Changed my mind on trading my vehicle in - Dealership says I can't

[ArjayAquino]

So looking to see if anyone has any insight on this. I went to red deer to trade-in my car for a 2011 impreza on Friday. The wholesaler that was going to buy my x3 from the dealership said they'd take it for $2,500. I thought that was really low but given the mileage and that it's a bmw I understood why. I agreed on the trade-in because I was already there anyway, and signed the papers for the financing. I pick up the impreza this saturday Aug 2nd.

Yesterday, I changed my mind and decided to try and sell it myself. I ended up getting $5000 cash and the person took it home lastnight.

Today I let the dealership know what went down and that I will give them the 2,500 as a downpayment rather than a trade-in value. But the finance manager is saying the bank probably can't change it and I have to trade-in the car because I signed the papers which states there's a trade-in. I find this odd, because the bank should only care about the 2,500 should it not? I don't understand why it can't be changed from trade-in to downpayment.

Anyone have thoughts on this?

Thanks

[16hypen3sp]

I would imagine the bank only cares about the cash but the dealer wants the car to resell for a profit.

Where is this dealer at in Red Deer? Name?

[Zhariak]

I'm pretty sure as long as you come up with cash to cover the trade in value, there shouldn't be any problems...

Has nothing to do with the bank...

[Sugarphreak]

...

[Masked Bandit]

This has got shady dealership written all over it. Sounds like the dealer doesn't want to put in the work to re-write the financing contract.

[benyl]

Or the wholesaler offered them $3,500 and they turned around and offered you $2,500.

by not trading in, you are eating into their profit.

[ArjayAquino]

thanks for the response guys.

I thought maybe the case that Benyl mentioned was a possibility, but the sales guy I was dealing with didn't seem to care when I told him that I ended up selling it. I think the finance manager was overly concerned that the bank wouldn't be able to change anything.

But I heard back from the finance manager, and she said that it can be changed she will just have to re-submit all the paperwork and I have to pay some legal fees. She also said according to the bank the financing rates might change because it's being changed from a trade-in. this part also makes no sense to me because why would that affect the rate? The only thing I can think of that could change the rate is the fact that it's a few days after the original application but I don't see how it could change much.

[syscal]

Originally posted by ArjayAquino
thanks for the response guys.

I thought maybe the case that Benyl mentioned was a possibility, but the sales guy I was dealing with didn't seem to care when I told him that I ended up selling it. I think the finance manager was overly concerned that the bank wouldn't be able to change anything.

But I heard back from the finance manager, and she said that it can be changed she will just have to re-submit all the paperwork and I have to pay some legal fees. She also said according to the bank the financing rates might change because it's being changed from a trade-in. this part also makes no sense to me because why would that affect the rate? The only thing I can think of that could change the rate is the fact that it's a few days after the original application but I don't see how it could change much.

Margins are tight and I think we can assume that the profit made from reselling the trade-in would have been used in consideration of the other price. The risk is theirs though. Pretty sure they just get flat-rate payment from the bank on a closed finance deal so rate shouldn't matter to the dealership.

[codetrap]

I'd ask for a description of those "legal fees"...

[shakalaka]

Or a reason as to why the rate should be changed due to this at all? Doesn't make any sense.

[ArjayAquino]

Originally posted by shakalaka
Or a reason as to why the rate should be changed due to this at all? Doesn't make any sense.

Agreed, I'll definitely bring it up once I hear back again.

[rage2]

This is no different than going to future shop, buying a TV with extended warranty (profitable) to get a bigger discount on the TV, then refunding the extended warranty to get a bigger discount.

As benyl mentioned, a favorable rate, or discounts on selling price is all part of a package on the profit they intend to make on a trade in. You take away that profit margin, all of a sudden the math doesn't make sense, and they would lose out on the deal while you profit beyond the initial deal. I'm surprised they let you pick up the new car without dropping off the trade-in at the same time just to prevent this exact scenario from happening.

It's easy to point fingers and blame the dealer for being shady, but IMO this is more shady, however unintentional, by the OP.

[revelations]

2,500$ vs 5000$ private?

I realized dealerships hosed people a bit on resale, but wow ....

[benyl]

Originally posted by revelations
2,500$ vs 5000$ private?

I realized dealerships hosed people a bit on resale, but wow ....

Dealerships should only only sell cars that meet spec.

When you trade in the car, most reputable dealers will have to replace the brakes, tires and other consumables.

That $2,500 they gave you plus the $1,500 in repairs and fluid changes they put in only allows for $1K in profit if sold at $5K.

I doubt that the car the OP sold had new brakes, tires, etc and the person who bought it will probably have to bear the cost of those replacements.

[ExtraSlow]

I agree with Rage, this is shady on behalf of the OP. Trade-in values (and profits) are a negotiated part of the new car purchase agreement.

I'd say you should offer to renegotiate the purachase agreement without that trade-in. I would expect the dealership to raise the purchase price to add back the profit you have removed.

[shakalaka]

What Rage says makes sense but then the dealer should state just that to the OP. Not beat around the bush or make excuses as to why the rate is going to be higher. They should be honest and say the deal we talked about earlier was based on that package deal and since we won't have a profit to make from a traded in vehicle, we need to change that around to make it fair for us. Then I would understand, but the fact that they think they can use 'shady' reasons and get away with it pisses me off.

[BerserkerCatSplat]

Originally posted by shakalaka
What Rage says makes sense but then the dealer should state just that to the OP. Not beat around the bush or make excuses as to what the rate is going to be higher. They should be honest and say the deal we talked about earlier was based on that package deal and since we won't have a profit to make from a traded in vehicle, we need to change that around to make it fair for us. Then I would understand but the fact that they think they can use 'shady' reasons and get away with it pisses me off.

I agree, OP basically pulled a bait-and-switch on the dealer, and now the dealer is trying to obscure the issue with BS about "legal fees." Neither party's hands are clean, but the dealer needs to get their story straight.

In the end, I suspect the OP is going to learn a hard lesson about trying to rewrite a contract after he signed off on it.

[ExtraSlow]

Dealer is communicating poorly, and depending on how much they mess with you from this point, you could consider this to be "acting in bad faith".

OP sold a car privately after signing paperwork saying he would trade in.

Two wrongs in this situation.

[MGCM]

this was very educational, thx OP, thx beyond:thumbsup:

[spike98]

First, OP entered into an agreement with the dealership and is in breach of that agreement. (Actionable). Second the dealer is covering up its desire for profit by calling it "Legal Fees" (Legal, but BS Tactics).

If this were to go to court if the dealer could prove that damage had occurred (loss of $$), the dealer would win.

This is basic contract law.

However most if not all of the dealerships i have dealt with (RV and Auto) have always told me that until i pick up the car, i can always sell it private. This is a courtesy though and not required.

This is always a requirement i have before doing a deal with a dealership and OP should have done his due diligence before inking a deal.

Note: I am not a lawyer nor do i play one on TV

[flipstah]

I see this as the OP's fault than a shady dealer. :dunno:

That's why you sign contracts so people don't flip-flop on you last minute.

So what happens now since the car is gone? Either the sale gets renegotiated or revoked...?

[ExtraSlow]

One easy solution for anyone else who finds themselves in a similar situation would be to negotiate the purchase WITHOUT INCLUDING the trade-in. Then, once that's all hammered out, you can ask them what they'd give you for trade-in as a stand-alone deal.

I had no issues with this last time I bought a new vehicle, and in the end, the dealership was very happy to take my trade-in, at a great price, without issues.

[spike98]

Originally posted by flipstah
I see this as the OP's fault than a shady dealer. :dunno:

That's why you sign contracts so people don't flip-flop on you last minute.

So what happens now since the car is gone? Either the sale gets renegotiated or revoked...?

The dealer could tell the OP to pound sand and keep his deposit. Or re-neg the whole deal. They likely wont give the OP the same price on the new vehicle as it most likely depended on profit from the trade.

[ArjayAquino]

I definitely understand that I could have handle it better. I wasn't thinking about trying to screw anyone out of the trade-in profit. In my mind I was just going to give them cash instead of the trade-in value and just didn't think of the possible ripple effect of their negotiated price on the car I'm buying. I was actually fine with trading it in, but I was driving it around on Saturday night and just kept thinking about the price and that the car was still in good condition. Then Sunday morning I said screw it and see what I can get. It had new brakes replaced and new suspension done to it just before I bought it 40 K KMs ago so there wasn't any big items to be done.

I also negotiated on the price of the car I was getting before the trade-in value was figured out (he had to make calls to wholesalers after). I was trusting that the number he gave me was what the wholesaler actually said, but looking back I see that the value of the trade-in could have been lowered on purpose knowing how much discount I got on the new car.

Either way I didn't think about it thoroughly and all the drama could have been avoided. Lesson learned.

[Canucks3322]

I think they'll just make it back up in the in the financing kick back or tack on some bs fees.. not hard to make up on a < $5000 car. .. They're a dealer they'll find some other way to fuck you they always do.

[helrazr]

Originally posted by ArjayAquino


I also negotiated on the price of the car I was getting before the trade-in value was figured out (he had to make calls to wholesalers after). I was trusting that the number he gave me was what the wholesaler actually said, but looking back I see that the value of the trade-in could have been lowered on purpose knowing how much discount I got on the new car.

Either way I didn't think about it thoroughly and all the drama could have been avoided. Lesson learned.

If this is the case then I think you have an argument for your purchase and repayment of the $2500 missing from the deals completion, but selling your vehicle privately, after taking delivery of the vehicle you had signed a contract on in the first place is a little shady even though it is easy to understand why you would want to maximize your return.. Problem with stealerships is they do not reveal to anyone under the rank of Sales Manager or GSM the true cost of the deals they do. i.e., All of these "At dealer cost" deals and "Employee Pricing" events are all hogwash.

The true price of a vehicle to the dealer principal is never revealed and the windows stickers with all of the fancy pricing for the base model + options is all hokum as well. There are thousands of hidden profit dollars in new vehicle pricing. There is simply no way you could pay your sales, administration, finance, parts and service teams based upon what you see on a windows sticker (albeit retail parts and service sales are dealer profit centers as well, but that is another conversation). Added profit to the dealer principal is extended warranties and protection packages the finance department tries to sell you, but really, explain how, a new 2014 optioned out unit can list for $75K sit on a lot for 3-6 months and then get blown out for $50-$55K? Because there is enormous profit in new vehicle sales.

In this case it does sound like they had a deal for more than what the offer to you for the trade in value on your BMW was, again, something the dealership would never admit to because it looks and feels really darn shady unless you happen to be the Sales Manager negotiating the deal.

As it happens though, in a free market society, supply and demand is king, offering you less for your trade in than what they plan to wholesale it for the second you drive off the lot is just standard industry practice. Ford dealerships won't make any where near as much profit off your deal on a new Focus, but they trade volume for profit on deals like that and shred your wallet when they sell you that optioned out Mustang GT350. And because of supply and demand they will often sell especially as new model year with fancy new bells and whistles for more than the window sticker states as list, at least they used to quite often when I was around this industry.

I would argue that you do have a case though in terms of what you negotiated for the price before trade in was talked. But by selling your vehicle privately but you did actually breach your contract. The dealership is I would suspect trying to work the numbers in their favor without actually having to reveal the truth about what the wholesale value of your BMW actually was to them as it puts big egg on their face by seeming super shady.

[01RedDX]

.

[spikerS]

You are in breach of contract, as you signed off on the deal that they would get the X5.

since you have sold it privately, instead of turning it in, it can be interpreted in 2 ways. 1) you sold a car that did not belong to you, thus, the new owner that you sold it to, could be in possession of stolen goods, as once you took delivery of your new car, the X5 effectively belongs to the dealer, and they could choose to now report it stolen. That is not in their best interest, but they COULD, because the contract you signed is also the bill of sale and an agreement to the terms.
2) The Dealer needs to be made whole, and could choose to accept $2500 in liu of the X5.

Having said all that, Anything that would happen outside of the deal is of no concern of the OP in any way, and as such, the dealer should never be counting on that and writing it into a deal.

Quite frankly, I am shocked you were able to take delivery of the new car without having the X5 with you. Every car deal I have done, I have had to present my trade in at the time I take the keys for the new car. The dealer swaps over the plates for me, transfers things like my golf clubs and such, and I drive off the lot.

[FraserB]

He hasn't taken possession of the new car yet.

But now the dealer doesn't need to honor anything that was agreed to prior to you selling the car. Hopefully they do refuse delivery and/or really increase the cost now that you sold it privately.

[spikerS]

Originally posted by FraserB
He hasn't taken possession of the new car yet.

But now the dealer doesn't need to honor anything that was agreed to prior to you selling the car. Hopefully they do refuse delivery and/or really increase the cost now that you sold it privately.

Ahh, my bad, then my previous post is pretty much useless, I understood it that he HAD taken possession.

In this case, it is now in the dealer's hands. They can choose to void the contract and keep your deposit since you can no longer produce the X5 that is in the contract, or, they can rework the deal in entirety, or choose to accept $2500 in lieu of the X5. Of those 3 options, the latter will probably happen.

At this point, selling it privately is no different to the dealer than the X5 being written off in a car accident, it is just not available in trade anymore.

[killramos]

Its still reneging on a contract. If you crashed a car the day before trading it in there would still be consequences, though they would likely be your insurance companies to bear.

[A790]

Any updates?

[ArjayAquino]

God damn that was pretty shady shit I did, too bad I realized it on Monday when it was too late (I just gave the finance manager another reason to hate Mondays).
Part of the reason why I didn't think much of it was I thinking in simple terms; can't I just give them the 2,500 bucks since the wholesaler only offered that much? Not thinking about the fact that they technically owned the x3 at that point *faceplam*. This is what happens when you make decisions out of the blue.
I feel shitty about the situation too because the dealership was great to deal with when I was there.

As for an update, they just re-submitted the finance application to the bank to change it to downpayment on Monday. Which was what I thought would was going to happen. I have to pay some legal fees for re-doing that process again.

I just got lucky that the dealership was willing to work with me. I think it would have been a different story if the car I was trading in was higher value and not going to a wholesaler.

Needless to say, I owe the finance manager some chocolates or something.

[takkyu]

I'd say go in with kneepads on.. who the fuck wants some shitty walmart chocolates?

[01RedDX]

.

[ArjayAquino]

Originally posted by takkyu
I'd say go in with kneepads on.. who the fuck wants some shitty walmart chocolates?

Finance manager is a woman. What about some roses and a teddy bear to make it extra awkward.

[bignerd]

Did you sign over registration already to the dealership?

Because I can't see how they "technically" owned it if you didn't. You made a contract with them yes, but in that contract you were also suppose to receive the Subaru-which you have not YET (again unless they gave you the bill of sale already for it?)

To me, they "technically" did not/do not own the car until Aug 2?
You had a contract for the proposed purchase and sale of both vehicles to one another for Aug 2. To me the only thing they own is possibly your deposit now.


And quit calling them "legal" fees, they are probably a PITA fee and nothing more. Please tell me your interest rate isn't something crazy like double digits either.

[A790]

Originally posted by ArjayAquino
God damn that was pretty shady shit I did, too bad I realized it on Monday when it was too late (I just gave the finance manager another reason to hate Mondays).
Part of the reason why I didn't think much of it was I thinking in simple terms; can't I just give them the 2,500 bucks since the wholesaler only offered that much? Not thinking about the fact that they technically owned the x3 at that point *faceplam*. This is what happens when you make decisions out of the blue.
I feel shitty about the situation too because the dealership was great to deal with when I was there.

As for an update, they just re-submitted the finance application to the bank to change it to downpayment on Monday. Which was what I thought would was going to happen. I have to pay some legal fees for re-doing that process again.

I just got lucky that the dealership was willing to work with me. I think it would have been a different story if the car I was trading in was higher value and not going to a wholesaler.

Needless to say, I owe the finance manager some chocolates or something.
You're only human. Humans make mistakes. In the end, everything will work out for both parties and you learned something valuable :)

Don't stress about it too much.

[ArjayAquino]

Originally posted by bignerd
Did you sign over registration already to the dealership?

Because I can't see how they &quot;technically&quot; owned it if you didn't. You made a contract with them yes, but in that contract you were also suppose to receive the Subaru-which you have not YET (again unless they gave you the bill of sale already for it?)

To me, they &quot;technically&quot; did not/do not own the car until Aug 2?
You had a contract for the proposed purchase and sale of both vehicles to one another for Aug 2. To me the only thing they own is possibly your deposit now.


And quit calling them &quot;legal&quot; fees, they are probably a PITA fee and nothing more. Please tell me your interest rate isn't something crazy like double digits either.


The X3 registration wasn't signed or anything yet, but the bill of sale for the impreza was which mentioned the trade-in.

She had to resubmit the finance app so I'm fine with calling a legal fee and a PITA fee. The interest rate didn't change either.

[ArjayAquino]

Originally posted by A790

You're only human. Humans make mistakes. In the end, everything will work out for both parties and you learned something valuable :)

Don't stress about it too much.

appreciate that, it's definitely another lesson learned. Hopefully by seeing this thread others don't make the same mistake.

[J.M.]

Looks like everything worked out in the end. :clap:

[SOAB]

Originally posted by helrazr


Problem with stealerships is they do not reveal to anyone under the rank of Sales Manager or GSM the true cost of the deals they do. i.e., All of these &quot;At dealer cost&quot; deals and &quot;Employee Pricing&quot; events are all hogwash.

The true price of a vehicle to the dealer principal is never revealed and the windows stickers with all of the fancy pricing for the base model + options is all hokum as well. There are thousands of hidden profit dollars in new vehicle pricing. There is simply no way you could pay your sales, administration, finance, parts and service teams based upon what you see on a windows sticker (albeit retail parts and service sales are dealer profit centers as well, but that is another conversation). Added profit to the dealer principal is extended warranties and protection packages the finance department tries to sell you, but really, explain how, a new 2014 optioned out unit can list for $75K sit on a lot for 3-6 months and then get blown out for $50-$55K? Because there is enormous profit in new vehicle sales.

The dealership is I would suspect trying to work the numbers in their favor without actually having to reveal the truth about what the wholesale value of your BMW actually was to them as it puts big egg on their face by seeming super shady.

I don't understand this mindset.

do you go to a store and ask them what their cost is on a pair of jeans? or the grocery store and demand to know the cost on a bunch of bananas?

would you go to a showhome and demand the salesperson to tell you what their cost is to build the home?

what gives you the right to dictate how much someone is allowed to make on a product? you have a choice to buy and a chance to negotiate a price on something. if they sell it to you at that price, great. if not, the negotiations continue. you don't have a right to what the dead cost on a product.

you make it sound like profit is ok for every business out there except for car dealerships.

[beyond_ban]

After reading this thread, I'm still stuck on the fact that you were going to accept $2500 for an X3. Even 5k seems really cheap for that vehicle. I know it doesn't really matter at this point, but was the vehicle thrashed or something?

[G-ZUS]

Originally posted by beyond_ban
After reading this thread, I'm still stuck on the fact that you were going to accept $2500 for an X3. Even 5k seems really cheap for that vehicle. I know it doesn't really matter at this point, but was the vehicle thrashed or something?

http://forums.beyond.ca/st2/2004-bmw-x3-2-5i-with-2-sets-of-wheels-tires/showthread.php?s=&threadid=384197

[googe]

WTF is wrong with you people. :rofl:

OP you did nothing wrong. Dealerships fault for not being straightforward about where the money comes from. They intentionally obscure all of this shit to make you think you're getting a deal. Their handwavy math bullshit backfired this time.

The first dealership to actually put the numbers in straightforward terms up front won't have this problem.

And yeah, there are no fees to resubmit paperwork. That was them trying to recover what they thought they were making.

Also, there is no such thing as a sales contract until money or property ("consideration") changes hands. If I sign a contract saying I owe you $500 by Friday, it means nothing. Contracts become binding only after that happens.

[jonnycat]

The only real issue here, is the bill of sale and contracts would have to be re-done for a couple of reasons

A) obviously no trade anymore

B) The total amount owing at the bottom would change slightly even with the $2500 down due to the loss of the GST credit on the trade wich is a whopping $125.

The rates will change so the they can pack more profit on to the deal.

The legal fees are probably re-imbursement of the contract cancellation (if they had been sent back to the bank) and possibly lien searches.

I would do the same thing in a heartbeat. Dealers dont make deals based on the turn around as a rule. They consider them as two seperate deals with two seperate margins.

Sure the odd time if they have it pre sold to a wholesaler for which they take into account that they have another seperate deal, but to put their eggs in one basket of banking on the sale of a trade to make the deal profitable on the new sale is stupid.