# Should I trade?



## stoked335d (Jan 4, 2010)

You will always loose on a trade in. Trade-in vs. selling it yourself depends on the current real market value of your car. You could get this by comparing similar cars with year/model/options/mileage privately-listed on autotrader or similar sites. Dealers tell you that you save from sales tax but if you do the math in most cases they keep that savings.

I would stay away from any loaner car. I would actually put it in a category lower than a used car with same mileage with 1 owner. It may have only 7K but if you think about it probably a different person drove that car every week and drove it like they stole it!


Bought my d $500 over invoice minus $4500 diesel credit(2010 credit was $1000 more). Banked another $900 diesel IRS 1040 credit for 2010. If I were in the market for a new car few months earlier I would have deducted sales tax for 2009. 


Dealer 1 offered for my 6 year old, accident free, carfax clean, 37K miles 1 owner(myself) WRX $8500 and place where I got my D offered $8900. The car was detailed, compound/wax at a pro shop and inside was shampooed. New tires and complete brake job was done. I sold it myself for $12700 in 10 days and that was on the lower end of the price range of other similar autotrader listings. My savings was over 40% even if you include the sales tax savings from trade-in. 

I don't know about dealers by you but these two offered me Manheim auction price. I looked at 1st dealer's used car lot and they had all types of non-BMWs for sale so they were totally lying to me that they could only sell my car at an auction. 

Best way to get the best price is to go through overstock.com or edmunds.com or similar site which uses zag.com. You get a price quote from local dealers that participate in this program and most of them honor the price on the new car. Trade-in is a whole new lowball game.


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## cssnms (Jan 24, 2011)

SteveGu said:


> You're right of course, but in this case this was the conversation *after *I did exactly as you suggested. I negotiated a cash price, then presented my tradein. Plainly they told me that from their point of view (new-car salesman), they didn't care whether I traded in a car or not, and that the net difference would be identical either way. Perhaps the used car department "cared", but they would offer the same amount even if I wasn't trading in (I did this too, and the dealer had no problem with it, just wrote me a check).


I would say this is the exception and not the rule.

Think about it, why on earth would a dealer pay a customer anywhere close to private party value on a trade? The dealer needs to make money on that trade when they go to sell it. More often than not it costs the dealer a $1000 or more to sell a used car and that includes commissions, marketing, reconditioning etc. They have more into that car than they do a new car. Dealers make more profit on used cars than they do new cars, which is why they like trades so much. If the dealer is offering to pay you anywhere close to what you think you can sell your car for private party I guarantee you they are making up for it somewhere else.


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## SteveGu (Nov 3, 2010)

(Please do not find me argumentative, I just wanted to pass on my recent experiences, and they _are _different than I have had in decades past)

*Think about it, why on earth would a dealer pay a customer anywhere close to private party value on a trade? *

Absolutely I agree. What I found that I thought was of interest is that at least in my area, in shopping 7 dealers over 4 brands (BMW, Honda, VW, Audi), I got the same story from them all, to wit (as you properly point out) the price they will pay for a used car is within a very narrow range, starting at the dead-bottom auction price and increasing slightly for a very nice example of their house brand (which they might resell on their own). Even then the spread is none too impressive. Certainly they know that a private sale will yield more money, but that 6-7% tax savings is there for the(ir) taking, I think they reason.

I am sure there are plenty of dealer/brand/customer combinations where your advice is vital, and I still think it is right approach (I used it!). I just thought it of interest to find out that at least in my market they seem happy to just pocket the tax savings (or as much of it as you let them) and essentially make it two separate deals.


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## cssnms (Jan 24, 2011)

Good discussion. This brought back memories when I worked at several dealerships (Nissan, Mercedes, Porcshe, Audi) way back in the day, no I wasn't a salesman  . I recall salesmen bragging about how much they cleaned up on this deal or that deal; this was when commissions were calculated not only on volume, but profit. Trade-in deals were always at the forefront of the conversation. With the benefit of a behind the scenes perspective, I could not believe the net price paid for some trades; you would truely be astonished and the customers were non-the-wiser. Of course consumers did not have the same resources at their finger-tips that they do now so they were less educated, but today the tactics are still the same although in many cases less egregious.


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## Snipe656 (Oct 22, 2009)

I actually never knew about the tax savings on trade ins until about a year ago. Had I known about that then two of my previous cars I'd definitely traded in over selling privately. Both of those cars I ultimately only got a little bit more money for than what I was offered for trade-in value and from CarMax. So with both of those cars if the 6.25% tax savings did in fact exist back then, then I'd been better off trading them in than the route I took which was to do a private party sell. That does not even factor in all the hassle I faced doing a private sell, which was people wanting to try and talk me down left and right which is just something that has always annoyed me to all ends. I am sure dealers make lots of money on trade ins, new cars, service and so on, heck they have a lot of overhead and need to make lots of money. At the end of the day for me though it is about how much can I buy something for or can I sell something for or can I repair something for, if it is close then a convenience factor comes into play for me.


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## zach0726 (Oct 23, 2011)

As a data point my 2010 d was a loaner car. Premium/winter/nav packages. Paid $39k with ODO at 8.5k miles.


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## Flyingman (Sep 13, 2009)

Dealer is betting heavily on the convenience factor for sure.

One stop shop and drop. Not too many folks have the free time and energy to go about trying to sell a car.

How many of us are going to buy a used BMW that didn't come off the dealer's lot? I'm going to expect warranty, etc..., so CPO is important.

I once brought in my wifes 1986 VW Jetta to the dealer for a bad alternator, was going to cost me something crazy like $1,200 bucks, and I ended up driving away in a new identical Jetta, same color, etc.. only with a sunroof. They actually gave me a great deal on the trade-in for the new 1988 or 1989 model. In fact my wife didn't even realize her car was now a new one. The model had hardly changed in 3 years.

At least I didn't pay the $1200 repair.:rofl:


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