October 10, 2011 · 0 comments
Recently I have been looking for a used car for a family member. The requirements were a cheap price (around $2,500 to $3,000), mid to large size, clean and presentable exterior and interior, and a reliable vehicle. Obviously in this price range you can't expect a great car, but I hoped to find a good car that probably needed some TLC.
I looked to Camrys, Magnas and Commodores but kept an eye out for anything else that might do including Sonatas, Nubiras, Vectras, etc.
In this price range you are looking at a below average late 90's model, or an average to good car from earlier in the 90s.
After a day of looking it became apparent to me that few people take care of their cars. Given that cars are usually the second largest purchase by a household (after property) people really should realise that their car, if cared for, can achieve a substantially higher price at resale time than if not cared for.
It also became apparent that car dealers initially price cars quite high, and it doesn't take much to get a reduction of 15% to 25% if not more. The first thing to do when considering a car is to look at the sale sheet that should be attached to the visor which has a couple of important details on it: initial sale price and the date they got the car. When a dealer first gets a car for sale they often start with a high price, then they might reduce the car over time. It is not unusual to see a car initially offered at $5,000 then reduced to $4,000 and then maybe $3,500. So you can judge a reasonable offer based on the initial price listed on the sale sheet, and also keep in mind that if the car has been there for some time then the dealer is likely to be more keen to sell it.
From my experience, anything with an initial price of $4,000 was usually obtainable for $3,000. $3,500 is a reasonable offer for a $5,000 car. The important thing is to make them aware that you are serious, but also that you are prepared to walk away. My tactic was that I had a certain amount of cash from another car that I was going to buy but didn't go ahead at the last minute, and that I wanted a car now for the same price. If they laughed at my offer I told them that the car I was going to buy was advertised by a dealer at the same price as their's and the dealer reduced it to the same price I was offering so felt my offer was reasonable. Worst case the dealer often comes back with a counter offer and you find out what their bottom line is.
I eventually found an unusually tidy, low mileage VT Commodore Acclaim with an asking price of $3,995. I told the dealer the budget was $2,500 so it was well out. The dealer came back with, "I could do it for $3,000." I had a good look over the car and a test drive then expressed my concern about the upcoming costs of registration and new tyres. They then offered the car for $2,800. That was a great deal and I was ready to buy after I gave the car a more thorough going over. During my inspection I found that the water pump was leaking and they offered another $200 off to cover the cost of replacing it.
I didn't buy this vehicle because of a few concerns relating to the water pump, but a couple of weeks later I found another VT Commodore Acclaim that didn't meet reserve on eBay. I ended up buying this car for $2,800 after some negotiation. It was a private sale and getting to meet the owner gives important information about the real condition of the car. You can tell if the owner has cared for the car, and a few careful questions can usually determine if the seller is honest about the car's problems. In the case of the owner of the Acclaim, he knew all the common VT Commodore problems, could recite what work had been done to the car over the years, could explain some of the issues the car had, and took good care of the car so it would be safe and reliable transport for his wife and children. All that was needed was a quick look over of the car and I was satisfied.
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