If I trade in my car at the dealership, am I throwing my money away?
I'm in the market for a new car, and several dealerships have given me a trade in value for my current one.
But the dealership can't give me book value for it because that is what they'll be able to sell it for at most, as very few people pay sticker price.
I figure I can sell my car privately, direct to the next owner, and get about $2500 more for it.
Then I can take the the cash to the dealership and make a larger down payment than trading in the car would get me, and my monthly payment on my next one will be lower.
Is trading a car in at the dealership for idiots?
- Anonymous6 months ago
Unfortunately there is never a short answer(or I can't find it)..so bear with the rambling on.
Selling to dealership's is convenience(that is what you are paying for) and they take the car off your hand right away and you drive away with the new car. If your driveway can only really store one car conveniently(many apartment dwellers only have 1 parking space so they have no place to store the old car while they try to sell it. If you OWN(NOT RENT) a house, or you have an understanding lenient LL(some of those type of people exist) who has say not super neat, super tight apartment grounds(meaning he has extra parking spaces) you can work out an arrangement to let your old car stand there for a week or 2 while you clean it up and actively try to sell it...which is easier if it is a very busy area with a lot of traffic flow. They see the sign in the window and the price and your phone number and they give you a call. Not all people are great salespeople so do not want to do that kind of work. but if you have the "gift" of gab and you can make people comfortable talking to you, and they will be talking about the car...so you need some knowledge...which you do have through experience..."It gave me no troubles, ever; or what I did have I also had it fixed...so no problems.
..I did not build the car so I personally do not have a warranty on it; I look to the manufacturer if an issue shows up...as they do what they can do.
..It runs good, I just need a different STYLE of car because I got a larger family or work situation has changed or I wanted 4 door instead of 2 for convenience, or I need different because my job is different so I need to carry tools and stuff and this CAR won't serve that purpose for me. I am forced to look at a truck or van or SUV or crossover. If I could have 2 cars I would still keep "Betsy".
. The reasons for selling can be many. Me, I did it because I wanted to drive a different type or make of car and I wanted a change in color.
(but that is my personal reasons which is only my business)
So even selling your car privately, you are going to take a hit "a loss" as cars do not go up in value.(it has to be a collectible vintage that is desired) & not all cars fit that description.
$2500 more is really OPTIMISTIC on your end. Not really reality.
Some dealerships are like that relying on the brand name to allow them to ask more. Say for example VW, their prices are quite high for their new cars and when you compare car to car with its features, I can get just as much if not more from a HONDA vehicle than(for less money) than I could from a VW. I chose to buy a HONDA instead. I knew the repair record on the VW was quite good(as many of my previous cars were VW so I was tooled and knew how to fix most minor problems. But for less money the HONDA proves to be just as good.
While you can price your car at $2500.00 more, there is no guarantee you will have any takers. You may have to wait until school starts or some other event or just be lucky because somebody WANTED THAT EXACT CAR OF THAT YEAR. So you got a bite. They must pay for it in cash to you, the full amount because you are not a Loan Company so you are not taking payments. (something the car dealers are willing to do to make a sale) They can't offer any warranty either but they make it sound like they are and "had the car checked over by their mechanic" never saying that their mechanic is the clown that fills the balloons with hot air.
. You are competing with the lot. The one advantage you may have is that you are not paying for the lot the car sits on. Car lots pay rent so every car sale, some of that money goes to rent and advertising and paying salesman's wages and the "clown" & lighting and insurance for the Lot to insure themselves in case someone hurts themselves on the lot property and sues the car lot...etc[they got a lot of expenses] which is why they got to move cars so they do not sell them at sticker price for those hard to sell customers...but getting SOME money is better than NO money.
. You do not have those expenses so you are not in a rush to sell so fast.
You can wait for the right fish to bite at your hook.
It is like fishing or hunting....nope don't want that deer as the rack is not big enough, we will wait until a big one shows up. It will happen if you wait long enough for they say "A sucker is born every minute"
Are you willing to wait for something that may or may not happen.?
- AlCaponeLv 76 months ago
You can never be sure that you'll get more money by selling privately. It's kind of a general rule but doesn't always work that way. Essentially, buyers will pay what they think a car is worth and they are typically looking for good deals. It's a big hassle and you have to deal with a lot of idiots who want to talk you down without ever seeing the vehicle, scammers, people that never show up to buy, and people who harass you after the sale complaining about problems and wanting their money back. I would rather sell to CarMax and be done with it.
- Anonymous6 months ago
I always sell my old car privately. Dealers want to make two sets of profit out of you.
- Grandpa JackLv 66 months ago
I wouldn't necessarily say you're simply "throwing money away" by trading a car to a dealer rather than selling it outright privately because selling a car yourself DOES cost you some amount of your time and it does take some effort that you otherwise wouldn't have to spend if you just traded the car to the dealer and washed your hands of it at that point.
In essence, the value you're losing on the car at trade in (vs. private sale) can be thought of as payment for the convenience of not HAVING to sell your car privately. I've sold plenty of my old cars over the years, and there are times where it has taken weeks and I've had to deal with some real @$$hat potential buyers who wasted my time and/or who couldn't produce the actual cash when it came time to transfer the title etc., - honestly sometimes I think it IS worth it to lose a little money on the actual sale by trading the car in for the priviledge of not having to actually sell the car privately.
I'd say get a couple of prices on the car in trade (many new car dealers will buy trades even if you don't buy a car from them, and some used car dealers like Carmax also do this), take the highest bid if it's remotely close to the private party sale value (being realstic about the actual condition and value of your car) and just be done with it. The older I get, the more I realize that my time is worth quite a bit of "money" too. Good luck.
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- pit bulls biteLv 76 months ago
selling it on your own is iffy
- Trump 2020Lv 76 months ago
YES. The price they will end up giving you will be WAY lower than it's actual value, in order for them to make a handsome profit.
Most dealer profits come from the service department and the resale of used cars. They actually make very little selling new cars, except high end loaded SUV's
- Anonymous6 months ago
It really depends upon what kind of shape the car is in, and what incentives you can get from the dealer. My last car was 16 years old. I traded it in with the dealership for $500 above the blue book value. They were willing to do this because they wanted my business, not just for the car itself but for maintenance. Obviously your situation may be different if your car is newer, and you know people will be interested in paying for it.
- PercyqtedLv 76 months ago
If you trade it to the dealer, you trade it at a time to suit you.
No hassle, no comeback, no worries about getting the money, no waiting for someone to be interested in it,
If you sell it privately you must wait until you've sold it to, hopefully, get the money, the buyer may not register the title correctly leaving you liable and will no doubt try to beat you down on the price.
Is it worth all that hassle?
- regeruggedLv 76 months ago
When you trade in a car, you get the "wholesale" value or the "trade in value". When the dealer sells the car, he tries to get full "retail' value. Since you are not a dealer you cannot expect to sell your vehicle for "retail" value. You cannot give the service and guarantees that a dealer can. Put an ad in your local paper and ask for the amount you think it is worth. Then see if you get any calls. Buyers are always looking to pay less than wholesale value.
- hotstuffktrLv 66 months ago
1) No worry about receiving the money; 2) the trade-in value is removed from the sales price - you in effect save the sales tax on the value; 3) no wasted time on "no-shows."