QuestionI am looking at a clean, low milage (19,000) car at a local Buick dealer that is branded as a lemon law buyback. The dealer bought the car at a GM auction for his wife 1 year ago. How much below retail (% or $) should I expect to pay for this car? Does the reason for the buyback influence the value?
AnswerHey Jon,
Thanks for your question.
First I’m going to give you my opinion on what I would pay for this vehicle – and that’s nothing! I wouldn’t even begin to consider it for a few reasons:
1. Typically, cars that fall under the lemon law have multiple problems, and problems that have not been able to be satisfactorily fixed or repaired on multiple occasions. Just because the car was returned and ostensibly ‘fixed’, if it could have easily been fixed in the first place it wouldn’t have been deemed a lemon.
2. If this is the case, and if you have similar problems, you own them. In almost every case the car will be sold without a warranty; but even if it is that doesn’t mean the issues will be taken care of, or that the vehicle will not be in the shop a good part of the time with you out an insurance co-payment with every visit.
3. Dealer’s have but one goal in mind, and that’s to sell every car they have on the lot, by whatever means necessary. I have no way to know for sure, but I wouldn’t believe for a minute that the dealer knew this was a lemon and bought it for his wife to drive. They can have any car on the lot they want, and at cost, so this doesn’t make a lot of sense to me. Having been in the business, this smells very fishy to me. It also has the ring of the cliché “a little old women only drove it to church on Sunday’s.” Makes you feel much better about buying something like this. Granted, I may be wrong, but I’ve seen and heard way to many things like this from dealers to think that this is the real deal.
Ok, now that you know how I really feel, I’ll tell you that there is no actual dollar or percentage amount I can tell you to offer. But, if you have your heart set on this car, here’s an approach to follow.
Look up the recommended resale value on the internet at one of the many car sites. I use www.kbb.com for some of my research. Take what they say is the current market rate for this car and then subtract as much as you want based on what you want to pay for it, considering that you may have lot’s of problems during the time you own it. If the internet shows the market value at $20,000, offer $15,000, or even $10,000 citing the fact that the car was a lemon. Incidentally, this fact has to be noted on the title, which means that when you try to sell it, the new buyer will know it was a lemon and, of course, offer you much less that it would normally be worth. Same if a dealer takes it on trade.
I’ll tell you now that the dealer will try to sell the car at the same price as any other similar vehicle, or perhaps offer a very modest reduction. Maybe even a little more if they can get your financing and make thousands more on the deal. But now you have the chance to negotiate with them. Negotiating is normally a bad thing to do, but in this case it’s about your only hope. Almost certainly, they won’t budge much at all knowing full well that if you don’t buy it someone will probably do so very soon because it looks like a great deal on the surface.
I’m sorry that I can’t just throw a number out for you; I’d be making it up from nothing if I did, and I wouldn’t do that to you. Your bottom line is what you’re willing to pay when you consider all of the good and bad points. As you know, my recommendation is that you don’t buy it to begin with, but if you do, factor the potential problems in to your offer. If they don’t want to sell on your terms, there are literally thousands more vehicles out there for you to pick from, and they change nearly every week.
Thanks again for your questions, Jon. Although not what you asked for, I hope this does help you make your decisions.
Regards,
Ron
www.Make-Me-Smarter.com
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