# Is Galves a Scam?



## xspeedy (Apr 10, 2003)

*Is Galves Worth Anything?*

I bought a day worth of subscription, and I was just playing with it to see what an optimal configuration for a vehicle might be to minimize the pain at trade in. Personally, I think Galves is a waste. I was working with a 2004 BMW 325i and 330i with 12,000 miles.

For example, there is no option for adding the premium package to the 325i, yet there is one for the 330i. Also, adding leather to the 325i gains you $500, but not having it on the 330i loses you $700? Perhaps this reflects the fact that leather is expected in the 330i, and is a bonus (but not as much) in the 325i :dunno:

If you build a 330i, having the premium package only gets you back $600. Having the cheaper sports package gets you back $800. If the sports package is truly appreciated more by the public, then why don't dealers spec out new cars for stock with the sports package and nix the premium package? It is appreciated more, and the swap would reduce the sticker price.

Not having a moonroof loses you a whopping $1400. Yet the other options (the ones lucky enough to show up in Galves) only return a fraction of what they cost. On the 325i, the power seats (or as part of the ZPP) don't get you anything? I would expect that most people expect this as a bare minimum in a BMW. It should be up there with moonroof in terms of desirability.

Galves doesn't care if you bought an Orange car or a Silver one? The base price differential between a year old 325i and 330i is only $3500? That differential when new is more like $6000. Why isn't the change in difference in proportion to the depreciation of the 325i? I heard the returns are supposed to be the same for both cars.

So my conclusion is that if we live by Galves, the best return is a stripper 325i with a moonroof (included as standard today). An Automatic doesn't hurt too badly. We keep the rubber interior and the manual seats. I'd like to know if such a stripper is a hot seller. Certainly, the new cars for stock aren't configured this way. Most have leather and ZPP as a minimum.

*For the 325i:*

Base Price: @ 11,000 miles 24,800
Mileage: 12,000

..:: ADDS & DEDUCTS

ADD: LEATHER + 500
ADD: NAVIGATION + 1,000
ADD: SPORT (INCL'S 17" WHEELS) + 600
DED: W/O AT (-) 800
DED: W/O MOON ROOF (POWER) (-) 1,400
As Equipped Price 24,700
Mileage Adjustment -250

GALVES VALUE 24,450

*For the 330i:*

Base Price: @ 11,000 miles 28,300
Mileage: 12,000

..:: ADDS & DEDUCTS

ADD: NAVIGATION + 1,000
ADD: PREMIUM (WOOD TRIM+) + 600
ADD: SPORT (SPORT SEATS +) + 800
DED: W/O AT (-) 800
DED: W/O LEATHER (-) 700
DED: W/O MOON ROOF (POWER) (-) 1,400
As Equipped Price 27,800
Mileage Adjustment -275

GALVES VALUE 27,525


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## jw (Dec 21, 2001)

xspeedy said:


> I was just playing with it to see what an optimal configuration for a vehicle might be to minimize the pain at trade in.


Lease.


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## Pinecone (Apr 3, 2002)

If you trade you are just bending over and taking it. The dealer has to take the car, check it out (costs them money in mechanics time), clean it up (money on lot man time), keep it on the lot (moeny tied up in inventory AND lot space), then sell it (money in sales commision), and of course, they need to make a profit (money)

Sell it on the open market. You take the all the money that it costs the dealer to sell the car. Maybe not all, but you will almost always get more for the car than for trade in.

As for optimizing the trade or resale, you can only estimate. And what something costs new (car or options) doesn't have any real bearing on what you can get for it later. If you take your "perfect" car into trade to a dealer who has a bunch of similar cars on the lot, your trade isn't worth anything to him. You take the "worst" combo car to a dealer who is cranking out used cars for whatever reason, you car may be worht a lot more to them.


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## jw (Dec 21, 2001)

Pinecone said:


> If you trade you are just bending over and taking it.


 :rofl:


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## xspeedy (Apr 10, 2003)

I know trading is normally not the best option, but the last time I traded a one-year old 330i, I didn't fare too badly considering I did an ED. But I doubt the dealer used Galves. 

The consistency of what Galves adds value for is really poor. Sometimes, CWP adds value. Sometimes power seats does, and sometimes it doesn't. Power seats doesn't add any value to the 325i, but for the X3 2.5, it does.

It is just crazy to think that all the other stuff that we consider valuable adds nothing when it comes to trading it. It makes no sense at all. As I said before, per Galves, the used car market wants a stripper 325i with a sunroof, and maybe a step.


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## jw (Dec 21, 2001)

xspeedy said:


> I know trading is normally not the best option, but the last time I traded a one-year old 330i, I didn't fare too badly considering I did an ED. But I doubt the dealer used Galves.
> 
> The consistency of what Galves adds value for is really poor. Sometimes, CWP adds value. Sometimes power seats does, and sometimes it doesn't. Power seats doesn't add any value to the 325i, but for the X3 2.5, it does.
> 
> It is just crazy to think that all the other stuff that we consider valuable adds nothing when it comes to trading it. It makes no sense at all. As I said before, per Galves, the used car market wants a stripper 325i with a sunroof, and maybe a step.


I think the only reason you fared well was because of your up-front discounts through ED. As for dealerships appraising cars, most of them tell me to take it to Carmax. They'll match whatever they offer. And actually, I would prefer not to have a dealership who is trying to sell me a car offer me trade-in for the one I've got. They'll just use it as one more line item to tweak to get the most profit margin on the deal. Reduce the number of tweaking factors and you can talk a straight deal.


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## SARAFIL (Feb 19, 2003)

xspeedy said:


> I know trading is normally not the best option, but the last time I traded a one-year old 330i, I didn't fare too badly considering I did an ED. But I doubt the dealer used Galves.
> 
> The consistency of what Galves adds value for is really poor. Sometimes, CWP adds value. Sometimes power seats does, and sometimes it doesn't. Power seats doesn't add any value to the 325i, but for the X3 2.5, it does.
> 
> It is just crazy to think that all the other stuff that we consider valuable adds nothing when it comes to trading it. It makes no sense at all. As I said before, per Galves, the used car market wants a stripper 325i with a sunroof, and maybe a step.


Think about it another way-- people are willing to pay a lot of money for the badge (entrance into the BMW ownership ranks), and at that point, anything extra has a lower marginal value to them. The big thing is just getting the BMW roundel on the hood of their car.

I think your complaints about Galves are unwarranted. The stuff you point out is true-- this IS how the wholesale market values different option specifications on these cars. Look at the 2004 Premium Package on the 325i-- the only significant items are wood trim and moonroof, from a resale point. There is a (strong) deduct on a lack of moonroof. Also, on the earlier models (2001, 2002, 2003), they do have an "add" for Premium Package. Their data is based on what is happening in the marketplace-- they analyze auction data from around the country to see how the values differ based on mileage and options. As for color, there is no way to adjust for that numerically. It's all on a case by case basis-- my dealer does terribly with Green, White and Steel Blue cars. We do great with Black, Silver, Grey, Orient Blue, etc. When evaluating a car, we know what works **for us**, and we adjust accordingly. The other dealer might have great success with those colors that suck for us, so they treat them differently.

One last note-- don't try to explain things with ratios and proportions, you'll drive yourself crazy trying to do so. Just because an option cost $X more a year ago doesn't mean it should be worth more today, or even worth X% difference from another option. Same goes for different models-- just because there was a X% base price differential a few years ago doesn't mean that will remain over time. Your results indicate why I've always viewed a basic 325i (moonroof, and maybe auto if you want it) as the best E46 in terms of percentage of value retention.

Our dealer has 10 highline franchises plus a large used car store. We sell hundreds and hundreds of cars every month. Therefore, we take in ALOT of trades. Galves is our primary and most reliable guide for valuing used cars. I assure you that our years of use on over thousands of cars is probably a better testament to its reliability than your one day trial. And, when we're looking at a wierd car with a hard-to-determine value, can you call Mr. KBB or Mr. Nada or Mr. Edmunds? I know that I can personally call Mr. Galves-- I've done so in the past.


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## SARAFIL (Feb 19, 2003)

One thing I forgot to address:



xspeedy said:


> I'd like to know if such a stripper is a hot seller. Certainly, the new cars for stock aren't configured this way. Most have leather and ZPP as a minimum.


Yes, the "stripper" is a hot seller.

We order our 325 models in basically three ways:

1. Leatherette, Moonroof (now std. for 2005, 2006), Heated Seats. About 60% with Auto, and 40% Manual. About 30% with the Power Front Seats. That's it-- alot of basic cars. These account for about 60% of the cars in our stock.

2. Leatherette, Premium Package, Heated Seats or Cold Weather Package. About 75% with Auto. About 15% of our stock.

3. Leather, Premium Package, Cold Weather Package, about 90% of these cars are Automatic. These comprise about 20% of our stock.

The remaining small percentage include stuff like Sport Package. Every once in a while to change things up, we order Xenons or HK on some of those cars in category 2 and 3. (But never both on one car-- it raises the price too much).


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## jpsquared (Mar 27, 2005)

Hey everyone - New poster here... Looking to purchase an E90 in a few months.

I used Galves to value my '02 Pathfinder recently for a trade-in, and the Volvo dealer actually gave me $500 more towards my XC90 than the Galves price. That's not bad considering "bending over" by not selling privately. Most of us would agree that sometimes the convenience of just trading in is a lot better than dealing with the no-shows, incorrect paperwork, DMV, etc... 

IMHO, Galves probably works better for pricing out mid-range vehicles that have fewer intangibles. I'd be willing to bet the Galves price on a puke-green 4-yr. old Honda Accord is more accurate (less subjective) than a 2 yr. old imola red E46 ZHP with a huge wow factor. 

Just my .02...


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## xspeedy (Apr 10, 2003)

Fillip,

Let me ask you this. Does a base 330i depreciate at an equal percentage rate to a base 325i? If you want many of those things that are standard on a 330i, but optional on a 325i (xenons, power seats, premium sound), does it make more sense to get a 330i to avoid getting zero value for these items on a 325? 

From what I'm seeing, the 330i seems to take a bigger hit. Am I wrong?


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## mdbmw (Mar 23, 2005)

My opinion growing up around Dealerships. Galves, kbb, nada mean very little. To get the best price for your car sell it yourself or negotiate the best deal possible on the new car (without a trade) and then ask them how much they will give you for your car if you trade it in. Sometime the tax bennifits & convenience make up the difference. I see way to many people think they are getting a great price for there trade but really they are just discounting the one your buying. 

I just bought a x5 4.6 $6000 under wholesale - I can find them all day long priced this way from dealer's - do you think they paid wholesale for it & are taking a loss? (c;


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## SARAFIL (Feb 19, 2003)

xspeedy said:


> Fillip,
> 
> Let me ask you this. Does a base 330i depreciate at an equal percentage rate to a base 325i? If you want many of those things that are standard on a 330i, but optional on a 325i (xenons, power seats, premium sound), does it make more sense to get a 330i to avoid getting zero value for these items on a 325?
> 
> From what I'm seeing, the 330i seems to take a bigger hit. Am I wrong?


A 330 will always depreciate more on a percentage basis than a 325. Just think about it for a second. The car has a certain amount of value just because it is a BMW-- even the most basic BMW retains a good amount of value for having the roundel on the hood. It then has more value for being a 3 series sedan, coupe, convertible, 5 series, etc. (whatever model it is). At that point, it only has marginally more value for being the version with the bigger engine, or with a certain option package.

It might be hard to understand because the 3-series is the entry level model. Look at the 5 series instead to better understand what is happening. The car has a certain amount of value because it is a BMW. On top of that, it has a certain amount of value that people associate with it being a 5 series. Beyond that, people add less value to it because it is a 530 vs. a 525 than they would because it is a 5er vs. a 3er, or a BMW vs. a Volkswagen. That is why a 525 will hold the most of its original value over time (compared to other 5ers), because it satisfies that large group that is just looking for a "BMW" and the other group that is just looking for a "BMW 5-series". There is a smaller group that adds extra value to it for being a 525 vs. a 530. To a large group of potential buyers, they don't see the used 530 as a car being worth $5000 more (or pick any value here that you want to use) just because it has some more power. In that case, the cheaper 525 serves their purpose just as well.


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