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Posted: Tue Feb 23, 2010 2:51 pm Post subject: Trade-in or Buy ?

I plan on buying a truck in the near future, am I better off trading in a vehicle in or just buying one outright? My current truck is for sale, it seems to be getting a lot of interest & should sell for whats its worth or maybe a little more.

I know we have an car salesmen or two in the group..... or current buyers I'm curious to hear your thoughts or experiences.

Thanks

Guide Dog Joined: 08 Nov 2003 Posts: 9204 Location: MN

I've always preferred the trade-in, cause I'm lazy.
if you feel like showing, and selling your car, letting people test drive it, dealing with transfer papers etc. then you'll get more money selling it your self, it will be a better deal for both you and the buyer.

The flip side of course is that you have to deal with all that crap, trade-in simple just let them look at it, they give you a dollar value, you give them the keys...

Time/financing is also a factor, if you have credit to get a low rate loan, and you are sure your truck will sell in a timely manner, take the loan, and throw what ever you get for your truck back into the loan right away to help kill the principle... if you aren't certain your truck will sell in a timely manner then you could be stuck paying more then you want...

it really comes down to what is going to make more sense for you, and how complicated selling your truck is in your state with transfers etc.

Posted: Tue Feb 23, 2010 5:07 pm Post subject:

The dealer will only give you the wholesale value of your trade-in.
It only makes sense to get the retail value if you have the luxury of time.

A friend of mine just traded in his 2009 Toyota Tacoma for the 2010 model - loaded.
Miraculously, his monthly payment is $100 lower, and there was no cash down.
There's gotta be a detail he forgot to tell me...

Guide Dog Joined: 08 Nov 2003 Posts: 9204 Location: MN

ThunderDawg wrote:
The dealer will only give you the wholesale value of your trade-in.
It only makes sense to get the retail value if you have the luxury of time.

A friend of mine just traded in his 2009 Toyota Tacoma for the 2010 model - loaded.
Miraculously, his monthly payment is $100 lower, and there was no cash down.
There's gotta be a detail he forgot to tell me...

it was the bullets he didn't "trade-in" while he was at the dealer...

Posted: Tue Feb 23, 2010 6:04 pm Post subject:

Take your vehicle to Carmax to see what they would give you for it...as long as you don't have 100K miles or more you should get close to the kbb.com value. At least that was the case when Heather had her Neon quoted when I took my eclipse there...

Posted: Tue Feb 23, 2010 7:14 pm Post subject:

Never ran into that before....It's smoking I rebuild it or drag it to the junk yard...Then look around for one that ain't smoking.

Posted: Tue Feb 23, 2010 7:57 pm Post subject:

If you give the dealer a chance to blur two separate transactions
together, you might get a good deal on one, but not the other.

A good salesman can make you happy about that.

Posted: Wed Feb 24, 2010 7:35 am Post subject:

This is pretty well covered already. If you can sell your truck privately, you'll be better off. It will sell for more than the trade-in value, and in my experience, dealership's are a little more willing to haggle when there is no trade-in involved.

The only time I go the trade in route is when I can't sell the vehicle privately.

Posted: Wed Feb 24, 2010 8:45 am Post subject:

I always settle on a cash price for a new vehicle first before talking about financing or trade ins. It's nice to have a base line to work off of. Granted, until I totaled my 2008 Honda Fit and didn't have enough saved for a new vehicle anyway, I usually paid cash for my vehicles because I hate paying interest for things, so it makes it easier.

A private sale might be better, but another option is to just donate the old vehicle to auction. A few years ago my Ford Ranger got hit by a tow truck, and it kept having problems after that the insurance company didn't think were related so I had to sink a lot of money into fixing things. Eventually, I needed to spend more in brake work (which I'll admit was unrelated to the tow truck) than the truck was worth, so I parked it at my in-laws and borrowed my wife's grandfather's car for the winter since it seemed a good way to keep him from driving and I'd rather buy a car in the Spring than the Winter.

So, after I bought my new car, the old truck had basically rusted over the winter after getting buried under 4 feet of snow, and wasn't drivable. The blue book on a good condition ranger was I think $800, it needed $1200 in brake work plus a new battery (minimum) and by donating it they came and towed it away and I didn't have to deal with anything other than clearing out the glove box. At auction, it sold for $1700, which made for a nice tax write-off. I'd have been lucky to get $400 for it, and didn't have to deal with moving it or spending the time trying to sell it, so I count myself ahead.

Of course, then I totaled my 2008 fit last November and had to replace it (I got a 2010 Fit). Between the insurance and our savings we had enough to cover all but a few grand of the car payment, but they were offering 0% financing so we financed most of the car and put the balance towards student loans (our highest interest debt right now.)

Posted: Wed Feb 24, 2010 10:10 am Post subject:

ThunderDawg wrote:
The dealer will only give you the wholesale value of your trade-in.
It only makes sense to get the retail value if you have the luxury of time.

A friend of mine just traded in his 2009 Toyota Tacoma for the 2010 model - loaded.
Miraculously, his monthly payment is $100 lower, and there was no cash down.
There's gotta be a detail he forgot to tell me...

Is the payment period still the same (does he have the same number of months left to pay as before)?

Posted: Wed Feb 24, 2010 6:00 pm Post subject:

gregw wrote:
ThunderDawg wrote:
The dealer will only give you the wholesale value of your trade-in.
It only makes sense to get the retail value if you have the luxury of time.

A friend of mine just traded in his 2009 Toyota Tacoma for the 2010 model - loaded.
Miraculously, his monthly payment is $100 lower, and there was no cash down.
There's gotta be a detail he forgot to tell me...

Is the payment period still the same (does he have the same number of months left to pay as before)?

that was gonna be my guess as well. they switched him from a 60 month loan to a 72 or 84 month note to keep the payments from going thru the roof.

Posted: Wed Feb 24, 2010 6:26 pm Post subject:

hummer010 wrote:
This is pretty well covered already. If you can sell your truck privately, you'll be better off. It will sell for more than the trade-in value, and in my experience, dealership's are a little more willing to haggle when there is no trade-in involved.

The only time I go the trade in route is when I can't sell the vehicle privately.

Tthe dealership is going to make their profit margin regardless of what tactics you use. If you finance thru them then they can count on their percentage of the finance charge to give them a profit even if the car is sold at (or below) cost, if instead you pay cash then they have to make the profits on the actual sale price of the car. if you trade something in then they can lowball the trade value to give them more room to negotiate on the sale price of the new car (alternately they may give you what seems like a ridiculously high trade-in value while not budging at all on the sticker price of the new car. If you don't have a trade-in AND are paying cash then you have taken away most of their ability to hide their profit margin so the dealer is not going to be willing to come down in price as much as they might otherwise. If you are trading in and financing thru the dealership then the "apparent" final sale price of the new car may SEEM to be much better but, in the end, they will probably end up with about the same profit margin.

as for trading in versus private sale... as has been noted already, you will definitely get more for a vehicle in a private sale, BUT... you have to do the work involved in advertising it, waiting for prospective customers to come along, making the sale, etc... trading the old car in gets you less money for it but the payoff is the ease and convenience of being able to take care of everything (getting rid of old car and getting new car) all at one time in one place. plus there is the potential tax savings to be had as well with a trade-in. the trade-in value of your old vehicle is subtracted from the sale price of the new purchase BEFORE taxes are calculated (unlike any cash down-payment you may have which would be subtracted AFTER taxes are added in) so, if for example, your old vehicle had a trade-in value of 20,000 and the new vehicle has a sale price of 35,000 then you would only have to pay taxes on the difference between the two(15,000 in this example) rather than on the whole 35,000. figure out how much that savings is and then take that into consideration when determining how much more you can sell your old car for in a private sale instead of a trade-in.

okay, i could probably go on for a while longer but, hopefully this will be enough to chew on for now. Smile

murf (former car sales-kitty)