WOW. My 2008 trade-in is still sitting on showroom floor....

[HotRodZilla]

Two stories:

1st: The 2007 FJR I offered to buy in April 2007 sat at the dealership until August 2009. They had to sell it for less than what I offered them. I ultimately paid less than my Albuquerque offer for the FJR I bought in Colorado. Greed and stupidity at its finest.

2: in 2012, my wife and I decided we wanted a boat. I knew just the one. RnS Westside had a really nice 2008 Sea-Doo Challenger that had been sitting. The dealership had demo'd it at company outings, so it had 10 hours on it and had a prop replaced because of an "incident." I went in, loan approved, ready to buy. They hit me with new MSRP. I explained that it was a used 2008 and showed him the book value on my laptop. His jaw dropped, then told me that this had a full one year warranty still attached. He came to within about $1800 of what I was willing to pay. I relented and told him I'd half that with him, and they could consider the extra $900 the charge for the super 1 year warranty (sarcasm). He was all for it, but the manager balked. I suggested they call the owner since I was willing to take a 4 year old used boat off their hands for a thousand over book; he refused, I walked away and bought a Yamaha VXR 1800 jetski from the crate. Free 5 year Y.E.S...WooHoo.

Last year, they sent that boat back to Polaris because they couldn't sell it and Polaris is out of the boat business.

Dayum...Dummies.

 

[chazglenn3]

They also are trying to sell a 2007 for $7000.

 

[zamField]

Does seem high, especially as I just picked up a 13 with <5000 miles for $10500.

 

[Saddletramp]

When dealers take in a trade it's always challenge to give the person trading in a good deal while getting it cheap enough to be able to re-sale it. I know because of my occupation as a John Deere salesman. Farmers are an independent lot by nature & not always easy to negotiate with. At times, we have to dump a piece for much less than we have into it - but dead inventory has broke many a dealership. I don't think motorcycle dealers & riders differ much.

On the other hand, I'm always amazed at what some people will pay for an item at a public auction. Maybe some of these bike dealers should get together & have a big liquidation auction.

I bought my 2008 FJR last fall & probably paid a bit over book price. I knew the dealer was reputable, contacted the previous owner (Silver bullet I believe), & thought the bike was exceptionally clean. So far I'm very happy with it.

 

[cgreen]

I have seen there for awhile, It's hard to believe that it's been two years. Didn't you have it listed on Craiglist for a while back then??

 

[stealth1]

I guess if it was easy to make a profit as a motorcycle dealer there wouldn't have been so many go out of business the last 7 years.

 

[SouthernCruizer]

I have seen there for awhile, It's hard to believe that it's been two years. Didn't you have it listed on Craiglist for a while back then??

no, never listed it. I actually didn't think I would be getting rid of it, but when I got to the dealership and saw they had it ready to test ride, I couldn't resist the deal they offered me.

 

[bigjohnsd]

I guess if it was easy to make a profit as a motorcycle dealer there wouldn't have been so many go out of business the last 7 years.

That is the absolute truth.

A purely Motorcycle Dealer, one with no ATVs or other lines to bolster his business has had a tough row to hoe the past 7 years.

I'm fortunate to have gotten out of the business at the peak.

There are many reasons the bike remains on the floor, stubbornness being the most probable significant factor.

In both the car and bike business well run dealerships examine their used inventory at the end of each mont and write down the "cost" of the pieces that are on the books at too high of a value. The write down is posted against the cost of goods sold and decreases the operating profit for the current month, but,you have a chance to sell the bike at a realistic price and make a profit when you sell it the next month.

Not adjusting I ventory value is lying to yourself, you've already lost the money, its just a matter of when you realize the loss.

 

[palerider]

Two stories:
1st: The 2007 FJR I offered to buy in April 2007 sat at the dealership until August 2009. They had to sell it for less than what I offered them. I ultimately paid less than my Albuquerque offer for the FJR I bought in Colorado. Greed and stupidity at its finest.

2: in 2012, my wife and I decided we wanted a boat. I knew just the one. RnS Westside had a really nice 2008 Sea-Doo Challenger that had been sitting. The dealership had demo'd it at company outings, so it had 10 hours on it and had a prop replaced because of an "incident." I went in, loan approved, ready to buy. They hit me with new MSRP. I explained that it was a used 2008 and showed him the book value on my laptop. His jaw dropped, then told me that this had a full one year warranty still attached. He came to within about $1800 of what I was willing to pay. I relented and told him I'd half that with him, and they could consider the extra $900 the charge for the super 1 year warranty (sarcasm). He was all for it, but the manager balked. I suggested they call the owner since I was willing to take a 4 year old used boat off their hands for a thousand over book; he refused, I walked away and bought a Yamaha VXR 1800 jetski from the crate. Free 5 year Y.E.S...WooHoo.

Last year, they sent that boat back to Polaris because they couldn't sell it and Polaris is out of the boat business.

Dayum...Dummies.

Whenever I hear stories like these goofy-dealer tales, I think about people who ask, "Why can't they run the government like a private enterprise?" I always respond, "You better hope they never do."

 

[ionbeam]

A message from the admins above ---->

Whenever I hear stories like these goofy-dealer tales, I think about people who ask, "Why can't they run the government like a private enterprise?" I always respond, "You better hope they never do."

Follow the line to palerider's computer. :lol:

 

[audiowize]

Not adjusting inventory value is lying to yourself, you've already lost the money, its just a matter of when you realize the loss.

Why do almost no dealers understand this?

The one that kills me is when you see a used bike at a dealership, and it's 2x the price of the same bike (maybe in better condition) available widely on Craigslist. Who is supposed to buy these used bikes?

 

[escapefjrtist]

Not adjusting inventory value is lying to yourself, you've already lost the money, its just a matter of when you realize the loss.

Why do almost no dealers understand this?

The one that kills me is when you see a used bike at a dealership, and it's 2x the price of the same bike (maybe in better condition) available widely on Craigslist. Who is supposed to buy these used bikes?

One possible explanation is those folks who don't have ca$$h and can't get financing anywhere else. Although I know nothing about it, the financing piece of selling vehicles must bring in extra dealer $$$ in the form of higher interest rates and finders fees from the various lenders...

--G

 

[bigjohnsd]

Not adjusting inventory value is lying to yourself, you've already lost the money, its just a matter of when you realize the loss.

Why do almost no dealers understand this?

The one that kills me is when you see a used bike at a dealership, and it's 2x the price of the same bike (maybe in better condition) available widely on Craigslist. Who is supposed to buy these used bikes?

One possible explanation is those folks who don't have ca$$h and can't get financing anywhere else. Although I know nothing about it, the financing piece of selling vehicles must bring in extra dealer $$$ in the form of higher interest rates and finders fees from the various lenders...

--G

Music to a dealers ears is "I'll buy it, IF you can get me financed!

But, to get it financed the bike still has to be priced somewhere near the Retail Blue Book, NADA or Black Book values.

 

[HotRodZilla]

When I was selling cars, we loved finance deals. We were paid a percentage of the profit. So if I sold a car for $1k over the dealer's invoice, I got $250. BUT...If that person financed their car through Ford Credit, I got another check for $600 minimum. The more financed, the better the check. We called that, "getting paid on the back-end."

 

[bigjohnsd]

When I was selling cars, we loved finance deals. We were paid a percentage of the profit. So if I sold a car for $1k over the dealer's invoice, I got $250. BUT...If that person financed their car through Ford Credit, I got another check for $600 minimum. The more financed, the better the check. We called that, "getting paid on the back-end."

Zilla,

The "Back End" provides more profit in the average new car deal than the "Front

End" today.

In the Power sports business the Front End still provides the most profit, some dealers have learned from their four wheeled brethren and have developed their back end sales. In addition to making a % on the financing most do it by using a Menu Presentation System to ensure every customer is offered a chance to purchase each and every back end product. Things being offered include Extended Warranty, Lifetime Service and/or Prepaid Maintenance, Credit Life and Disability Insurance, GAP Protection, Tire Insurance, Theft Protection and in some states even Insurance. The facts or statistics show that if you offer the products to be very customer a little more than 33% will buy, maybe not every product but some do. Especially the "Get Me Dones", those with marginal credit that are so glad you helped them they will buy any and everything an unscrupulous Finance Manager puts in front of them.

 

[Gurock]

bigjohnsd knows and he's right. I've been involved in every part of the car business as their attorney for the last thirty years and his descriptions are spot on! Long ago I represented an Oldsmobile dealer that had financing for the purchase of the dealer through GM (Motors Holdings) and also GM did their floor planning. One of GM's rules was that used cars had to be sold within 60 days of acquisition. So the dealer knew that if they didn't sell it by day 50 it was going to the auction the next week.

I bought my 08 FJR AE in October with 5,400 miles for $5,000.00. Why would someone pay this kind of money for one with 88,000 miles?

 

[jmdaniel]

Two stories:
1st: The 2007 FJR I offered to buy in April 2007 sat at the dealership until August 2009. They had to sell it for less than what I offered them. I ultimately paid less than my Albuquerque offer for the FJR I bought in Colorado. Greed and stupidity at its finest.

2: in 2012, my wife and I decided we wanted a boat. I knew just the one. RnS Westside had a really nice 2008 Sea-Doo Challenger that had been sitting. The dealership had demo'd it at company outings, so it had 10 hours on it and had a prop replaced because of an "incident." I went in, loan approved, ready to buy. They hit me with new MSRP. I explained that it was a used 2008 and showed him the book value on my laptop. His jaw dropped, then told me that this had a full one year warranty still attached. He came to within about $1800 of what I was willing to pay. I relented and told him I'd half that with him, and they could consider the extra $900 the charge for the super 1 year warranty (sarcasm). He was all for it, but the manager balked. I suggested they call the owner since I was willing to take a 4 year old used boat off their hands for a thousand over book; he refused, I walked away and bought a Yamaha VXR 1800 jetski from the crate. Free 5 year Y.E.S...WooHoo.

Last year, they sent that boat back to Polaris because they couldn't sell it and Polaris is out of the boat business.

Dayum...Dummies.

Polaris was never in the "boat" business; they used to sell personal watercraft. Sea-Doo is a brand of Bombardier Recreational Products.

 

[audiowize]

Yeah, now that you mention it, the disappearance of bike dealerships ca 2009 makes a lot more sense. Not too long after that time period, the s/o and I bought our first house, both had full time jobs, and both had mid 700's credit scores. I rolled into the local Yamaha dealership to buy an FZ-6R, and though I had really good credit, they couldn't actually find me any financing. I ended up piling up the cash in the following few months and paying cash for a different bike on Craigslist. Since that time, the dealership went belly up

 

[Happytrails63]

So many interesting stories. Explains why my local Yamaha/Kawasaki dealer has had the same bikes on the showroom floor for 3yrs now. I just figured they sold a bunch of ATVs to stay in business. Everytime I go in for an inspection they try to get me interested. But there salesman just aren't very good. Could be a part of why they haven't moved any bikes in awhile. Struck me odd that they had ZX14's and Concours but never an FJR.

 

[Fred W]

There are several guys in the northeast who have figured out a way to help the dealerships, and make a good living on their own, because of the difficulty of selling used trade-in bikes. I have done a lot of business with one of them (bought three different bikes from him) as he is a straight shooter, and provides thoroughly sorted, clean used bike for only a bit over a private party sale. He is an ex road-racer that either couldn't quite cut on the track, or decided to settle down when he started having kids. In any case, he already knew a lot of motorcycle folks in the region.

His business model is that he has gone to all of the local dealerships and told them that he will buy bikes they have taken in on trade, if it is for a good price (somewhere below wholesale). What's in it for him is a steady supply of nice used bikes at a great price. He has an entire team of mechanics and detailers that primp them up for resale and then they display the bikes with professional photographs on a turntable and market via eBay, Craigs List, and their own web site. On their web site and in person at the Concord, NH shop they have a no haggle policy. Every bike has a tag on it. Take it or leave it.

What's in it for the new bike dealerships is they get to immediately free up their capital and floor space, to allow them to have more new bikes on display. The dealers want to sell new because there is more margin in it for them. Used bikes, like Jays, sit. That is money that is depreciating every day it sits there.

But they also can't allow huge, inflated values on the trade-ins, unless they are already planning on taking that hit from the new sale. It seems to be working out pretty well and there are a couple of copycats around that seem to be doing the same thing on a smaller scale.