbuicks]

the 1980s and 1990s were great years buying and selling classics ......last 10 or more years have been steady decline to hardly worth it .....

[1912Staver]

I agree, my friend transitioned into about 90 % restoration work / parts supply and only a small amount of energy on buying and selling hobby cars, mid 1990's onward..

 Once again the restoration side of things more or less just paid wages and covered costs. But he slowly invested in property out here on the coast . He followed in his fathers footsteps in that regard and is now quite well off between family money and his own property investments.

 He also has some extremely nice cars he acquired over the years. 

  His father was never very happy about my friends automotive interests. He would have preferred my friend just stuck to property like he was doing and not been involved with the cars. But my friend insisted on doing it his own way, and in the end it all worked out quite nicely.

 I expect my friend would have made a lot more money if he had followed his fathers wishes and been a full time property guy rather than the cars , but think of all the interesting times we have all had with old cars. Property ownership and development is so sterile in comparison.

 

 

 

 

 

 

Edited May 19 by 1912Staver (see edit history)

[CarNucopia]

13 hours ago, B Jake Moran said:

 I am seriously curious about the businesses that occupy Hemmings and how they derive their pricing.  
 

It seems there are a lot of consignments.  I did not know that.  

Another aspect of the "V" dealer model is they run their business as a museum. The cars for sale make up a large portion of the vehicle exhibits. I drive by their location quite often and can see they are expanding into exhibits unrelated to cars. They now have a Titanic exhibit and a dinosaur interactive display. I interpret that to mean old car sales are a shirking part of their revenue.  

[kfle]

Most dealers are selling to a completely different audience than the AACA crowd, etc.  For example, there is a place in my town in Florida that is well known and has a building full of cars that when I see them I think they are overpriced.  The reality is though that the place gets a steady crowd of tourists just going to look at the old cars.  Guess what happens though?   You have someone walking through that falls in love with one of the cars and has a good amount of disposable income so they end up making an impulse buy.  Come to think of it, that is what got me into the old car game.  Back in 2015 I visited a dealer in Michigan on whim with my wife to look at old cars when I had time to kill.  I ended up falling in love with a Model A Roadster and bought it on the spot.  Then after I got it home, I started researching and joined the Model A club, and I was bitten by the old car hobby.  Now I have connections and know the places to look for old cars and know what to look for when buying.  These dealers are very good at moving the cars that they have on consignment and it is a completely different world then the classifieds, etc.  

Edited May 20 by kfle (see edit history)

[arcticbuicks]

well said...many people with no vintage car experience end up buying cars from these showroom dealers just on a whim spur of the moment

[69merc]

Anecdotal but interesting.  A buddy of mine owned a pristine 65 Buick Wildcat convertible, totally original and low mileage.  He stored the car in a remote garage as he didn't trust keeping it in his own apartment building one.  He did some work, like replacing the top (the biggest job) and regular routine maintenance.  He kept that car for 20 years. A few years ago, he ran into some temporary financial troubles and decided to sell the Buick.  He had no idea how to use the internet and is something of a Luddite. He knew the owner of the Buick, which is how he acquired the car. So he took it to a local dealer that also handled classic cars.  They gave him about $22k for the car in cash (which was a lot more than he paid for it way back when).  Within a month they sold it for near $40k.  This was before I met him, so I couldn't warn him,  instead I told him, for all of the grief that he was spared by selling to a dealer, he didn't do that bad.  He has had sellers remorse ever since, and wishes he never sold the car, but ah well. This might be a case where dealers can profit a lot by unwary, unknowledgeable sellers. But in defense of dealers; they do handle all of the important paperwork, tax, title registration, etc.  Selling privately can be a lot of work or worse sometimes. That convenience is surely worth something.

[Matt Harwood]

We do get a lot of first-timers, and I'm proud of that. I think dealers are more approachable than some guy in his driveway and we certainly have more to lose if things aren't as we say they are. That brings a certain level of confidence to people on the outside looking in. I stand behind the cars I sell in most cases (this isn't the same as a warranty--you still have to do your due diligence to protect yourself) and I spend a lot of time checking them out and fixing them so that they're safe and ready to drive when they get to your driveway. Again, not the same as a warranty, but we try to make it a positive experience. For many first-timers, we also buy them a membership in an appropriate club for the car they just bought so they can get started in the hobby.

 

Everyone thinks that owner/sellers are these honest, salt-of-the-earth guys who will always give you a great deal and tell you everything they know about the car and be totally straight with you, while dealers are just flipping cars and know nothing about them and are only in it to make a quick buck at the buyer's expense. I'm here to tell you that I know more than most sellers about their cars. I'd say 80% of them have never been under their cars beyond getting on their hands and knees and taking a peek without a flashlight. I've had sellers insist that their cars have air conditioning when they do not. I've had guys claim their cars are matching numbers and ask for a matching numbers price when they are not. Most sellers don't know as much about the cars as you would hope or expect, and they usually don't know as much as I do. One guy was even double-clutching his Ford Mustang because "all old cars need to be double-clutched." Pfffft. And a guy in his driveway is far more likely to believe his car is worth a ton of money because he "seen one on Meechum that sold for ten times this much!" Dealers at least pay attention to the rest of the market and know that one car doesn't set the bar.

 

And what does the guy in the driveway have to lose if you don't like the car? What's the downside to lying to you? He can simply ignore you for the rest of his life. I, on the other hand, have a reputation and a financial incentive to take care of you.

What I don't get is that everyone treats me like a crook instead of taking advantage of my 45+ years in the hobby and my experience with THOUSANDS of cars and my desire to have a quality reputation. I know more than most guys in this hobby about a whole lot of stuff. I have had my butt in more cars than most people. I have taken apart and serviced and rebuilt more cars than a lot of guys who claim to be hands-on hobbyists. But no, they don't trust me one bit so they send a 20-year-old kid to look at a Model A and treat that kid's appraisal as if it's gospel. In truth, that kid didn't even know how to start it, never mind how to evaluate how it operated. Nevertheless, the dealer is the crook and the enemy and the bad guy and anyone who isn't a dealer is probably decent, honest, and 100% knowledgeable about their cars. Yeah, right.

[Steve_Mack_CT]

I think dealers add a lot of value although like any profession you have different experiences with different dealers.

 

For consigners a dealer provides exposure, invests with marketing, perhaps some time and effort spent on the car itself, a lot of time on inquiries both serious and not as well as assist a newbie with logistics.  A lot of these things an individual seller either cannot do or doesn't want to deal with.

 

For buyers, a dealer may have some choices under one roof and again help with logistics.  If a buyer can get beyond the trust issue Matt outlines, they could possibly learn a lot about their potential purchase.

 

I think (hope) the good guys outnumber the bad ones.  The clowns usually get smoked out though...

[ABear]

57 minutes ago, Matt Harwood said:

I think dealers are more approachable than some guy in his driveway and we certainly have more to lose if things aren't as we say they are.

The problem is very few "dealers" in used vehicles in general are truly "honest" whether it is used modern vehicles or used vintage vehicles which gives a specialists in vintage vehicles a black eye.

 

Errors in omission of vital information through ignorance is typical of most transactions. Case in point, many yrs ago a sibling asked me to look at a vehicle, a good once over through the engine bay didn't show any issues, engine sounded goo, ran good, drove nice.. Sibling bought it.. after a few months started having issues with coolant loss.. Yeah, the dealer failed to disclose that the engine had a cracked head, the dealer patched said head with gobs of silicone RTV under the valve covers to keep the coolant out of the oil.. Wouldn't have recommended buying it if I could have seen what was hidden..

1 hour ago, Matt Harwood said:

What I don't get is that everyone treats me like a crook instead of taking advantage of my 45+ years in the hobby and my experience with THOUSANDS of cars and my desire to have a quality reputation.

Glad you have a good reputation, the problem is others have damaged the credibility of all dealers, easy to damage, not so easy to overcome and fix.

 

You can only do so much to repair that damage.

[60FlatTop]

15 hours ago, kfle said:

Most dealers are selling to a completely different audience than the AACA crowd, etc. 

Good statement. There is a semi-famous quote about Jack Nicklaus that comes to mind.

 

Jones himself said after watching Nicklaus win the Masters in 1965: "Nicklaus played a game of which I am not familiar." And Palmer certainly was right, as Nicklaus' career took off after his first win on the pro tour.

 

I enjoy that quote because it resonates with so many things in the dogma of the hobby.

[Grimy]

1 minute ago, 60FlatTop said:

Good statement. There is a semi-famous quote about Jack Nicklaus that comes to mind.

 

Jones himself said after watching Nicklaus win the Masters in 1965: "Nicklaus played a game of which I am not familiar." And Palmer certainly was right, as Nicklaus' career took off after his first win on the pro tour.

 

I enjoy that quote because it resonates with so many things in the dogma of the hobby.

There you go again, Bernie, speaking in parables.....

[Matt Harwood]

Just now, ABear said:

The problem is very few "dealers" in used vehicles in general are truly "honest" whether it is used modern vehicles or used vintage vehicles which gives a specialists in vintage vehicles a black eye.

 

Errors in omission of vital information through ignorance is typical of most transactions. Case in point, many yrs ago a sibling asked me to look at a vehicle, a good once over through the engine bay didn't show any issues, engine sounded goo, ran good, drove nice.. Sibling bought it.. after a few months started having issues with coolant loss.. Yeah, the dealer failed to disclose that the engine had a cracked head, the dealer patched said head with gobs of silicone RTV under the valve covers to keep the coolant out of the oil.. Wouldn't have recommended buying it if I could have seen what was hidden..

Glad you have a good reputation, the problem is others have damaged the credibility of all dealers, easy to damage, not so easy to overcome and fix.

 

You can only do so much to repair that damage.

 

How do you know "very few" dealers are honest? How many have you done business with? It sounds like you have a case of one (maybe) bad apple spoiling the whole bunch and you've decided that they all must be like that.

 

How do you know the dealer was responsible for the leak and the substandard patch job? It took months for the problem to show itself and you said it was not visible upon inspection. It's much more likely that an unscrupulous (or, more likely, ignorant and unskilled) owner did the repair and it held long enough to get past both you and the dealer. Do you know for a fact the dealer patched it or are you just assuming because you're working from the base assumption that dealers are crooks?

 

The thing is, people seem to think that dealers are disassembling the cars and looking for problems and fixing everything. If the car operates correctly and drives like it should and doesn't have outward signs of distress, what the heck are we supposed to do? I could hire one full-time guy to do nothing but compression tests, 96% of which would come back normal. That's not an efficient use of anyone's time or money, is it? Would you pay extra because of it? Hell no.

 

People both believe us to be idiots and crooks, but also omniscient and doing full tear-down inspections of every car we sell. It's neither. Just as we buy the same cars you can buy for the same prices you would pay, we also have the same eyes and the same abilities and the same assumptions you do. If a car is running and driving properly, how the heck are we supposed to know the water pump will give up the ghost in 600 miles?

 

I see what your fellow hobbyists do to their cars. The hacks outnumber the skilled workers by about 4000 to 1. I undo a lot of crappy work to make the cars more marketable. A dealer with a reputation and tantalizing pockets to reach into (either with threats of internet farkery or via lawyers) is FAR less likely to try to pull off that kind of nonsense. What's the upside for him? A quick sale? Hell, I'd rather not sell a car than deal with the hassles of a disgruntled buyer with a broken car that I should have known about. There are times when there are things that I couldn't have known about, and that's a different discussion, but there's NO WAY I'd willingly take on a sick car knowing I could half-ass a repair and dump it on some poor schlub for a few hundred bucks' profit. That's nuts!

 

I'm not necessarily defending all dealers here, but I have to believe other dealers have done the same math I have and come to the same conclusions--the hassles of being crooked aren't worth the meager profits. Do it long enough and eventually that leaning tower of fail comes crashing down. It's hard enough to keep this thing upright by being honest and trying to get quality cars; I can't imagine how miserable my life would be if I was knowingly selling broken cars in a dishonest way.

 

As you say, an incident like this does a lot of damage to a dealer (but, interestingly, it does none to a private seller). What dealer could survive for long if this was SOP? A whole lot of this resentment towards dealers comes from people making assumptions about the cars and being dissatisfied because they didn't do their own due diligence and protect themselves. As much as I try to help buyers, it's still not my job to keep a grown man from making mistakes. It's not my responsibility to fix the car if you buy an MG TD that I told you could could "drive every day" and you actually use it as a daily driver and blow up the engine because you're trying to keep up with 80 MPH highway traffic in New England in December.

 

Again, a private owner with low levels of knowledge, a lack of skills, a complete unwillingness to spend money, and with absolutely nothing to lose and everything to gain is far, far more likely to be the "crook" in your scenario.

 

In most scenarios, actually.

[ABear]

14 minutes ago, Matt Harwood said:

How do you know "very few" dealers are honest? How many have you done business with? It sounds like you have a case of one (maybe) bad apple spoiling the whole bunch and you've decided that they all must be like that.

I HAVE bought quite a few new and used vehicles over the yrs, doesn't take long to figure out that more than once one has duped you.

 

I have had better luck with buying used vehicles person to person where I was able to do a better job of inspecting the claims of how "cherry" it was.. But whether going person to person or through a dealer, I now go into the deal with considerably lower expectations after getting burnt multiple times.

 

As far as that one example, YES, the dealer did know that there was something wrong with the vehicle, sibling couldn't buy it that day, put money down and came back the next day with the dealer stating that they "sent" it to their "other shop" to "detail" it for sale. Said something like the vehicle was so new to them that it didn't get detailed before putting it on the lot.. Took them a week to "detail" it.. It DIDN'T look any cleaner on the inside or outside of the vehicle when my sibling picked it up.. The dealer also INSISTED on selling an additional "warranty" which just happened to cover the ENGINE.. When coolant started showing up in the oil, the WARRANTY company refused to honor the warranty, dealer NEVER sent in the paperwork or payment to the warranty company..

 

Does that make "all" dealers bad?

 

No.

 

But that experience has soured more than ONE person. In fact, I will never go look at a vehicle for anyone else, EVER as that negative experience could have ruined my relationship with my sibling, don't wish to take that chance with friends or family ever again.

 

But, the reality is there ARE OTHER bad apples, finding truthful dealers who are willing to stand by their products is a lot like walking through a desert littered with unmarked mine fields, just never know if you are stepping on a hidden mine..

 

Are ALL individual sellers honest?

 

No.

 

BUT, I have a few friends who have done a lot of car flipping (buy and drive until they get bored with it), some are more truthful than others, have seen a few times with one that did fantastic "body work" with a fist full of newspapers and a gallon can of "tiger hair", stuff the newspapers in the rust hole, cover with tigerhair and sand.. Splash some paint on and viola, a "mint" 1960s car has been born from a pile of rust..

 

Trust is something that is earned, not easy to come by, but easily destroyed and as they say, all it takes is one bad apple..

[60FlatTop]

1 hour ago, Grimy said:

There you go again, Bernie, speaking in parables.....

I was thinking about putting all my parables into a bibliography but I need a shorter term for it.

[arcticbuicks]

3 hours ago, ABear said:

The problem is very few "dealers" in used vehicles in general are truly "honest" whether it is used modern vehicles or used vintage vehicles which gives a specialists in vintage vehicles a black eye.

 

Errors in omission of vital information through ignorance is typical of most transactions. Case in point, many yrs ago a sibling asked me to look at a vehicle, a good once over through the engine bay didn't show any issues, engine sounded goo, ran good, drove nice.. Sibling bought it.. after a few months started having issues with coolant loss.. Yeah, the dealer failed to disclose that the engine had a cracked head, the dealer patched said head with gobs of silicone RTV under the valve covers to keep the coolant out of the oil.. Wouldn't have recommended buying it if I could have seen what was hidden..

Glad you have a good reputation, the problem is others have damaged the credibility of all dealers, easy to damage, not so easy to overcome and fix.

 

You can only do so much to repair that damage.

Thats quite a statement to say very few dealers in used vehicles are truly honest......there are a lot of laws protected customers and keeping dealers honest VS buying from private people......and much easier to go after a dealer on a purchase