Tuesday, August 17, 2010
Considering Buying A New Hail Damaged Car? Think again!
Hail damaged vehicle repair cost can range from several hundreds to tens of thousands, depending upon the type of vehicle and the extent of damages. Dealerships have the upper hand in almost every instance when selling these "Hell Sale" vehicles. Allow me to enlighten you, The Dealer has a brand new ( hail damaged) vehicle, lets say the MSRP is $35,000.00 and he offers to sell you the vehicle for $30,000. Thats a 5,000 discount and a "Great deal right"...Wrong! Okay, lets start with what happens just after a dealership is hit by a hail storm. The Dealer calls his insurance company. Insurance company estimates the cost of repairs at lets just say $8,000 . Subtract the typical dealership deductible (1,000). Thats right, from the start the dealer has an 7,000 check in his back pocket. If he sells you the vehicle for 30,000 and he has a 7,000 check in his back pocket, he has just sold you a hail car for, Yep, you got it, $2,000 over MSRP. The Numbers do not lie, Unfortunately some dealers do. New vehicles also have markup ( Dealer Profit) and a dirty little word called "dealer hold back", all cleverly built right into the invoice just in case you are savy enough to negotiate to see it. Most of this profit you readily see on the invoice, but some is hidden from you in the form of "dealer hold back"."Dealer hold back" is a certain amount of the invoice price which is paid to the dealer directly from the manufacturer, if the dealership achieves a certain volume of sales and also maintains an acceptable customer satisfaction index. Usually paid to the dealer on a quarterly basis." Dealer hold back" is different on every vehicle unless the options and equipment are identical. The above described deal is considered a grand slam in the car business. Remember, you still may want to get this car repaired . Average markup on a new vehicle in that price range can be 3,000 - 5500 or more depending on the MSRP. But don't forget about the $7,000 worth of hail damage to the vehicle which is most likely a low-ball initial estimate of the damages from the insurance company. The actual cost of repairs could be a great deal more. If your are considering buying a hail car from a dealer a good "starting point' for negotiation for the example above would be atleast double what they where giving you off in the first place. . This deal would make sense if the dealer kindly handed over the $7,000 check and then started discounting the vehicle, Because he still has on average 4,000 in mark up and 500 to 1,200 in "dealer hold back". The dealer should be happy just to move this car off his lot and not take a loss. Example: insurance check 7,000 + Mark up 4,000 + Hold Back 750.00 = 11,750. I would say in the above example you should get at least a 10,000 - 11,750 discount for this deal to make sense. Why should any dealer make a huge profit selling damaged goods. Note: If you plan to get this vehicle repaired the initial insurance estimate may have been on the low side and the actual cost of repairing the vehicle may be higher. An insurance company claims adjusters job is to satisfy a claim at the lowest price point. Any after appraising the dealers entire lot he/she maybe off on the estimate of damages.Also remember the dealership has a deductible on his inventory also which is usually 1,000 on average. As a convenience to you and because we don't want fellow Austinites getting ripped off. We would love to look the vehicle over for you and give you a true estimate of the actual cost of the damages so that you can make an informed decision before you spend your hard earned dollars. Just give us a call at (512) 257-8306 and bring the vehicle to King of the Ding at 12307 Roxie Drive Austin, TX. 78729. Good luck, we hope you find this information useful. Read this Yelp Review! He was almost "Hail Sale" Victim.