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Posted by Sandy on December 21, 2007, 3:40 pm
> But, Sandy, think about it. Your trade-in is now an almost 1 yr. old USED
> machine. They cannot possibly resell your trade-in for the same price you
> paid for it. There HAS to be a HUGE built in profit margin on the new
> machine that is traded for to offset the 'loss' in selling your trade-in at
> much lower price than a brand new machine just like it.
I'm absolutely sure you're right, Leslie. But I'm going to have to pay
that original price, no matter what, unless I buy a used machine. When I
was buying, there were no used ones in the model I wanted, so .... At
least I *did* get all of my original purchase price towards the newer
one -- some companies have a huge mark-up and then don't give a
full-price trade in. I figure it was worth it, in my case. :)
>
> Say you bought your machine for $3K. Then you traded it in on a sm that
> sells for $5K within the year allowed for trading at full purchase price-
> you would turn in your machine plus $2K cash to buy the $5K new sm, right?
> They cannot possibly sell your trade-in for that $3K- what it sold for new.
> Somewhere they must take the loss on your trade-in.... they'll prolly sell
> it used for $2K. Where is that difference between the $3K (full purchase
> price) that they allowed you towards the new machine and the $2K they can
> resell your trade-in for? They certainly cannot take a $1K loss on every
> trade-in. It's called an 'over-allowance' in the auto business and that is
> deducted off the profit on the new one sold. And you can't do that unless
> you have a large profit margin to absorb that over-allowance/loss- of $1K in
> this example.
>
> I was horrified when buying the TOL Janome included a "free" $4K sewing
> table. There must be at least a $3-5K built-in profit margin on the TOL sm
> to 'give away' a sewing desk that they prolly pay $2K each to buy in
> quantity to turn around and 'give' it away with the TOL sm. Their $3-5
> built-in profit margin would be reduced by the $2K that Janome pays for the
> 'free' sewing desk- therefore, the dealer would 'only' make a profit of
> $1-3K on the TOL sm- reduced by the cost of the desk- just the same as an
> over-allowance on a trade-in.
>
> Everybody has to make a profit to stay in business. There's no free ride.
> Wish there was.....
>
> Leslie, The Former Accountant, Missy & The Furbabies in MO.
--
Sandy in Henderson, near Las Vegas
sw.foster1 (at) gmail (dot) com (remove/change the obvious)
http://www.sandymike.net
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