Trade-in vs sell

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Jacob Dryer

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I have personally never traded in a vehicle. Are the kbb/nada trade in values pretty accurate with what you actually get or is it way off base?



I know I should get more by privately selling just trying to weigh the time/price benefit.
 
Dealers scream up and down that they can't make money if they give you trade in, at least the ones I deal with. Just go in knowing what it's worth on trade, use edmunds.com, kbb, and nada and take the average of the three. Be honest with yourself on the condition, and if they don't agree with it make them prove it. Normal maintenance issues are reflected in the price of your vehicle. If you're informed you won't get screwed.
 
Both will give you an idea of what the vehicle is worth as a trade in based on their data base. The figures should account for the area of the country based on zip code, and it does vary some, as some vehicles are more popular in some areas of the country while not as popular in others (4x4 up north vs 2wd up north). Use both kbb & nada and you will get an idea of what the vehicle is worth, but the dealer won't offer you that, the trade in value can be negoitated (sp) as well. I haven't traded in many myself, but this past May I traded in my wifes car for another car, and I was able to get them to come up on the trade in value just by saying it wasn't enough. They asked me how much it would take, and I stated the value I thought it was worth. We agreed on the trade in value, THEN we started on their asking price on their vehicle, which they came off of as well.



In my case, I don't think I could have sold the old car for more than what I got on trade in (it was end of the month, my car was close to showroom condition-2003 Mazda 6s, V6, loaded, and again, close to showroom condition 60K miles) and the sales taxes were reduced due to the higher trade in value I received. You don't have to accept their "offer" or their value of your car.
 
imo, kbb and edmunds are usually a little higher for trade in values buy as much as 2K.

it depends on the vehicle and desire for that type of vehicle/mfg.

you also look at the tax savings for the trade in vesus a private sale. sometimes it makes sense to do the trade as it is much easier.

it also depends on what type of vehicle you are trading/selling and what you are going to buy.

i.e.: if you are buying a left over or a vehicle that is not as desirable, then you may get more for your trade.

my experience, go in and get a price from what you are buying with NO mention of trade. then throw your trade in the negotiations and see what they come up with. then it is up to you for comparison on trade vs private sale.

one thing to take into consideration is that we all think our vehicles are worth more then they actually are.

on a side note, a toyota will bring alot more on a trade j/k :grin:
 
Against my better judgement I just traded my 2007 4.6 Limited. I got the edmunds recommend trade in from the dealer.



First time I've ever done this and prior to this I swore I never would but I was going to be stuck with 4 cars for a bit if I had tried a private sale. On the other hand, I would have made a couple of thousand more with a private sale as this truck was low mileage and pristine.



When I was negotiating, I made the dealer keep the trade in price separate from the cash purchase price.



Truck being pristine is why I didn't get much of a fight about the trade value from the dealer. This time I took convenience over getting my final price. :banghead:



 
There is a tax benefit if you trade in a vehicle. As above, research the value of your truck (take documentation with you for salesman to see) to get the most appropriate value for it. The trade in money is deducted from the price of the new one and you only pay taxes on the remainder, not the whole amount!! BC
 
I have usually got the TMV of edmunds on my private sales. Privately sold my last 5 cars. That was much more $$ in my pocket.
 
When I was a full-time service station employee, who pumped gas, checked oil, towed cars and actually performed auto repairs, I had a pretty good side job reselling used cars for a nice profit. Now that I don't have free access to a fully-stocked service station, tow truck etc., and am forbidden from taking apart cars in my driveway, the economics of getting rid of old cars has changed significantly for me.



If you can make good money selling your used car on the open market, you probably know it. If not, try to figure out how much you earn per hour doing your regular job. Then compare that to the estimated gain of becoming a sudden, one-time used car dealer. Chances are good that driving a harder trade-in bargain with your dealer will cost you less of your valuable time than becoming a used car salesperson will.

 
Does the tax benefit still apply with used vehicle purchases?
Click to expand...



In Ohio it doesn't.



By far, the best place to sell a vehicle is an auction. Everyone know you get top dollar selling at an auction.:bwahaha:



Seriously, know what your vehicle is worth. Know that a dealer makes THOUSANDS on used cars. The average dealer will make $2,000, or more, on a used car, so they will almost ALWAYS low ball you. Know what it is worth and stand firm.



They will usually give you some crap about the market, why SUV's (insert any car here, just depends on the situation) dont sell that well, etc. You will never have the vehicle everyone wants, unless you are buying it. Then it is such a hot car, you are lucky to find one on the lot.



Dealers are not your friend. They do not care about you. They care about making a sale and making money on it. They will cut off their nose to spite their face. They will sell cars at auctions at a loss, but will not sell to you to break even.



Stand your ground and be a jerk to them. Keep control of the deal. NEVER let them run the show. You have the money and they want it. Make them earn it!



I deal with one dealership and when I walk in to buy a vehicle, I make it clear that during this deal, I am not going to be a nice guy. After the sale, I talk to everyone and am very friendly and helpful, but during negotiations, I will be a jerk and I will be the leader. If they do not like it, I will go somewhere else.



I WILL NOT pay a document fee! This is the cost of doing business for them. I do not pay Home Depot to ring me out so there is no reason for me to pay them to do the same.



I do not play games. You tell me what you want for it and I will tell you what I will pay for it. You do not need to confer with your boss. The deal is between you and I. You know what the boss needs out of it. My deals are short and sweet. If you think me walking out over $100.00 is being petty, then you need to look in a mirror. The best thing I ever heard was this...



"You are not going to walk out over $100.00 are you?"



My response, "Are you going to make me walk out for "only" $100.00?"



Know what vehicles are selling for that you are trading in. Used lots, buy here-pay here, new lots with used cars, private parties, etc. and set your price.



If more people purchased that way, everyone would be more successful in the auto industry. Games are a thing of the past. Don't be afraid to walk out.





Tom
 
Tom is 100% correct. It's a business, and if you think that a dealership will do you the slightest favor, you're a damn fool.

 
Sell it, watched many many people lose their buts on trade ins. I take my vehicles to some one I know that has a car lot and give them about 5% to sell it and I still come out better than trading.
 
The Trade-In value is the Wholesale value of the vehicle. Dealers will only pay/allow you the Wholesale value because they know they can get every penny back if they have to sell your car to another used card dealer. Many new car dealerships only want to stock late model, low-mileage vehicles on their used car lot and will quickly sell off trade-ins to other used car dealers in the area just to get their money back quickly with little or no profit. Of course, they will often try to offer you a price below trade-in value and that's where you will get burned.



Depending upon the taxes in your area, you may find the difference in taxes offsets the difference between the Trade-in value and private-party sales price is not worth arguing about. I once got into a debate over $500 in trade-in value when the trade in would reduce my sales taxes on the new vehicle by nearly $800. In that case trading the vehilce saved me $300.



There is also a lot to be said about buying a new vehicle without being encumbered by a trade-in. It makes the deal less complicated, and if you arrange your financing before going to the dealership you have the upper hand.



When I purchased my 2008 Mercedes, I traded-in my 2003 Sport Trac and my wife's 2003 Saturn Ion-3. I was given a substantial discount on the purchase price of the Mercedes, and was suprised to get $1000 over trade-in value for my Sport Trac. The dealer tried to low-ball me on the Saturn by offering $500 below the Trade-In value, but I showed him that I had done my homework, and he quickly said that he was not going to loose the sale over $500 and gave me the full trade-in value.



The dealer sold the Saturn on his lot within a week and he sold the Sport Trac to a used car dealer across town ( A friend saw it on the lot). This was when gas prices were climbing, and just before the bottom fell out of the SUV market in 2008. That's probably why the dealer was much more interested in 2003 Saturn. Both vehicles were completely detailed before I took them to the dealer for appraisals and he said all he needed to do was put new tires on the Saturn and put it on his lot.



Trade-in can be beneficial if you do your homework, and know exactly what your vehicle is worth (Wholesale) and do not accept less than the wholesale value. The dealer may try to give you all kinds of excuses as to why the price you expect for your vehicle is too high. but just stick to your guns and don't be afraid to walk out.



I worked as a salesman for a local Ford dealer for a while and they had a specific website that they would use to appraise the value of trade-ins and they told people they could only offer what the website gave as a value. Of course the website was nearly always lower than customers expected. However most people over-rate the condition of their vehicles and expect a higher price. In reality, their vehicles are probably no better than average condition. Both of my vehicles were in better than average condition, and by spending about $125-$150 each for a complete detailing job, I increased their trade-in value by about $1500.



...Rich





 
Traded in my '04 ST back in '07 when it had about 24k miles on it, and was prestine. Dealer low-balled me, slapped 4 new tires on it, then put it for sale in their used lot for $3k over what they gave me. It sat there for months. I suspect they sold it for a couple of thousand more than they paid me for it when all was said and done.



Could I have sold it outright for the price they eventually got? Maybe.



But how long would it have taken and how many tire-kicking yahoos would I have had to deal with in between?



TJR
 
Last edited by a moderator:
Could I have sold it outright for the price they eventually got? Maybe.
Click to expand...



If you trade in a vehicle worth 6 grand for 3 grand, you could sell it for 4 grand very fast and still get 1 grand more for it.



There was one time Dad was trading in his pick-up. He told the dealer what he wanted for trade. They tried to tell them that they would not make any money on the deal. Dad walked out. There was a guy on the lot wanting that vehicle. Dad made a deal with that guy to buy the vehicle. Dad walked back in and said "I got a guy willing to pay me XXX for my truck. You can give me $500 less than what he is willing to pay and sell him the truck you just got it. A 500.00 profit is better than none" They took the deal. Dad got the price he wanted, the savings of the taxes with the trade-in and the dealer made an easy profit.



If they did not want to got for the deal, he would have went across the street and made the deal right there.



The dealer knew they had no choice.





Tom
 
If you trade in a vehicle worth 6 grand for 3 grand, you could sell it for 4 grand very fast and still get 1 grand more for it.
Click to expand...



Everything is relative. As you stated in your example, if you are purchasing a new vehicle, you would have lost money (sales tax). It doesn't really matter the purchase price or the trade-in price, the number that matters is the difference when the deal is done.
 
The buying part I'm not worried about I've done pretty well the vehicles I've purchased recently so I've got that game pretty well figured out.



I had no idea though that trade-ins were deducted from the "purchase price" so that taxes weren't paid which is solid information and in CA amounts to quite a bit since we are I believe the highest tax rate in the country.



The only reason I'm even considering it is convenience, since we either have to sell first and then go buy the new vehicle, or buy and sit on an extra car while waiting.. Already having sold the vehicle could mean the difference between having to finance or not.
 
I had no idea though that trade-ins were deducted from the "purchase price" so that taxes weren't paid which is solid information and in CA amounts to quite a bit since we are I believe the highest tax rate in the country.
Click to expand...



This MAY not apply to used vehicles. This is the case in Ohio. Taxes are not paid on the trade-in value in the purchase of a new vehicle, but you get pounded on a used vehicle.



There is no "perfect" case that works all the time. Each is completely on its own and must be calculated each time.





Tom
 
In Missouri, If I purchase a New or Used vehicle, it applies. If I trade in, it is deducted at that time, and if I sell my vehicle, I have 90 days to turn in the paperwork for a partial refund. For instance,



If I am purchasing a $15000 vehicle, and my trade in is worth $5000, I only pay sales tax on the $10000 in the state of Missouri.



If I buy that vehicle for $15000 without a trade in, I pay the sales tax on $15000 when I register it. However, If I then SELL my old vehicle outright for lets say $6500, I can submit paperwork to the state to get the difference in sales tax refunded. (So I would end up with tax on $8500 of that original $15000 amount paid)
 
In Texas we can reduce the taxable amount of the new or used vehicle being purchased by the amount we received for the trade-in. This does not apply to private sales and it cannot be done as separate transactions. The vehicle being sold must appear as a trade-in on the sales documents for the vehicle being purchased.



Dave I find it hard to believe that any state would allow you to sell a car privately in a separate transaction and then let you apply to have your taxes reduced on your newly purchased vehicle? That system is just wide open to fraud and battles about the true selling price of vehicles between buyers and sellers.



...Rich
 

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