Trade Ins - How?
 

I'm honestly baffled how anyone trades in a car. We have a 2017 Toyota Sienna XLE Premium AWD with 30k in mint condition, loaded with Toyota service records, window sticker, two fobs, clean and clear title, etc. Basically a turn-key car for a dealer, it could go into inventory on day 1. My wife is tired of driving a minivan, and so am I, so we are going to get a Ford Flex Limited Ecoboost which is a really nice driving wagon. For the sake of convenience I considered trading as the book trade in value aligns nicely with the retail value of a low mileage 2016 or 2017 Flex with our desired options. Seems fair, right? So thus far I spoke with a dealer in KS with a left over 2016 demo with 2,500 miles, they made me a low ball trade in offer that was under even Carmax, didn't give me any relief on their Flex from MSRP, then quit calling me back. Second dealer with a left over 2017 demo with X,XXX miles (never could even tell me how many) that made me an even lower offer, didn't move off of MSRP, and didn't call me back. WTF? Seriously, how does anyone in their right mind trade in a car? I can easily sell this thing for at least $4k more than the highest offer, then buy a lightly used Flex for about $16k less than these morons have offered me for comparable cars. I still have access to Manheim auction data so I can even see what similar vans are selling for at wholesale auction, what I'm being offered for trade in would allow these fools to make $5k+ just taking my van to auction. Absolutely insane.

"Profit is not a dirty word " - sales manager at the dealer I used to work at -

What blows my mind is that I was offering them my car at trade in, for their car at retail, and we were still a mile apart. They could have easily turned mine for for a $3k profit.

Just like so many sales folks I've dealt with. Instead of hitting steady singles and doubles many are looking for the homerun or nothing.

Made me a sucky offer on a trade in and I started to walk. They took what they had offered on the trade in off the car without the trade in.

A few weeks ago I went out to see what an Electric Hybrid was all about. My research had pointed me to 2 contenders, the Volt and BMW i3, long story short we liked the i3 better and said so much to the salesman that let us drive one. We made it clear we were not buying just doing research.

Well, BMW being BMW they did not want us to walk away, they asked if we would deal that day and I said no, not because of money but more because of room, I needed to sell my 2005 Mini Cooper S JCW first.

They asked for the VIN# and ran it, they offered me $1500 for it. I laughed at them and told them they had no clue what I had. The sales manager walked away to "talk to someone" then came back 10 minutes later and offered $3500 and that was a "gift". I laughed again and told them they were clueless and I would be in touch once I sold the car.

The salesman asked me what was so special about my car that they were missing, I stared at him for a moment and told him to try to find a R53 Mini JCW for sale in AMERICA and let me know what he finds.

I will tell you what he would find, I searched when I got home. 2, two, TWO were for sale in all of the USA.

I listed my car on Autotrader and CL on Sunday for $8,500. 24 hours later it was sold for $8K even, what I paid for it 2 years and 35K miles ago.

I then texted them and offered them an out the door price on the pristine CPO i3 they had in the showroom, they balked, then took my offer. I emailed all my info to them that afternoon.

the next day I walked in, signed papers and walked out 45 minutes later with the keys.

I hate stealerships but wanted the 3 year unlimited mileage warranty the CPO car carried so I had to deal with them.

This. Difference is, I'll bet the majority of people who trade a car in "for the sake of convenience" have not done their research and get suckered in to the "That's all these are worth" We don't make much when we resell" etc.

I recall talking to someone once who bought a car without doing a test drive, because they liked the color. That probably explains how Chrysler sold PT Cruisers.

It's easy for us to think the car buying masses are just like us, but they're not.

Its because you aren't who they want to deal with. They want to deal with complete idiots, which comprise about 95% of the population. They have it pretty good.

Dealerships can afford to sell new cars at dealer invoice, because they make most of thier profit from a nice trade-in. My FIL once was going to trade a 5 year old high mileage Dodge Caravan on something new. He was mad that they were only offering him $3000 for the trade, and told me about it.

I told him I would offer him $3000 cash (we needed something different), and he could go back to the dealership, and offer $3000 less for the same new car....sure enough, they accepted the offer, so he would have GIVEN his older Caravan to the dealership, if he would have traded.

I did make an acceptable trade on a 1981 Datsun 280ZX (in 1988) a dealership had for sale. They took my 1980 full size Bronco, and $1000, so we were both happy. A week later, I drove by the dealership to see my 1986 Bronco for sale....wait a minute.....1986 ??? I called them on it, and demanded to see the title......which was changed to reflect a newer vehicle.

When it comes to "deals' on cars its all about supply and demand. If you want the hot selling vehicle be prepared for the dealer to not want to discount. Why? Well duh, there is another customer willing to pay close to MSRP. Next, don't look so shocked when the dealer tries to make top dollar. You want your best deal well, so does the seller. The negotiation dance brings the two of you to a number everyone is happy with.
Trade in? Everyone thinks their car is a cream puff. Nope. Everyone thinks that their trade is dependable because they've never had any problems. Maybe but the used car buyer doesn't know that. Many folks can't afford to buy the new car without the equity in the trade. Most folks don't want the hassle of selling off the driveway. Don't forget extra insurance cost until it sells, wasted time with "be back"s, and tax incentive to trade.

For the sake of convenience Exactly. There have been a few times when I just don't want to deal with the tire kickers and spammers from CL and am willing to take less than it's worth just to move it quickly..

The first rule of avoiding a trap is knowing that it exists.

I've never traded in a car to a dealership. I've always found their offers to be insulting, generally in the 10-20% of what I can sell the car for private party.

And then there is the other end of the spectrum. My wife had a 2003 F150 4x4 Stepside, which we bought new. 60K miles, and looked beautiful topsides, but was a rusted POS on the underside, to the point of frame rot, by 2013. After having a new section of frame fabricated, I had a firm offer to buy it for $2,500 and was ready to sell. My wife wanted a new Toyota FJ, so we took it to the dealer to see what they'd give us for it in trade.
We took a ride in a 14 FJ, and liked it, and decided to talk numbers. So I told them what we had to trade, and disclosed the full extent of the rot to them. The appraiser looked at it, and they wound up giving us 5K for trade, to close the deal that day. The "Black Pig" was gone and we drove away in a nice FJ.

Basic rule, don't try to negotiate new car and trade in at the same time.

Best to start with the price of what you're trying to buy.

After that, work on trade in.

If trade in doesn't go well, try to sell it to other dealers, and if you get a better deal, sell your car to dealer, buy car you negotiated.

Trying to negotiate both at once indicates you feel under pressure, and are likely to be a poor decision maker. Humans are also worse at balancing multiple thoughts, so it will be default keep someone from thinking properly.

Imagine if real estate was sold like that. Your house plus $500k for a new house of the same value. It just makes no sense but people don't like old cars.

Of course, Matt's Toyota isn't even old. But "new car fever" will cause people to make unbelievably bad financial decisions regarding transportation. The good new is that you should be able to sell that 2017 Sienna for book retail within days.

The crazy thing to me is that I was interested in the slowest selling car that Ford makes, and both were left over models that Ford would incentivize the dealership to sell. Oh well, it’s going up for sale on Saturday then I’ll lowball them with cash.;)

There ya go.

Here, the value of the trade-in gets deducted from the sale price of the new vehicle before the 12% sales tax is calculated so you can save a bundle (thus adding value to your trade) if the vehicles are not too far apart price-wise.

That's a major incentive to take less cash on trade vs. a private sale and as stated before, frees you from entertaining a long line of time-wasters walking up your driveway.

Never thought about this before but, Ive only traded in 3 times in the last 49 years of driving. Last time was around 92. Never felt abused after the trade but always dislike the dealing. Cayman was a private deal. I paid the going rate for a manual S and in 3 years the only problem was a water pump failure a few weeks ago. I may never buy from a dealer again. Hell I may never buy another car, I am 65 years old.

Am I the only one going all Dave Ramsey here? Trading in a 2017 car, you will realize a 6 or 8K depreciation hit and the sales tax hit. Then you buy another 2017 car and pay more sales tax.

I visualize taking 80 or 100 hundred dollar bills and lighting them on fire in the BBQ

It is a Toyota Sienna, a soccer mom vehicle. You kind of missed the boat when you got it, Matt. Now things are worse.

Edit: You may have listened, but the wife was wrong. Minivans were out 6 years ago.

Answer: buy stock in a dealership. I did. Laugh all the way to the bank.

Most people are just vapid lemmings who have been convinced they “need” a new car every couple of years. The reality is that this is totally untrue. I’ve never (and likely will never) buy a car new. I have a fundamental problem with paying thousands of dollars for absolutely nothing of value (depreciation hit). I bought my last vehicle (my ‘01 Benz) in 2006. It had already depreciated to about 40% of original sticker price and I got a nearly-new car for a pretty good price. I brought it here with me and still drive it. I’ll continue to drive it until the wheels fall off (and if they ever did I’d simply put new wheels on it and keep on driving it). I like it. That’s why I bought it in the first place! I still get lots of compliments on it because I actually value it and take care of it. I see absolutely no reason to get rid of it. I also intensely dislike dealing with salespeople - particularly when they’re trying to push something on me that I really don’t need for their benefit rather than mine (which is pretty much always the case with them).

I would never (and didn’t when I bought this car either) put a trade-in on the table. It’s just plain stoopid. Deal with cash only (simplifies negotiations), keep your car and then it’s your choice to either have a second car around or sell your original one private party for 2x to 3x what some dealer would give you for it. It’s a formula that’s always worked pretty well for me. Why leave money on the table? I’m not here to make some dealer money. I’m here to look out for myself, so I do. If the dealer doesn’t like that, eff ‘em. They’re dime-a-dozen anyway.

I once asked a dealer for the price of their most basic model-his reply was that they dont sell a basic model!!! I went home and phoned another dealer and bought from them even though they were miles away.I was also once faxed a colour chart by a dealer, and they rang me two hours later to ask which colour I wanted, and I said from the chart I have selected black-but we dont sell a black car sir- I bought elsewhere.
If you havent made the salesman cry you simply havent tried hard enough was my maxim when buying new cars(these days i dont like to suffer the initial depreciation so I buy low mileage used

This ^^^^exactly. I have a freind who gets a new car every 2 years whether he likes the old one or not (probably leasing). He, and his wife have resigned themselves to making 2 car payments forever, so they might as well have the newest, nicest cars they can get for thier $800 (2 cars) monthly payments.

I generally keep a used car for 5-8 years, and only take a $2000-$3000 hit total, and have been driving a triple black 2004 Mustang GT convertible I bought for $2500 for 3 years now......another 2-3 years, and I should be able to sell it for about the same price.

Yup, that was another consideration. The sales tax savings would almost make up for the hit that I would take at book trade in value.

I love Dave Ramsey. This is a different situation though. My parents bought it new, put almost 30k on it, then decided that they wanted an SUV so they sold it to us. We got the family member good deal, so financially this will work out fine. At the time we had a 2012 Nissan Quest with 95k which I recently sold, we just don't like the Toyota.

There's nothing cool about a minivan. But we also really don't care about perception. Minivans are the single best way to haul around kids and their stuff. We refuse to drive a big hulking SUV anymore (been there, done that), and crossovers don't have nearly enough seating space for actual humans. The Flex is the only thing that we've found that drives like a car, has good performance, seating for six adult sized people, and decent luggage space. Plus I think it looks cool in a funky way.

Most people with kids drive SUVs, I get it. But most people also trade in their cars.;)

One of my neighbors was trading in his 2005 Honda Accord with 150,000 miles, dealer offered him $2,000 for the car.

It was in great condition, new tires, brakes, timing belt and water-pump.

Told his neighbor next door about it so they made a deal, he sold it to the neighbor for $3,500 who then flipped it for $5K a few months later after giving it a full detail and a little bit of maintenance.

Everyone was happy at the end.

I was talking to the guy at the place where I have bought most of my vehicles over the past 4 decades. He knows I will possibly buy from him every 5 to 12 years (two vehicles in ten year rotation ). I told him I couldn't imagine how people could justify the money wasted on depreciation every two years.
His response, "I'm not their financial advisor. "
The comment about buying with no test drive reminded me I had bought a car from his dad sight unseen. In the fall of '84 the new Jettas became available. I had driven one at another dealer, but couldn't reach a deal with them. I called up my guy he told me his price and said he was picking up two cars at Autoport. DI'd I want red or black. I picked black. Picked up the car two days later for a 400 mile trip.
No regrets.
Best
Les

These new/used/lease threads just prove that anyone can rationalize any car-buying philosophy in the world. My folks used to believe in the drive-it-until-the-wheels-fall-off thing. Then my dad got a job with a company car that got replaced every three years, company paid for everything, even gas for personal use. Live with that luxury for 20 years and then retire with a lot more money than time and patience for repairs and maintenance, and you see things differently.

I can't stand the depreciation hit either, but sometimes you can strike a pretty good deal on a two year lease of a car that doesn't depreciate much anyway.

A wealthy, elderly buddy once bought the newest, greatest Jaguar and decided he didn't like it, told me he'd trade it in as soon as the newest MB model came out. I said, "Geeze, that depreciation is a killer." He replied, "Life is too short to drive cars you don't like. What do I have to spend money on? My daughters are married and successful doctors. My second wife has her own money (and a 993 she bought new in 1997)." He was about 75 when he told me that, so it's not like he'll be driving the next few generations of nice cars.

Just went through this. I have a 2013 Boss Laguna Seca with 21k miles. It is minty fresh. Was offered 27k. I could sell it private all day long for at LEAST 35k. Its a great car, but I've come to realize not for me. I prefer a lighter, more nimble car on the track. But man, I will miss that motor- good lord it is fast.

I haven't bought a car from a dealer in 8 years, and that time I did it because I really wanted a warranty. My daily is now a 2004 Honda Element I bought for $6k. So far I've put ~$500 into it in a year and a half, and could sell it for what I paid. That feels nice.

I have had a dealer actually tell me to take my car to CarMax instead of trade it because they could not compete w/ them on value.

We had a 2009 Ford Flex. It was an awesome car...best road trip car ever. We had the 2nd row captains chairs with the center console refrigerator/freezer and the glass roof. One of the smoothest and quietest highway cars I have ever driven.

Funny we actually got rid the Flex for a similar reason your wife wants rid of the mini van....my wife felt it was too big and didn't like driving it. As soon as the kids were out of strollers and carseats we traded it for a Volvo C70 hardtop convertible. Yes I said we traded it LOL.

If you think car dealers at good at selling cars, you oughta see them buy `em.

_

We love the damn things. She's going to get a Limited with the Ecoboost, AWD, captain's chairs, and the Appearance Package that gives you the black trim, black roof, and black 20" wheels. Cool looking IMHO and really nice to drive. But I understand your wife's perspective. Mine is getting a Panamera as soon as kid #1 is out of the house, 5 years and counting.:)

I used to have a dealer's license and still have access to Manheim auction data. The closest similar recent wholesale data per their MMR is $33k, I was offered between $25-29k depending on dealer. Had they offered me $33k, we would have had something to talk about.

I traded in a car to carmax not that long ago, I did

a few year old forester

Carmax gave me 20.0k for it and sold it for 24k 2 days after listing (I only paid 25k for it a year prior)

It seemingly hurts a bit to give away 4k. However that is not the full story. I can't get the same price for a car they can. They offer financing, warantys, and are open 65ish hours a week. Id be lucky to get 22-23k. We were trading it in on a minivan, so we saved about 1500 in taxes because of the dealer loophole. Of course Carmax isn't the cheapest place to buy a used car either all though the one we bought was priced more competitive than usual.

So in the end trading in costed me about 1000$ more than if I bought the same van from Carmax and sold our car privately.

It probably costed me 2000$ more than if I would have held out for the best private sale I could manage and bought a similar van privately.

It is a bit of wasted money, but is a ton easier, and no knocking on the door by craigslisters when you have an infant trying to sleep.

The answer as to why is simple: convenience. A large part is due to people are focused on what they want to buy and are much less worried about their old car. It's that simple.

Believe it or not a guy traded in a NICE 1969 427 / 425 hp Corvette, hardtop, 1 owner ( him) at our local Podunk Chevy dealership a few years ago. On what I don't know, but a buddy of mine was driving by, saw a chrome bumper Corvette sitting on the lot, stopped in, couldn't believe it, struck a deal - brought it home - true story.

This

I did trade ins twice.

First time was a Ford Tempo I was trading in on a second hand Nissan 240SX. They gave me $2500 for it, coincidentally was what I paid for it 3 years earlier, and it did not run because of the electrical system going to crap. Gave a good price on the 240, they thought they would make it back on the financing. I paid it off in a week, 3 weeks before any of the usury level interest rates kicked in and sort of screwed them.

Traded the 240 in on my wife's next car, played them about the same as the first guys.

PITA to sell stuff private party, but it is sometimes worth it. Sold a pickup my wife had because the dealer would not get within $5000 of what it was worth. She had it 2 years and we sold it for what she paid to buy it.

I was always told that you make your money when you buy in the used car game , not when you sell

Selling a car is a PITA. It also is not trivial if it is a newer car and outside of the price range that is commonly settled with cash. There is paperwork that isn't easy and there are scams.

My recommendation is Carmax. They pay top dollar for newish trade ins and you don't have to deal with some deadbeat from CL. I sold them my Mazdaspeed 3 for really good money when the Japanese had the tsunami and the MS3 was not easy to come by new.

A lot of people also love the experience of driving up to the dealership in their old car, moving over their coffee cup and umbrella to the new car and zip out of there. Those are the same people that never touch their car but to drive it.

G

This. They want people who will purchase on credit, say 72 months at 4.8%, through the in house lender.

We traded at out last car purchase. The car was a Mopar 2.7l with 167k miles and it suddenly developed a severe rod knock. Big surprise. Told them up front when we mentioned that we would be trading the car. Still gave us an additional $600 off for the car. Better than paying a junkyard.