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Real-World Trade-In Values

im_brentwoodim_brentwood Posts: 4,883
edited December 2013 in General
Hello,

Perhaps the biggest Problem that I see with
shoppers who have done research on the net as a
salesman is trade-in value.

So I decided to start this topic. I can, through
acess to information not generally available to the
public, get you a pretty good idea of what your
trade may very well be worth.

This is not a guarantee, but maybe I can help!

Bill
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Comments

  • isellhondasisellhondas Issaquah WashingtonPosts: 17,781
    The shopper will search the internet sites looking for trade in values. Naturally, they will believe the highest number.

    Trouble is, in the real world, the trade is often worth much less to a dealer.

    Why would they pay 10,000 for a car that go's begging at the auctions for 7500.00.

    Or a car nobody wants? The Neon or Hyundai will rot on the lot and the dealer knows it! Even the wholesalers don't want it.

    Or a Volvo that is brown with a 5 speed and a cloth interior? The "book" might say 12,000, but any dealer knows the car is saleproof at almost any price!
  • jaclazjaclaz Posts: 37
    Hi folks,

    OK, what are the cars that are being bought as trade-ins and being kept by the dealers rather than being sent to auction? Are these all brand animals as in all Hondas, all Toyotas, or is it sensitive to models, the Tiburon, the Millenia, Miata, Mustang GT....? This info would be very helpful in narrowing down purchases which trade well after "X" years. Are there vehicles which have better re-sale within 3 years of purchase but lose it after 4 years? And how about those European brands that lose thousands, yet on a % depreciate very slowly when compared to domestic luxury vehicles.

    Thanks for the topic, Jack
    Please continue....
  • im_brentwoodim_brentwood Posts: 4,883
    Jack,

    The cars on the market with very strong resale generally arent the price leader ad cars.

    Generally, these include the following:

    VW Passat/Cabrio
    BMWs.. almost all except 750iL
    Mercedes-Benz
    Most Audis
    Toyota Land Cruiser

    Notice also, that most of these cars are "strong" in the new car market, theyre rarely discounted!

    Most mass-market cars fall hard, especially mass-produced domestic sedans.

    And most "economy" brands do very poorly. I can pick up a 99 Kia Sephia at auction for about 7,000. That's for a 4-door automatic sedan with under 20K miles. You just cant buy one of those new cheap enough! Hyundais also do poorly, and I doubt that Daewoos will do well either.

    "average" Black Book on a 1998 Elantra is $6,000. That's an under 50% residual!

    Bill
  • audia8qaudia8q Posts: 3,138
    for all the shoppers out there....When trading in a car...your more likely to get a higher trade value if your trade is the same brand that the
    dealer offers. EXample, a ford dealer taking in an Explorer is more likely value it higher than a chevy dealer. No dealer wants a Saturn in trade, and will undervalue the car but the Saturn dealer will put top dollar on a saturn trade...same brand trades are generally the dealers favorites. Unless of course its a super low mileage cream puff. then everyone wants it.

    Brentwood is using some very good examples for trade values.

    Rich
  • mmcbride1mmcbride1 Posts: 861
    How about late model ('98-'99) BMW M3's? I have just started to look for one and the dealer near me (one price dealer) is pricing the '98 at $35k and the '99 at almost $40k! That's almost what they went for new! Are they really holding their value that well, or do you see it as a function of no 2000 M3's being made (meaning that after the 2001 waiting lists are gone and a few are on the lots, the used '98's and '99's will be cheaper, relatively)?
  • mmcbride1mmcbride1 Posts: 861
    The '98 was a sedan, the '99 a coupe, both stock, both in very good condition inside and out, both 5 speeds.
  • blackcurrantblackcurrant Posts: 152
    In the SW anyway, they hold their value really well, as long as they're ext cab and loaded.

    Also, the trends will swing. The passat is hot now, but, that could change in a few years. No one has a crystal ball.

    And, when trading a car do your own comparison shopping as a seller. Bring it to a few stores yourself to wholesale it. Sometimes, it's just what they're looking for and they'll give you more than you'd imagine. And find a store who's buying, like, for a special sale or who's low on inventory or, better yet, one of the superstores move into town and they've got a few million to spend to get started. Lots of opportunities there!
  • blackcurrantblackcurrant Posts: 152
    BMW M3s do hold their value like that. There just aren't enough of them. In fact, if you were willing to spend that kind of money on a new car, they'd definately would return and the net annual cost would be pretty darn low, relatively speaking for a 40-50k car, althought you'd have the cash tied up in it. One caveat, with the new M3 coming out, the prices are gonna drop!
  • blackcurrantblackcurrant Posts: 152
    I've found the independents will (at auction) step up and pay more than the franchise stores will for mainstream imports cause they just can't get 'em like the franchisers do! And, the highest prices are paid by the stores who sell the most cars, regardless of brand. One week it';s the honda store, the next the jeep one, all depends who had a good weekend!

    Domestics, well, yeah, they're a dime a dozen and the used car dept may pay more for clean lo miler.
  • im_brentwoodim_brentwood Posts: 4,883
    M3s? Oh yeah they hold their value!

    Only a rough/mileagey 95 will sell for under $20K at auction...

    That' a wholesale value of 60% After FIVE YEARS!

    Put it this way.. A 99 Coupe 5-sp with 27,000 miles, which is high, broke $35K in California at a sale...

    So if it's a decent mile car.. $39K sounds like a good price to me.

    Bill
  • audia8qaudia8q Posts: 3,138
    I was refering to customer trade ins...not auction cars. I dont know of many dealers who wont give a higher market value on same brand trades, especially if the car was also serviced at the dealership

    one thing to remember concerning auctions, the independant can't get into the brand factory sale....i.e. BMW factory sale for BMW dealers olny...new car dealers will generally buy factory only sale cars to fulfill most of the inventory and only buy "open auction" cars to supliment any week points. The factory sale cars are on an average 300-700 higher than the same open auction car...but they can be used car certified and warrantied, and as of late low rate financing.

    Rich
  • blackcurrantblackcurrant Posts: 152
    Yes, so when a decent popular car comes as an open off-lease the independents many times have to pay MORE for LESS!

    Also, sometimes you can find even an independent willing to pay more for, say an explorer, than the ford franchise if he needs it.

    When selling to a dealer you need to find one who wants/needs it just as you would selling to the public.
  • mmcbride1mmcbride1 Posts: 861
    Thanks, guys. I'm not going to get anything until probably next summer, just wanted to see where the market was now. Hopefully the '01 M3 takes some of the pressure off those prices. I guess we'll see. Both those cars were CPO by BMW (includes 6 yr/100k b to b warranty), so I guess the prices were about right...
  • blackcurrantblackcurrant Posts: 152
    Of course you could use the old standbys: end of month on rainy day during slow period (vacation season). After all, it IS a used car! There are also regional effects.

    In Santa Fe NM, the BMW dealer doesn't sell ANY convertibles. So, if you want a new convertible, they'd sell it cheap to move a unit.

    But, as far as used M3s go, i'd bet the NEW M3 will cause them to depreciate somewhat. It's GOT to. The engine is MUCH more powerful. There'll be a bunch of M3 loyalists trading in their old ones.

    For the money you're talking on the used M3 you could prolly get a new 330i sedan or coupe! It's gonna feel very close to the current M3.
  • jaclazjaclaz Posts: 37
    Again Thanks for the info offered, SO....which cars beside any 4 wheel drive SUV or truck bring high $$$?? There was a time when Saturns were invincible like the Passat seems to be now, are Golfs and Jettas also high return? Diesels? 1.8Turbo? VR6's? VW's use to be mechanical nightmares, how times change... Do all Limited, loaded vehicles return a better % than non-leather, no sunroof, no 16" wheels? Or do they sell faster yet return poorly on dollars invested? Is the vette the only domestic to retain value? (besides 4wd trucks) Do all vehicles which are in rental fleets have poor resale? Name some vehicles the masses can own and see very low depreciation.

    Thanks, Jack
  • SpyponderSpyponder Posts: 128
    I saw you mentioned Cabrio a few posts back, so I thought I'd give your topic a whirl.

    How about a '99.5 Cabrio GLS, Green, 5-spd, 7K miles, CD-changer? I hear that these babies have gotten hot since VW started running the Cabrio commercial, so I'm thinking about trading up.

    Thanks
  • im_brentwoodim_brentwood Posts: 4,883
    That's worth some money actually..

    My Guess is that it ought to be worth $18,000 to perhaps $18,500 on a wholesale level.

    Green isnt the best color, but its not bad.

    Depends where in the country you live though...

    Bill
  • pat455pat455 Posts: 603
    Hanging around this place is really making me want to buy another new car!

    :-)

    Last April I bought a 99 Acura TL, Laguna Green, no nav, no other options except mud flaps, wheel locks and (of course) mats. It is in excellent condition, less than 7500 miles. What do you suppose I could either trade it in for, or sell it?

    Thanks, great topic!

    Pat
    Community Leader/Maintenance & Repair Conference
  • jackfactorjackfactor Posts: 25
    My wife and bought a 99 Explorer Eddie BauerV6 4wd with no moon roof on the A plan from Ford because her sister worked for Ford motor credit at the time. We would have never bought it if we had not gotten such a sweet deal. We paid just under 29,000. The sticker was just over $34. I was shocked when checking out Edmunds market value for our car with only 15,000 was just over 22,000. I look in the Sunday Milwaukee Journal Sentine each week and have seen only one Eddie 98 for sale in the last month. Thay are hard to get used here until they come off of lease. I find it hard to believe that this SUV in this market has a market value of only $22+ after 15,000 miles when the 2000 with really no changes is selling for over $30. Especially when the 99 has an updated look over the 98. We probably will not sell it - but we had toyed with the idea while gas prices were insane (still high) in Milwaukee.
    What is a realistic trade- reatil udes value for a 99 EB explorer in Deep Wedgewood Blue 4WD V6 with no moon roof?
  • im_brentwoodim_brentwood Posts: 4,883
    I did some checking on yoru SUV...

    Your advantage is that it's a V6 (Im assuming leather here!) Problem is, right now SUVs are "stiff" as we say in the car business. In other words.. on the used level, there's a whole lot more of them than there are buyers. The gas prices hurt, as you know. Deep Wedgewood doesnt help, but it doesnt hurt. I think it may be worth closer to $23K on trade.. and about 25,900 "real" retail. Remember, there's incentives on SUVs that werent't in place a year ago, and this hurts them.

    I did see that a 12K mile Wedgewood one sold for under $22K though...

    Also, there are a whole lot of them out there right now, unlike Pat's TL, there are not hard to come by I'm afraid.

    You'd really be better off holding on to it instead of trying to trade it. And the way the market is on SUVs.. it'll at least be worth the same money 3 months from now, then you may be able to get closer to $23K for it without a problem. Right now Edmunds seems to be on the money im afraid. Anything over $22K in "real money" is more than fair.

    Bill

    Bill
  • blackcurrantblackcurrant Posts: 152
    I sincerely hope you all appreciate the info Bill is offering here. Whether good news or bad, it's accurate. Nice work, Bill.

    I have one for you....1995 camaro Z28, loaded with all but leather, t-tops, bose, power, etc. Only 28,000 miles. Paintwork in front but no frame repair or previous collision damage (i had a cracked front bumper cover replaced and a dented hood straightened) Interior is fine and finish is good. Mechanically straight. What say you?
  • I traded my '94 T-Bird SC for $2200 about six months ago. It was in excellent condition (body, interior etc), but had 136,000 miles on it.
    How did I do? I know it was much lower than Edmunds' valuation, but I didn't care because there was some expensive repair work coming due on it.
    Thanks,
    Dave
  • glenn384glenn384 Posts: 14
    I think the one thing that most often keeps car deals from being done in quick order is that customers always thinks that their trade-in is worth much more than it really is.

    A few years ago when I was going to buy my wife a Lincoln Continental (year old)I had a five year old grand caravan to trade in. I thought it was worth about 4-4.5 grand wholesale. A friend at work, who has access to the local auction data, looked up the recent auction sales, and similar vehicles were selling wholesale at 2.5-3 grand. Bad news, but reality sometimes hurts.

    That evening I was offered 3 grand for the vehicle, and the deal was done in less than a half hour. If I hadn't been clued into the REAL wholesale price for my van I would not have bought that car, that night. I would have wasted my time, and several other salesmen's time before I was convinced that the 3 grand was a good trade-in quote.

    Again, Thanks- Bill

    ...glenn
  • superman5superman5 Posts: 154
    i have 99 rx300 fwd,leather,sunroof,cd changer,memmory seat, roof rack, spoiler..20,000 miles how much is it worth?
  • mmcbride1mmcbride1 Posts: 861
    I think you got yourself in deeper than you bargained, eh? (No, I'm not Canadian, I just like saying eh).
  • im_brentwoodim_brentwood Posts: 4,883
    Hmm.. an odd one.. 28K on a 95 Z28..

    Since you used to go to auctions yourself, you know that a car like this can be tough to appraise. If it's really a supermin low-miler, and you get the right dealer on it.,. the sky's the limit for something like that.

    OK, I'll bite.

    My gut (which is usually very good) told me about $8500-9K... but "let's go to the videotape.."

    My money on the car, assuming paintwork looks good is about $11-12K That seems like what the low milers bring! Wow... But again, you never know on something like that... Also, is it a good color? If it's Pink, nobody's gonna step to that one!

    Bill
  • im_brentwoodim_brentwood Posts: 4,883
    Hmm,

    Well, you actually kinda got what I would have said.. a 6-year old, High-Mile supercharged Ford is scary...

    $2,200 might be a little light.. but not by a lot.. I mean, It looks like cars like your old one that hover around the 100K mile mark seem to trade in the mid-high $3Ks..

    So, if it wasnt all that nice of a car.. 2200 is a little light, but not terrible.

    Bill
  • mmcbride1mmcbride1 Posts: 861
    How about a 1998 4Runner SR5 4WD with every option except CD and moonroof and locking rear diff. Perfect condition, inside and out (only imperfections are two door dings the size of a pencil eraser, no dents). 27k miles.
  • mmcbride1mmcbride1 Posts: 861
    I live in Denver and my truck is Desert Dune color (sand).
  • mmcbride1mmcbride1 Posts: 861
    I appreciate it.
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