Beware: If you are trading in your old car?

[Barry626]

Originally Posted by stovt001

If I may ask, if you're trying to buy a 2010 Camaro why would you buy a 2009 Mazda 6 just to trade it in months later?!?!

Excellent question & super dumb on my part!
I thought the Camaro was coming out late 2010.
I usually keep my cars 1-2 years which looks like I'll be doing after all!

P.S. Still not a reason to rip me off for 1000's because I want to sell so early.
I'm willing to lose the usual $5000-$6000 u lose when u drive off the lot.
But surely not $20,000.00 in 3 months. I'm not that brain dead yet!!

[Barry626]

Originally Posted by shadowed_Stranger

A local kia place is offering $8,000 minimum trade-in on any vehicle, "even if it is towed in on a wrecker".

Thanks for the laugh...I needed it bad

[Barry626]

Originally Posted by The_Blur

The deal they offered you is probably more than its trade-in value.

You believe a car for $34000 3 months ago should only be worth $15000 now?
Are u sure your not a dealer yourself?

If this is what the car industry is all about today I don't believe a bailout should happen?
Just like I'm about to make a hugh mistake buying another car in only 3 months.
This means I need to be responsible & make the right decisions for me.
Surely if I screw up & do the wrong thing in life then I deserve all that happens!
Just like the car industry needs to be responsible for their mistakes & not look for help from others!

[Barry626]

Originally Posted by Joker57676

Not all car values are down. I have a 2007 Civic Si that cost about 24k new. I was offered 20k for it last month with 18k miles. I know people love to talk bad about foreign cars, but damn do they hold their value.

[Barry626]

Originally Posted by camaro_corvette

What dealers are you going to, i have never heard of a dealer giving you good value on your trade in.

35 years & always got good deal on trade-in especially when full MSRP.
Use to be retail for retail or wholesale for wholesale.
Now it's full retail on new car & less then wholesale on trade-in.

[Barry626]

Originally Posted by diarmadhi

Hrm... you bought a car 3 months ago... and are complaining that you cant get within 10% of what you paid...

You are whats wrong with today's economy...

If you think making a major purchase (yes a car is a major purchase) and then changing your mind within the term of the loan is financially responsible.. then you deserve everything you get.

Don't worry karma will come to you in life too!

[Barry626]

Originally Posted by USAFJeeper

Well, I currently own a 2004 Jeep (title and all) I paid about 18K for it and it is listed at trade-in on blue book etc at 10K. It has 31 inch tires, rims, safari rack, 2 different safari tops and so on. I also live in a hunting and fishing area in Georgia and may try selling it on my own to make more cash off of it.

My problem is this... I am lazy as shit. I don't want to have to go through the pain of selling ha ha!! I do plan to walk in pre-approved for a loan and a hefty down payment. I should be able to carry 5 vehicles on the insurance a while before it gets painful. (Wife, 2 kids, my Jeep and the new Camaro)

Boy I hear ya!
Don't expect KBB most dealers now days give nowhere near it

[stovt001]

I have to side with diarmadhi and The Blur on this one.

[Mr_Draco]

Barry have you actually sat down and done the math?

At $34,000 MSRP you lose 20% just by buying the car which is $6,800 that reduces it's worth to $27,200. Now as a general rule of thumb, dealers (this applies to used car salesman as well) will only offer you at most 75% of a cars worth, they are a business and they are in it to make money, not lose it. On your car, that means that the MOST you can EXPECT to get from a dealer is $20,400. Doesn't mean you won't find a dealer who will offer more but such a deal will be VERY rare. The most I've seen a salesman do is 80% of a cars worth (and fyi he went out of business 2 months ago in part to his practices such as this as well as the bad market) which on your car is $21,760. Anything above this your pretty much guaranteed to never get unless you sell the car yourself.

[Barry626]

Originally Posted by Mr_Draco

Barry have you actually sat down and done the math?

At $34,000 MSRP you lose 20% just by buying the car which is $6,800 that reduces it's worth to $27,200. Now as a general rule of thumb, dealers (this applies to used car salesman as well) will only offer you at most 75% of a cars worth, they are a business and they are in it to make money, not lose it. On your car, that means that the MOST you can EXPECT to get from a dealer is $20,400. Doesn't mean you won't find a dealer who will offer more but such a deal will be VERY rare. The most I've seen a salesman do is 80% of a cars worth (and fyi he went out of business 2 months ago in part to his practices such as this as well as the bad market) which on your car is $21,760. Anything above this your pretty much guaranteed to never get unless you sell the car yourself.

Thank-you for this info as I sure wasn't aware of it.
Now that I do know what I do I know what to expect.
So even your figures say I should be offered 75% value $20,400.
My thread was started because I was offered only $15,000 from one dealer.
So I guess I'm right to be upset that a $34,000 car could be worth 56% less?

No big deal as I would never sell my car not even @ $20,400. Keeping it for Sure!

[stovt001]

It does cost the dealer quite a bit to prepare a used car for resale. There's inspection, all the little things that need to be fixed, getting routine maintenance up to date, etc. Then there's dealer overhead, salesman's commission, etc. The car's buyer will try to haggle for less than book value. Add it all up and you can see how they can't afford to sell the car for much. You'd probably have better luck selling it yourself. The only problem there is most people are cautious buying such a new car used, thinking there is something wrong with it, even though you're only selling it because another car caught your fancy.

[card21doc]

There are multiple problems that are happening at the same time..."The perfect storm."

Banks are tightening credit requirements and loaning LESS on cars.If you are upside down and trying to trade, it harder now to get a loan. Banks are turning down deals on 700+ credit scores that they would have jumped at 9 months ago.

The dealer needs to be in a position to move the used car and get the money NOW. That means to value a used car at what he can convert to cash next week at the auction (ie wholesale.)

On a car like the Camaro, if the dealer is going to get MSRP out of it, that means he can only give you on trade it's wholesale worth now. Not next month, not next spring....NOW.

If the dealer tries to retail your car, he must be in a position to sell at what the bank will finance. Bankers are aware of the current market and have adjusted their lending accordingly. Again, if someone tries to buy your car with a trade, they are probably upside down. How do they get financed? Generally speaking, people buying used cars do not have as high credit scores as new car buyers. ( Don't get po'd, I said GENERALLY.)
It is a vicious circle.

( As a side note, it hasn't been that long ago when banks not only wouldn't finance the upside down part; they actually REQUIRED A *****GASP****DOWN PAYMENT.)

Let's take a typical scenario. I'm just making up the figures.

You go to your local dealer to purchase a $30,000 car. That car costs the dealer $27500, which he has financed.

You have a trade in that is currently worth $20,000. The dealer agrees to trade with you for $8000 difference. That means he is getting $28000 for his car, right?
WRONG!
The dealer is getting $8,000 in cash and a car that he has to sell. There is no guarantee that he will get $20,000 for your trade in, or when he will sell it. He might sell it tomorrow, or next week, or next month, or even next year.
Keep in mind that THEORETICALLY he has made $500. He has to pay interest on his car, he has to pay a commission to the salesman, he has to cover his overhead in order to stay in business,
The worse part is the dealer has $8000 in cash, but he has to pay off the $27500 to GMAC or whoever has the floor plan. That has to be paid IMMEDIATLY. Not when he sells the trade, but right now.

So follow this along:
The dealer has $8000 in cash to pay off a $27500 car. He will not have the additional $19500 until he sells the trade in. The dealer is in the hole $19,500 until he sells the trade in (which again may be next week, next month, next year.) In the meantime he has payroll to meet, he has overhead, and maybe, just maybe he'd like to make a little return on his investment.

This scenerio is playing out all over the country, and dealers are being put out of business because they can't make up the $19500 deficit.

Now, if you don't have a trade, it's quite simple. You buy the $30,000 car for $28000. The dealer in turn pays off his loan on the car of $27500, and has $500 left over to pay his overhead and maybe make a profit.

In normal times when the cash is turning over, the dealer would rather have a trade in. He will roll the dice that he will make money on the trade in, and cash is flowing, so he can afford to pay off the $27500 even though he only recieved $8000 in cash.

I hope I have conveyed the dealers' side of the trade in story. It's not that the dealer is trying to screw anybody. Most dealers that are still in business treat people right. They are just trying to make an HONEST living like anyone else. I live and work in a small town. The people we sell are friends and neighbors. I like to be able to look them in the eye when I run into them at the grocery store. I'm interested about how little Bobby did in his little league game. When they need service, I want to know. If they need a ride or a car to drive I'm going to give it to them. If they can't bring their car in for service, I'm going to go get it, service it, and return it to them at no extra charge. We never sell at over MSRP, and usually we will discount a car. I will show them the invoice of the car they are buying. I will show them how much "profit" I am making. I will show them what their car is worth.

Maybe that is why we have so much repeat business. Even if people move, they still come back to our place to buy. We are in a small town in Indiana, but we sell more cars than a lot of "bigger" stores.

I'll get off my soap box now.

[Barry626]

Originally Posted by card21doc

So follow this along:
The dealer has $8000 in cash to pay off a $27500 car. He will not have the additional $19500 until he sells the trade in. The dealer is in the hole $19,500 until he sells the trade in (which again may be next week, next month, next year.) In the meantime he has payroll to meet, he has overhead, and maybe, just maybe he'd like to make a little return on his investment.

This scenerio is playing out all over the country, and dealers are being put out of business because they can't make up the $19500 deficit.

Now, if you don't have a trade, it's quite simple. You buy the $30,000 car for $28000. The dealer in turn pays off his loan on the car of $27500, and has $500 left over to pay his overhead and maybe make a profit.

In normal times when the cash is turning over, the dealer would rather have a trade in. He will roll the dice that he will make money on the trade in, and cash is flowing, so he can afford to pay off the $27500 even though he only recieved $8000 in cash.

I hope I have conveyed the dealers' side of the trade in story. It's not that the dealer is trying to screw anybody. Most dealers that are still in business treat people right. They are just trying to make an HONEST living like anyone else. I live and work in a small town. The people we sell are friends and neighbors. I like to be able to look them in the eye when I run into them at the grocery store. I'm interested about how little Bobby did in his little league game. When they need service, I want to know. If they need a ride or a car to drive I'm going to give it to them. If they can't bring their car in for service, I'm going to go get it, service it, and return it to them at no extra charge. We never sell at over MSRP, and usually we will discount a car. I will show them the invoice of the car they are buying. I will show them how much "profit" I am making. I will show them what their car is worth.

Maybe that is why we have so much repeat business. Even if people move, they still come back to our place to buy. We are in a small town in Indiana, but we sell more cars than a lot of "bigger" stores.

I'll get off my soap box now.

I truly thank-you for the time u took to post this reply. Appreciated more than u know!
I get it 100% and do realize much more after reading this. Best of Holidays to you & yours!

[Jiu Jitsu Jon]

Oh Noes! A dealer is lowballing us on the trade in value!

Not to be a dick, but is this new?