There are some mistakes that just happen again and again when it comes to used car acquisition. One example being paying too much for a bad vehicle, either as a trade or maybe at the auction, then deciding to double down on that mistake by investing thousands more in reconditioning and trying to sell your way out of it.
First of all, for all you non-gamblers out there, the term double down relates the practice of doubling up on a bet to try and recover your losses. Either getting your money back or losing more. Common sense types might call it, “Throwing good money after bad”. I like to gamble, so I prefer the term “double down!”
The term double down relates the practice of doubling up on a bet to try and recover your losses.
Tell me if this scenario sounds familiar. Your sales manager decides for some reason to pay too much for a car. Now this can happen for a number of reasons. Maybe they were desperate for a deal on a slow day so they paid up for a trade. Maybe the trade was on a vehicle that really needed to move. Perhaps the trade in was parked too many steps from the door so the manager decided to do the appraisal from the office; the “ESP” method. There are a bunch of potential reasons, but they generally boil down to laziness, desperation or incompetence.
I remember one time working in a Ford store as a salesperson when the Used Car Manager made a huge mistake. A client was trading in a used Ford Taurus SHO. Loaded. Red. Low mileage. Beauty car. This manager was the classic old school used car guy. Smoked a ton. Drank a ton. Tough guy. Nice guy. He walks around this car in the dark while he’s smoking. Nice car, no need to drive it. The two-minute appraisal. Now this is in the days before online vehicle history reports; it was buyer beware for the most part.
The car comes in on trade, goes into the shop and we find out the car's a wreck. Rebuilt. Couldn’t even do a proper alignment. A complete piece of garbage. So the manager, knowing he screwed up, then decides to throw a bunch more money at it and retail his way out of it. Now, not only had he overpaid for the vehicle by thousands, but he also just spent thousands more putting lipstick on that pig. Doubling down on his original mistake. In the daylight, the vehicle did not show well. So, the car sat, and sat. The worst kind of aged inventory, the kind born of bad judgement piled on top of more bad judgement. Instead of just taking his lumps and dumping the unit and taking a smaller loss in the beginning, he decided to double down with the dealer’s money so he wouldn’t look bad or take a hit to his bonus. Wasting money, creating an aged inventory issue, and hanging on to unsellable inventory.
Not only had he overpaid for the vehicle by thousands, but he also just spent thousands more putting lipstick on that pig.
Now the funny thing is, once the dealer principal got wind of it, he made the used car manager drive the vehicle as his demo until he could retail his way out of it, which of course he would never be able to do. Just hilarious really. This old school tough guy used car manager having to drive this piece of crap car that looked like it was put together with glue and painted with a roller.
Funny thing was, he did manage to get rid of it. He got so angry one day, he took the vehicle up to the next streetlight from the dealership and made a left turn right in front of a truck. Write off. Problem solved.
So the next time you make that mistake of overpaying for a bad or rough car, either as a trade, or a simple acquisition, don’t make the mistake of doubling down and spending thousands more trying to make it a nice car. Cut your losses and dump it, or you may wind up investing thousands on an unsellable car and have to lose a fortune to get rid of it… or drive it into oncoming traffic. Your choice. Good luck and good selling.