The Seller’s Dream Price To Understand
When the purchased second hand cars arrive at the showroom they are cleaned and checked and made ready for re-sale. Then comes the moment of truth for him, the Car Showroom owner, having just bought the cars at auction, has to display his dream price on the car´s front window. Now, he may have paid say £2000 (the true value) for the car he is about to place his dream price on. He will have to pay for the transport and for the clean-up so he will mark up the price to cover those items plus a profit. So, what will be his dream price be. I would say his dream price will be £3500 (100%).
Having been in the Far East for many years what shall the first offer to buy the car from him. Let us offer 60% of the dream price (£2100). Cries of disbelief, at the offer, are heard. However, the second hand car dealer needs to sell the car and he knows a negotiating process may be the only way to sell it. To our £ 2100 he responds with £3150 (90%). We counter offer £2450 (70%) . After a few minutes and maybe a break in the negotiating the final price is agreed at £2625. Remember be bought the car only two days before for the true value of £2000 and here we are buying it off him for £2625. He has made a 25% profit.
How Can We Pay The True Value
So what is stopping us from entering the auction process to buy at the true value. Answer “Nothing” just an understanding of the overall process, a little research and understanding the business art of negotiation.
To help in determining how much to pay for the car there are organisations that can give us the information at a small cost. Typically, in the UK, the Automobile Association or HPI can give a relevant number of prices.
Your negotiating with a car dealer has to consider:-
1) Do you have a car you wish to place with the dealer in part exchange for one of his cars
2) Do you have the cash to buy a car from him outright or with part-exchange.
The AA or HPI will give you the following info:-
A) The probable price the dealer has paid for the car from an Auction
B) The probable price the dealer has paid to another person in doing his business
C) The price the dealer will want for his car if it is an all cash deal
D) The price the dealer will want for his car if a car is to be considered as part exchange
The difference between the lowest price (A) and the Dream price (D) will be in the order of double the amount of (A).
Recently, a young Colombian woman was requiring to buy a second hand car. She attended the auction and was astonished to observe the process and later understood the difference between the true price and the dream price. This process applies universally to all matter of goods.(END)