Dealer Markup $10,000???
#16
01-12-2015, 11:42 PM
Join Date: Aug 2014
Location: Colorado
Posts: 184
Rep Power: 19 
I don't see this as anything unusual, other than some folks expecting a business to operate for no reasonable profit.
Dealers routinely scan for cars that are being sold for less than what they thing the market will bear. They must consider what it costs to CPO the car. Let's be conservative and say the CPO warranty itself costs $3000 (I think it is a few hundred more). To CPO a car, the dealer must take care of all service items due in the near future (I forget the number of months/miles, but it is more generous than I would have thought). Let's assume the seller to the original dealer decided to sell the car shortly before a lot of service items and tires were due to save themselves some money (I do this!). At that age, spark plugs, tires, full service, etc were probably due and adds up to as much as $2500 to $3000. So let's be say they've spent, at their costs, around $5000 on the car to get it in condition for CPO. That leaves them wanting to net around $5k on the car.
Now they also have to pay salaries (including clerks, janitors, accountants, etc.), sales commissions, power bills, etc. out of their profits. They also have to assume that most buyers will want a price break of some kind. Even if they are fairly aggressive in holding the line, let's say they allow a mere $2000 for a price break... now they only have a $3k net before all of their operating/sales costs... then they have to pay taxes on that.
If course, they probably bought it for less than the listed price from the original dealer so their working room is more than that, but in any case their theoretical final profit when everything is considered is probably a far cry less than $10k. Of course, why the heck would anyway bother going to all of this trouble unless they are planning on making enough profit to make it worthwhile to run a business!
If the final sales price ends up being somewhere around retail market value, then there is no gouging as the buyer got a reasonable deal on a well-prepped CPO warranted car and the dealer made the profit that keeps them in business.
Dealers routinely scan for cars that are being sold for less than what they thing the market will bear. They must consider what it costs to CPO the car. Let's be conservative and say the CPO warranty itself costs $3000 (I think it is a few hundred more). To CPO a car, the dealer must take care of all service items due in the near future (I forget the number of months/miles, but it is more generous than I would have thought). Let's assume the seller to the original dealer decided to sell the car shortly before a lot of service items and tires were due to save themselves some money (I do this!). At that age, spark plugs, tires, full service, etc were probably due and adds up to as much as $2500 to $3000. So let's be say they've spent, at their costs, around $5000 on the car to get it in condition for CPO. That leaves them wanting to net around $5k on the car.
Now they also have to pay salaries (including clerks, janitors, accountants, etc.), sales commissions, power bills, etc. out of their profits. They also have to assume that most buyers will want a price break of some kind. Even if they are fairly aggressive in holding the line, let's say they allow a mere $2000 for a price break... now they only have a $3k net before all of their operating/sales costs... then they have to pay taxes on that.
If course, they probably bought it for less than the listed price from the original dealer so their working room is more than that, but in any case their theoretical final profit when everything is considered is probably a far cry less than $10k. Of course, why the heck would anyway bother going to all of this trouble unless they are planning on making enough profit to make it worthwhile to run a business!
If the final sales price ends up being somewhere around retail market value, then there is no gouging as the buyer got a reasonable deal on a well-prepped CPO warranted car and the dealer made the profit that keeps them in business.
I fully expect businesses to make money. I am a businessperson, myself. However, in this case a vehicle which was priced appropriately at $69k was bought by a dealership and is now being sold at $79k. It is now $10k overpriced. That car, with those options is probably worth $69k CPO'd. With that relatively low mileage, I doubt they had to perform a lot of service but I'm no expert on Porsche maintenance schedules, so I'm just guessing here.
IMO, very little value added for the price increase. The car must not have had much work done to it because it was immediately listed at the higher price. It's still listed at both dealerships still, so the old advertisement hasn't even had time to expire. How much could they really have fixed on it?
#17
01-13-2015, 11:59 AM
It is the same situation here in Germany: a vehicle from the Porsche Center will be priced approx. 10,000 EUR more than a comparable vehicle from a private seller or indy car dealer. Part of that markup goes for the glass castle that needs to be paid for, the smart sales consultant and the lovely blonde working reception desk. Then it's that air of exclusivity that gets factored in. And of course the CPO efforts which may cost a little or a lot depending.
Regards,
CF
Regards,
CF
#18
01-13-2015, 09:01 PM
You presume to know much about what I expect.
I fully expect businesses to make money. I am a businessperson, myself. However, in this case a vehicle which was priced appropriately at $69k was bought by a dealership and is now being sold at $79k. It is now $10k overpriced. That car, with those options is probably worth $69k CPO'd. With that relatively low mileage, I doubt they had to perform a lot of service but I'm no expert on Porsche maintenance schedules, so I'm just guessing here.
IMO, very little value added for the price increase. The car must not have had much work done to it because it was immediately listed at the higher price. It's still listed at both dealerships still, so the old advertisement hasn't even had time to expire. How much could they really have fixed on it?
I fully expect businesses to make money. I am a businessperson, myself. However, in this case a vehicle which was priced appropriately at $69k was bought by a dealership and is now being sold at $79k. It is now $10k overpriced. That car, with those options is probably worth $69k CPO'd. With that relatively low mileage, I doubt they had to perform a lot of service but I'm no expert on Porsche maintenance schedules, so I'm just guessing here.
IMO, very little value added for the price increase. The car must not have had much work done to it because it was immediately listed at the higher price. It's still listed at both dealerships still, so the old advertisement hasn't even had time to expire. How much could they really have fixed on it?
Price is not fact only an opinion.
The dealer is entitled to its opinion.
If a buyer walks in not realizing he is in a dealership and pays the "sticker" price whose fault is that.
I don't think I've ever of a car buyer offering to pay more money because the dealer priced the car too low.
BTW, when I found a 2003 996 Turbo with a CPO it was listed at around $62K. I managed to buy it for nearly $5K less. I had my opinion as to what the price should have been.
#19
01-13-2015, 11:49 PM
I don't know if PCNA is that easy to scam, but I will say, after owing more than half a dozen Porsches, used and new over the years, that PCNA is remarkably inefficient and often incompetent. They are lucky their German mother-ship makes such great cars.
#20
01-14-2015, 11:47 AM
CPO cars are good insurance for the buyer.
So $10 profit on" asking " price (maybe, don t know what they paid or their final cost was).
I believe that car is worth somewhere in between 69 and 79.
So they ll try for a home run but may except considerably less than $79.
If I liked the car I d make an offer knowing what you already know. Use it to your
advantage.
Lower mileage Porsche s always bring more money. The dealers know that and operates on that fact. (before I get flamed, not saying a high mileage car is bad just talking price points).
So $10 profit on" asking " price (maybe, don t know what they paid or their final cost was).
I believe that car is worth somewhere in between 69 and 79.
So they ll try for a home run but may except considerably less than $79.
If I liked the car I d make an offer knowing what you already know. Use it to your
advantage.
Lower mileage Porsche s always bring more money. The dealers know that and operates on that fact. (before I get flamed, not saying a high mileage car is bad just talking price points).
.
.
#22
01-14-2015, 10:24 PM
Yes, you better believe it...Porsche dealers stack on $10-15k markup on their CPO vehicles. And they don't budge much from that either. Porsche is not a high volume sales brand, so they have to make the profit on what they sell. Compare that to say, VW or Toyota, they are more willing to take less or no profit to move units, as there are incentives from the manufacturers for monthly volume targets.
#23
01-15-2015, 02:28 PM
Lol you guys are funny. This is a classic sales move. When something doesn't sell for a while, usually you take it off and then increase the price. It generates buzz, so people will think exactly like the OP "oh what happened to make the price go up?". Then this renews interest in the car, and gets people talking about it again.
This is a classic move to do in real estate.
This is a classic move to do in real estate.
#24
01-15-2015, 03:13 PM
Lol you guys are funny. This is a classic sales move. When something doesn't sell for a while, usually you take it off and then increase the price. It generates buzz, so people will think exactly like the OP "oh what happened to make the price go up?". Then this renews interest in the car, and gets people talking about it again.
This is a classic move to do in real estate.
This is a classic move to do in real estate.
Yes, but this isn't the same seller. From what I recall it's not even the same state and this is a wild guess but I don't think a lot of 911 buyers are nationwide searchers.
So the original dealer (Florida) wholesaled the car and the Porsche Beachwood (Ohio) dealer had to ship the car and CPO it.
Last edited by 3Series1; 01-15-2015 at 03:42 PM.
#25
01-15-2015, 03:27 PM
Join Date: Aug 2014
Location: Colorado
Posts: 184
Rep Power: 19
I'd have less of a bad taste about this if it was a lease turn in or trade in and they just set the price at that from the beginning. My problem is that they took an appropriately prices car off the market and jacked up the price to higher than its worth by $10k. So now, it's either out of a potential buyer's budget or someone with the money is going to get screwed because they didn't know what happened here.
I never was going to buy it, but in my daily searches, I noticed the transaction. It's not illegal or unethical, it's just unfortunate. If it had sports chrono and some other options I may have been interested.
I never was going to buy it, but in my daily searches, I noticed the transaction. It's not illegal or unethical, it's just unfortunate. If it had sports chrono and some other options I may have been interested.
#27
01-16-2015, 06:22 AM
Typical
Just from reading posts for years on these forums, you get a sense as to why dealers really jack up used prices..... because you will pay for it!
Some points:
1 - Most folks trust a dealer more than a non-Porsche dealer or private seller and therefore dealers charge for that
2 - Recourse should there be a problem, so dealers charge for that perception.
3 - Dealers are better at convincing ignorant buyers that a particular color or option makes the car worth more (wholesaling doesn't price options other than the most basic such as color or transmission type)
4 - Folks who buy a dealers always, for some reason, think they got a good deal and post about it. I figure a system who sells cars for over 100 years is gonna beat a Schmoe who purchased maybe five cars is his life.
Nothing wrong with dealers, but you will pay.
Peace
Bruce in Philly
Some points:
1 - Most folks trust a dealer more than a non-Porsche dealer or private seller and therefore dealers charge for that
2 - Recourse should there be a problem, so dealers charge for that perception.
3 - Dealers are better at convincing ignorant buyers that a particular color or option makes the car worth more (wholesaling doesn't price options other than the most basic such as color or transmission type)
4 - Folks who buy a dealers always, for some reason, think they got a good deal and post about it. I figure a system who sells cars for over 100 years is gonna beat a Schmoe who purchased maybe five cars is his life.
Nothing wrong with dealers, but you will pay.
Peace
Bruce in Philly
#28
01-16-2015, 07:59 AM
I've purchased three cars in the last five years... five in the last seven. Been nice knowing all of you 
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