Saturday, Sep 12, 2015 at 13:29
Dex, an experienced car salesman told me many years ago, that a figure of $10,000 was the psychological "killing point" for many sales.
His rationale was that a loan of $10,000 was the limit for many buyers (who had lots of other committments) - and if a car was for sale aat $11,000, it would kill the deal.
I think that magic 5 figure sum is probably a figure that can be adjusted up for today's values - but $15,000 to $20,000 is still a major limit area for many used car buyers.
When a used vehicle gets over $20,000 (unless it was a particularly highly priced vehicle to start with), then many people will start to look at a smaller new vehicle.
The new vehicle comes with a sizeable warranty and finance is usually easier to get on a new vehicle.
In fact, ability to get finance is usually the sticking point in any sale.
For this reason, most car yards and dealers will not touch vehicles over 12 yrs old. It's nearly impossible to finance them.
Finance houses see vehicles older than 12 yrs as a liability they can't sell, if they get repossessed.
So on that basis, the newer your vehicle, the better the chance the potential buyer has of getting finance on it.
There are very few people who have the "readies" to pay the full amount in cash or bank transfer for a vehicle over $20,000.
They nearly all need to finance the whole amount or a sizeable portion of it.
Thus, the auction house idea works better when you need to part with a vehicle, as they will take care of the finance angle and you don't end up with buyer after buyer saying, "Oh, darn, I love your car, and I really want it - but I can't get finance on it!".
Cheers, Ron.
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