50% margin on a 6k car? That seems excessive to me… especially for a company with minimal overhead… they are not running a dealer lot as it is all online.
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The percentage is only that high because the car is relatively cheap. Some costs are fixed and a few grand baked in for profit only makes sense for a business, right?
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Think of it this way - it’s $2-3k margin per car. It doesn’t matter if it’s a $6k car or a $56k car. Which seems plenty fair - aside from carrying the actual equity, the selling costs are pretty unrelated to selling price. If anything, I’d think older, cheaper cars risk having more reconditioning expense to get them salable.
You mention Carvana being for the lazy. That is the case sometimes. But so is taking any other dealers initial offer. I’m trying to buy right now, and every dealer’s first offer has had a trade value $1k lower than Carvanas cash offer.
Right now, 2 of the 3 options I’m pursuing are listed with no-haggle Vroom, and little haggle (only a little on trade value) Enterprise car sales. The local dealer is only my top choice based on what I think is a reasonable expectation of what we will agree on, based on stated numbers they’d be third on the list. Of course, I’m only looking at the size of check I’ll have to write for the difference, I couldn’t care less if the stated trade value is $25k or $5k…
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Useless datapoint: relative so far offered about 8% more at one dealer than Carvana (on $13k sale).
I’m also in the market for a new car this year. My Lexus is 10 years old & only has 46k miles. Husband thinks it’s still ok.
We usually go through a broker that we’ve used for years. I like the idea of telling him exactly what my desires are in a make & model. Then he calls me with a deal he has found. With him we have to sell our resale on our own. Usually have had good luck with Craigslist on our resale.
But have you checked out Vroom as a reliable deal? The commercials are great. I’ve been reading your posts here & I’m picking up advice from you guys.
Are they realiably the best price? Of course not. But you can easily pull up what you’re looking for, and see how they compare to local dealer ads. When I bought my car from Carvana a couple years ago, it was $1,000 less than any comparable local car (after negotiating). But at the same time, Carvana was thousands more expensive for other make/models. If you are just looking for a particular car, the online dealers are going to be competitive with the multitude of other listings you’ll find; if you are looking for the best deal on that car, it’ll be hit or miss (and often a miss) if they’re in the running.
Or do you mean reliable as in being a reliable dealer? Their listings document blemishes I’d often never even notice, and once you get the car and find they missed something, theyre quick to issue a price adjustment. Vroom’s $599 delivery fee is often prohibitive, and their trade values (at least currently) obviously include a “sight unseen” adjustment. But they’re straight with their fees and don’t tack on all sorts of junk like most dealers - you can calculate an accurate out the door price before ever speaking to anyone.
Also make sure you compare apples to apples. You know what your broker charges you. But a lot of dealers (at least around here) have started adding “reconditioning” fees and other crap - beyond the already nonsensical “doc fee” - that should be part of their margin, but they break out so they can advertise a lower asking price. With a $24,970 asking price, one dealer added a required $1,995 line labeled “First place finish ELO”, which I was told was the fee for them getting the car prepared to sell. Took the total cost (of this supposed $25k car) to nearly $29,000 before trade allowance. (When I simply asked if that was a joke, he came back with a revised proposal that gave me $300 more for my trade, confident that’d resolve my objection 
)
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Got a quote from vroom after learning about it here. Saw one of their commercials for the first time tonight too.
They are slightly higher than Carvana. I may actually pursue this after doing some homework on vroom.
Your husband is right, naturally. 
Unless you live in a harsh environment, have had a bad repair history, or have done no maintenance on the car, I would keep it for another 10 years, and still, possibly, be under 100k miles. If you’ve got any insurance other than liability, it will keep going down. If you have to pay an annual value tax on the car, it will keep going down as well.
Our daily drivers are 10 and 11 years old, each with slightly over 100k miles. A couple of months ago, in anticipation of future bargains, we began searching for new and recently off lease cars. The latter seemed way overpriced, and shy on inventory. The former did not live up to my performance expectations. We’ve decided to put a few maintenance dollars into each vehicle and drive them for at least 5 more years.
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Oh come on partner…
Yes, low mileage, but it’s 10 yrs old.
Every time I take the Lexus in for service, the repair guy wants me to call him if or when I’m ready to sell.
So I guess I’ll put getting a new car on the burner for now. I’ve been looking at those beautiful new BMW’s. 
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My personal benchmark for whether the car is still ok or not is whether essential stuff still works or not and how much I have to put into it to keep it running beside routine maintenance. Reliable cars driven carefully with low mileage should hold up pretty good for at least 5 more years, if not 10 more.
Although last 3 cars were all totaled by third parties so I never actually had to trade a car in since 1998. I think we just end up driving them until it takes a minor bump to total them lol.
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Just got a follow up from vroom for $500 more. Hmm… Wonder if this is a tactic when you don’t bite on the first offer.
Anyone ever sold a vehicle to Vroom? Most sales reviews seem good but there are some reviews in general that indicate lack of communication by phone aka ‘typical internet only company behavior’.
Thanks for any input.
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The reason your service guy wants to buy yours is because
- it’s in great shape and it’s depreciated greatly even with way way below miles.
- the newer ones look stupid with big ass mouth front ends…
- lady driver so they are assuming it’s been driven carefully
What is it? RX GS LS ES? Let us know how much you want before you sell. One of us might one to buy it as they are very reliable. The BMW looks nice but not as reliable.
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My Lexus is 2010 Gs 350. Just paid my insurance for the year today $709. Have a big insurance bill for 3 vehicles. The Lexus is the largest bill of the 3.
My husband says the same as you about the BMW. You guys never want beauty first. 
.
Good grief!! Looking back this is insurance for 6 months. Oct 10- Apr 10. Such a crime.
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Wow. Usually policies for geriatric old people (who drive less miles) and multi-vehicle policies are at much lower cost per vehicle.
Are there accidents on your driver history?
I’m in my 30s, and the policy for my one year old car is only around that for highest coverage levels and even full glass coverage…
No accidents! Bender is only 30 old. 
I guess I am geriatric. 
Could your policy be for a less expensive car, even though it is only one year old? I don’t know what state you reside, but everything in CA is higher.
I have Nationwide Insurance. Possibly look for cheaper insurance?
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30s is a range from 30-39.
It would be nice to go back to 30…
Msrp is a little lower (~$37) but PHEVs/EVs are still penalized with higher rates. And I didn’t look up the current value of your 10yr old lexus but I’d guess it’s lower.
My car is also made in Japan and very low volume / expensive repair costs. There are some interesting pictures of “totaled” brand new Honda Clarity vehicles on some of the owner forums. Basically a “fender bender” can potentially total the vehicle even if it just drove off the lot.
(Front windshield is $1-$2k to replace for example… not counting possibly a month of car rental before the part arrives). That’s why I went with the full glass coverage.
I have Amica, they paid out >$7k last year for a hit and run that totaled my first car under UI, but that’s not supposed to “count” to premiums.
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Wow, that is high. In WA, with Amica, I just got my 6 mo renewal. $357 for the '16 Miata, and $355 for the '15 CR-V. No accidents, no tickets. $1MM liability, $1k collision, $500 comprehensive, and underinsured/uninsured. We forego the PIP coverage as it pays for your medical expenses… and we have excellent medical coverage with plenty of cash in the HSA in case something happens.
I could probably save a few bucks with another company, but Amica did really well handling an uninsured driver rear-ending me at low speed a few years ago.
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Both of you have Amica, I’m going to check it out. We’ve been with Nationwide for multiple years.
Worth a check out.
But again, CA vs other states probably makes a difference. We live in Central/Northern CA, & I think our prices are less than Southern CA.
They’re not always the cheapest but they’re always top rated (them or USAA) for paying out and customer service.
Personal experience with a home damage appraisal (that I ended up not actually making a claim for) and the hit-and-run totaled vehicle.
I like that they use independent appraisers rather than “appraisers” employed by the insurance co. that would have a direct incentive to under-estimate damages.
It was also relatively easy for me to negotiate the totalled vehicle about 20% higher.
Generally it may make more sense to have at least a $1k deductible on auto. Suggest obtaining a quote with $0, 500, and $1k. For example, if it costs an extra $300 a year for a $500 deductible vs $1k then it makes no sense to go with $500 unless you expect to have incidents where deductible will apply at a rate higher than once every 1.6 years.
Otoh, if it only costs an extra $50 a year for $500 vs $1k deductible, then $500 deductible would likely make sense – you’d break even at one incident per 10 years. Somewhere in between and you can calculate the breakeven time very easily.
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