Am I wrong to think my dealer is a money grubber? He lost a sale of a new G4.

[Remy]

It sounds like I might be the only person here with actual experience on the other side of this fence. I spent many years selling cars, both at big dealerships as well as smaller used car lots. And while I don't know your local car economy there in Michigan I can tell you several truths about this situation.
First, no dealership is gonna give you that much on the car as a trade in. You are not taking into account any work that needs to be done to the car before they can sell it. Assuming the car needs "nothing" they have to pay the kid that washes it, the photographer and who ever updates their inventory to list it. Then there is title fees and the transfer paperwork and making sure they add it to the insurance rider. Plus if it does sell they have to pay the salesperson which may be as much as 15% of the sale price before financing and fees.
Second you are assuming the car will sell at the price he told you. You can see for yourself on this site what used models are going for. In Atlanta a used Mirage by a private seller is $6500 or less. A buy here/pay here lot is around $9000+ with fees that will quickly make it 12k. This is regardless of if its a 14 or 15 and how many miles are on it or what trim level. Your trade in will most likely go to auction. Roughly 70% of all trade ins go to auction after 6 months on the lot. Thats six months of paying for it to sit there doing nothing. They can only afford to do that if they don't have anything invested in the car. And so we are clear, most cars sent to auction sell at a loss for the dealership otherwise they would have sold it already.

I honestly don't suggest people buy a new car ever. These cars are a prime example of a vehicle that has already lost thousands in value before it is even sold. KBB says a 2017 G4 with 5k miles is only worth $8000 trade in and might net you 10 grand on a private party sale. BUT if you wait until the end of the year when they have to start clearing stuff off the lot or pay taxes on it, or are selling the test drive cars that got a little dinged up or have high miles you can walk away with a better deal before you even start factoring in any of the incentives from Mitsubishi. If you don't have a legitimate NEED to have the newer car just keep paying your old one down. Right now there isn't a huge difference in value between the 2014 and the 2015, it will be the same next year too.

I apologize if any of this came out too harsh.

[JimInMichigan]

I see what you are saying, and it makes sense to the layperson. Most dealership profit comes from the sale of used cars, and it has to be thousands, not hundreds, in order for them to stay in business. That is why trade-in values are pretty much standardized by outfits like KBB...you know exactly what to expect to get for your trade when you walk in. You are asking the dealership to bet $2000 that whomever walks into the dealership and wants to buy your ES will not haggle down more than $500. If they do, the dealership is stuck with the car or will be forced to lose money. Keep in mind also that not only does the dealership have to pay the guy that sold you your G4, he also has to pay the guy who sells your ES. He simply can't do that with the few hundred bucks Mitsubishi gives him for selling you a G4.

You are just not giving the dealership enough 'wiggle room' with your trade-in for them to be comfortable with the deal. You want them to hand you 94% of what they could hope to sell your car for...and selling it for that would be a 'best case scenario' for them. They may sit on your ES for a year and only be able to get $7500 for it. The result is they LOSE several hundred dollars on your "bird in the hand".

It isn't a gamble they want to take, and I can't say I blame them.

Making more sense to me, thanx.

Thanx for all the replies.

[IchabodCrane]

I get that you're disappointed but truth is you were offered a very fair price in trade. As far as your financed carryover, that's on you. When we buy a car with little or no money down and tiny payments forever it cannot maintain the value of it's residual financing.
I just went through the same situation but chose to go ahead with it anyway because:
- Residual was 2.9% now 0%
- Got snow tires and rims in new deal
- Trade-in needed brakes and tires
- New Mirage is a substantial upgrade over 2014 in key areas.
Think it over. It may still be a deal that works for you once you accept the facts.

[JimInMichigan]

I get that you're disappointed but truth is you were offered a very fair price in trade. As far as your financed carryover, that's on you. When we buy a car with little or no money down and tiny payments forever it cannot maintain the value of it's residual financing.
I just went through the same situation but chose to go ahead with it anyway because:
- Residual was 2.9% now 0%
- Got snow tires and rims in new deal
- Trade-in needed brakes and tires
- New Mirage is a substantial upgrade over 2014 in key areas.
Think it over. It may still be a deal that works for you once you accept the facts.

Naw, thinking is over. As much as I love the new G4, I can't even think of a $5K roll over on an $18K vehicle. Sure, I'm getting $3K in incentives, but just isnt worth it to me. I'll just keep driving my Mirage ES. Love the Mirage, but the new Brandy wine color and roominess of the G4 had me hooked ( well, almost ).

[IchabodCrane]

Naw, thinking is over. As much as I love the new G4, I can't even think of a $5K roll over on an $18K vehicle. Sure, I'm getting $3K in incentives, but just isnt worth it to me. I'll just keep driving my Mirage ES. Love the Mirage, but the new Brandy wine color and roominess of the G4 had me hooked ( well, almost ).

Can't say you're wrong there.
Gotta do what's best for you.

[IwantaMirage]

You have to pay to play. I get bored easily with cars and often trade in 1-3 years. This is a money losing proposition. But it is what it is. The dealer isnt there to make you money or to be generous. They are there to make $. Trading in used cars and reselling them is a way for them to do that. It isnt a secret that they make more profit on used cars than new ones. This is just how it is.

[Ranny]

I too am one who gets bored with cars and change more frequently than is practical. It's been said that leasing is the way to go for this scenario. One lesson learned when browsing Edmunds last month was that incentive are great at year end. Some decent models I viewed had up to 2500 off. In my price range, that's a big chunk. Upon looking after New Years, the incentives are all gone. I kind of knew timing was important, but this really drove it home. Next time the inevitable and insatiable new car bug hits, I'm waiting for incentive time.

[IwantaMirage]

I too am one who gets bored with cars and change more frequently than is practical. It's been said that leasing is the way to go for this scenario. One lesson learned when browsing Edmunds last month was that incentive are great at year end. Some decent models I viewed had up to 2500 off. In my price range, that's a big chunk. Upon looking after New Years, the incentives are all gone. I kind of knew timing was important, but this really drove it home. Next time the inevitable and insatiable new car bug hits, I'm waiting for incentive time.

Leasing a car for 1 year...or eve 2 years is not a good option....plus you pay 9% tax on a lease vs 6% tax on a buy. And with trade in they factor trade in value vs buy price and you only pay tax on the difference on a buy.
What I do is wait for the best incentives or left over models and buy at the end of the month or near a holiday and negotiate the best deal I can, I also make sure to trade when the car is due for maintenance, state inspection and tires, that also saves me some $....sometimes i do well other times not so much. But cars are entertaining and I dont have any other expensive habits. cars make me smile, until I get bored and want something different.

[IwantaMirage]

I sold new and used cars also. And have owned over 36 vehicles...

[wmo168]

Take it to Car max and see how much they offer you... Better to sell it yourself for $8000 and go buy a G4 right away,.. but remember since you trading it in you get sales tax benefit paying the difference in tax vs a full new purchase.