Prepping a Vehicle for Sale at a Dealership – Consumable Parts
I may have mentioned before, my dad was a gear head. He loved cars, and he’d get a new one every 2 or 3 years. I loved it when he’d take me car shopping with him. When I was about 12, I remember going to the grocery store to grab the most recent copy of the Kelley Blue Book. It was a physical book back then, not a website, and (as you might have guessed) the cover was blue. That was a long time ago, and things have changed. Kelley Blue Book is completely web-based now. More than that, I don’t know a single dealership that uses it for their vehicle valuations. Black Book and NADA guides seem to have taken the place of Kelley Blue Book amongst car dealerships. Unfortunately for dealerships, many consumers still do turn to Kelley Blue Book to know what to pay for a vehicle and they refuse to pay more. This is especially painful when the Blue Book value is low compared to other appraisal guides.
So how does a dealer compete with that? Condition. Condition is everything. In fact, both Kelley Blue Book and NADA assume that if a car is for sale at a dealership, it is in near perfect condition (think I’m kidding? see the pictures.) We’ve already had an article giving an overview of prepping a car for sale. Today let’s get down to specifics. Let’s talk about consumable parts today, using a 2006 Mazda Miata as an example. According to Kelley Blue Book, there’s a $1400 difference between a fair condition car, and an excellent condition car.
People looking at cars often say they are “kicking the tires”. Tires are a pretty big indicator of the condition of a car, and one that customers often look at first thing. Tires that are at less than 50% ought to be replaced to be considered in good or excellent condition. According to tirerack.com, tires for this car start at less than $300 (And remember, dealerships can often get discounts at local shops for giving them a lot of business, so it could be even cheaper). For the sake of this argument, let’s say these tires are $400 installed. Also remember, if the tires coming off still have some life left, many tire shops will buy the old tires back from you, saving you even more.
On this same car, a brake job for all 4 brakes is around $200. We’re at $600 total spending if the both the tires and all 4 brakes need replacing. Again, according to Kelley Blue Book, brake pads should have at least 50% of their pads left to be in good or excellent condition. And again, for the sake of this argument, we’ll say all 4 pads need to be replaced, when more often than not, only the front pads need to be replaced if at all.
The third and final consumable part we’ll talk about today is the battery. It’s pretty easy to open the hood up and see if it’s an older battery in the vehicle. If it is, replace it. There’s not as much of a hard fast rule in valuation with batteries as there is with tires or brakes, but here’s one: if it looks old, replace it. If there is oxidation, corrosion, leakage, etc. Buy a new battery. In the case of this Miata, a battery is $100 and any dealer ought to be able to replace it themselves.
Ok, with these three major consumable factors, we’d spend $700 in reconditioning a vehicle to gain up to double that, $1400, in value. There are other consumables that should be paid attention to, but aren’t as pertinent as the three above. Air filters, spark plugs, hoses, etc. should all be looked at before selling at a dealership.
All this is to say that while there are flaws with many of the popular consumer pricing tools out there, you can still make a healthy profit on your vehicle by making sure your condition is up to par with what customers are expecting from these tools. As an added bonus, if a customer is comparing 2 vehicles, one with new tires and brakes, and one without, which one do you think they will pick? And imagine being able to put “brand new tires and brakes” on all of your ads. These are huge selling points that will pay dividends in the end.