We currently have a 2007 Torrent and was thinking about trading it in, has anyone traded before and have any advice. Is it worth it, do get fair value....etc.
trade in car
- Thread starter SchuellerClones
- Start date
You'll probably be better off selling it yourself. If you still want to proceed with trading it in, make sure you know what the car is worth before you go to the dealer (check kbb.com or Edmunds). I'm sure you've heard, but make sure you keep the price negotiation separate from your dealing on the price of the new car.
I'd think twice about selling it. I don't know what kind of discount you got on that vehicle when you bought it but you're going to take a BIG hit on it now. The big 3 are discounting everything which is going to kill your resale value. Don't be surprised if they offer you 10K on your trade-in.
If you do trade it in I wouldn't forget that the total price that you pay for a car has little to do with the VALUE of the car.
If you do trade it in I wouldn't forget that the total price that you pay for a car has little to do with the VALUE of the car.
Keep in mind if you sell it on your own you need to make enough over the trade to cover the taxes.
I always figure out what I want to trade for and what I want to pay for the new car. From that you have a difference amount. That amount is all that matters. Let them give you whatever they want on trade or in discounts on the new car as long as they hit your difference amount.
I always figure out what I want to trade for and what I want to pay for the new car. From that you have a difference amount. That amount is all that matters. Let them give you whatever they want on trade or in discounts on the new car as long as they hit your difference amount.
I sell cars for a living. If you financed your Torrent for 5 years with nothing down, you will own the vehicle for 4 years before you reach break even on a trade. You may or may not be able to sell it privately after three years and break even. That is true on virtually 100% of the vehicles made by GM, Ford, and Chrysler. If you want a new vehicle often you really should consider a two or three year lease. The only bad thing about a lease is that they make you realize what it really costs to drive that hunk of iron. Guys, you can say leases are bad because you never own the vehicle. Consider this, if you owe money on the vehicle, you do not own it, the bank does.
Me? I buy whatever I can pay cash for and then drive it until the wheels fall off.
Me? I buy whatever I can pay cash for and then drive it until the wheels fall off.
Every time I've ran the numbers, a lease has never made sense to me.
For example, let's use a car that actually has good resale value to illustrate the point.
2009 Honda Accord LX Auto
MSRP 22,415
36 month lease
$199/month
$2,700 due at lease signing(includes one payment)
So you're paying $9,600 to drive that vehicle for 3years and not over $36,000 miles
36 month purchase
purchase price $20,500 (msrp 22,415)
36 month purchase
3.99% APR
total cost $21,300
trade in value at the end of 3 years
At least $14,000
Total cost $7,300
I prefer to trade in about 3-4 years so I will go with the lease, I have never had to pay $2700 due at lease signing, I have had to pay under $1000 both times. When you buy a brand new car you dont have anything due at signing? Just curious as there wasnt anything mentioned on the example.
Putting something down makes little difference to the bottom line. If I were to put $5,000 down then my overall payments would be less and the purchase scenerio but my overall cost would actually be less which in turn would make the purchase an even better deal.
I also trade every few years and I still can never make the math work. I wish someone would point out an actual scenario where a lease would make sense over the purchase. I think most people lease because of the lower monthly payment.
I would hope so but lets say $13,000, it's still a better deal and you're not capped on mileage.
Let's get really cheap and say $12,000, it's still a better deal.
i know no matter what vehicles never have a good return on the investment, but i was just wondering when people trade every year what the advantage would be? we dont like our car in the snow so we thought we would take advantage of the 0% financing right now.
99.9% of the time it doesn't make fiscal sense to trade every year. I'd say the majority of the people like myself who trade every couple of years have a love of cars and just want something new. I know when buying a new car that I'm going to lose money. I sometimes buy used and then I do a lot better. With that being said, I would never buy a car if I was hurting financially and I have my own rule that if I can't pay the car off in two years or sooner than I don't buy it.
I have friends with a lot more money than I have that keep cars forever. They just don't have a love of cars and see it more of a challenge to see how long it runs. I respect that but I still don't know why you would drive around a 1992 Ford Probe with 300K miles
It's similar to people who gamble, buy high end audio gear, new PC's, etc.
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I just leased a Honda CR-V and I'd say three things:
1. Your example is not very accurate in my case. I believe the MSRP of the CR-V is higher than the MSRP of the Accord in your example, but my initial payment was $1k and my payment is only $215. Also, they didn't offer 3.95% APR for an outright purchase, so the financing cost of purchasing would also have been higher.
2. The value of the car in three years is just much more volatile than you are giving credit for. Let's say three years from now there is a new Camry that runs on natural gas, costs $.01/mile to drive, and has the same MSRP of current Accords. What will the value of your three year old Accord be? Or what if we go into a depression like the 1930s or Japan in the 1990s and have a massive deflation, what will your car be worth? When you lease, it doesn't matter, it is Honda's problem. On the flipside, what if we have a massive inflation and used cars go up in value? Well, there is a set amount I can buy the CR-V and I will choose to do so. I own a call option on the CR-V and Honda didn't even bother to charge me for it. Great for me, bad for them. I know these outcomes for the future value of the car are far fetched, but the point I'm trying to make is you can't predict something three years into the future using past experience and have that much confidence you are right. I think a lot of investors learned that lesson this past year, I guess car leasing companies haven't gotten the message yet.
3. I'm not very experienced in car buying, but it seems to me that you have much more bargaining power on a new car when you don't have a trade in. Since you can put the car back to Honda without any hassle, the process of buying a new car may be simpler and potentially less expensive.