Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!





Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Did you get a great deal? Let us know in the Values & Prices Paid section!
Meet your fellow owners in our Owners Clubs

Stories from the Sales Frontlines

111121416173338

Comments

  • nonjth13nonjth13 Posts: 91
    I think previous posters may have covered the topic, but here are my .$02.
    Where I live sales tax on a new purchase is paid on the difference between price and trade value. If you are trading in a car worth $20000 that is $1650 right there
    For an inexpensive car, which I would peg at less than $4000, I would sell it myself because those are easy sales usually and I can demand cash payment.
    For a more expensive car there is no way I am going to deal with all those "buyers" who don't really have the ability to pay. I am not a dealer or a bank and have no desire to play one on television.
    By the same token, absent some extraordinary circumstance, I would not consider buying a private party used car. Sure you might get a good deal but you can also buy somebody else's trouble and have few avenues of practical recourse.
    So, oarsdad, what you are missing is that not everyone shares the same set of circumstances or values the same thing. For me, if I wanted to sell used cars I would go get a job at a car lot.
  • lmp180psulmp180psu Posts: 393
    I live in PA, and am in the process of trading in my 04 Mazda3 sedan for a 06 Mazda3 hatch, and I wanted to know how the taxes would work in my situation. Say for example I get $12,500 (realisitic per Terry :) for my trade, and owe $8500 on the loan. Since the tax rate is 6% would $750 ($12500 * .06) be subtracted from the taxes, or would $240 (positive equity of $4000 * .06)be deducted?

    Now of course this may not make a difference if PA isn;t as state were this situation would apply :blush:
  • div2div2 Posts: 2,580
    I'm fortunate in that I have a reputation for being obsessive about the maintenance and repair of my vehicles. As a result I'm almost always able to sell a car quickly- and for a good price. I've only traded in two cars in the past fifteen years. Here are the gory details:

    1973 Bavaria 3.0- Sold in 1990 to the service manager of the independent BMW shop I use. Time on market: 2 days

    1987 Scorpio- Sold in 1991 to a co-worker for $2500 over best trade-in offer. Time on market: Zero- buyer asked me if I wanted to sell it.

    1987 535is- Sold in 1992 to a friend. Time on market: Zero. The buyer had made me a standing offer to buy the car whenever I wanted to sell it.

    1991 740 Turbo- Traded in 1994 on a 1993 Pathfinder SE for $1200 more than lease buyout. I must have made a good deal, as the car sat on the dealer's lot for over two months...

    1988 M6- Sold in 1995 to fellow BMW club member. Time on market: 1 day.

    1984 Thunderbird Turbo Coupe- Sold in 1998 to the owner of my son's day care. Time on market: Zero. Buyer asked me if I wanted to sell it.

    1998 318ti- Traded in 2001 on a 1997 528i for $1000 over auction price(according to Terry in Real World Trade-In Values). This was one time when the deal was so good that it wasn't worth selling it myself.

    1993 Pathfinder SE- Sold in 2003 to the owner of the previously mentioned BMW shop. Time on market: Zero. I mentioned to him that I was putting the truck up for sale and he said "I'll take it."

    1997 528i- Sold in 2005 to a customer of that same BMW shop. Time on market: five days. The car had 130K miles and four accidents on Carfax-which I disclosed. The selling price was double what Carmax offered. FWIW, I talked to the buyer about a month ago; she still loves the car.

    I've never bought a newspaper ad, though I did list the M6 in the local and national BMW CCA classifieds.
    The reason I was selling the 5er was because my wife wanted an SUV(so that she could negotiate our 1/2 mile gravel farm road in inclement weather). We narrowed the choices down to two very different vehicles- a 2004 CPO X3 and a 2005 Xterra Off Road. My BMW salesperson agreed that I'd be much better off selling the 5er myself. At the Nissan dealer my salesperson was excellent, but the Sales Manager popped in and pressured me to trade the 528i. Even though I explained that I had a buyer and that the sale was a done deal, he still insisted on reciting a litany of problems that could befall me if I tried to sell it myself(yes, he wanted a deal TODAY!!!). The guy's attitude really ticked my wife off, and he probably wound up costing his store the sale.
  • montztermontzter Posts: 72
    Same with us here in Ohio. The amount we receive for trade-in of our used car towards a new one is exempt from sales tax.

    My example: My 2006 Civic with mud guards and all weather floor mats stickered for $18,058. My trade in had an NADA retail value of $12,900 and an NADA trade-in value of $11,100. Buying "retail to retail" as I call it, I received $12,498 for my trade in towards the sticker price of $18,058. So, the total "value" of the trade was $13,373 including the tax savings.

    I could have purchased the new Civic outright for about $16,688. That means I would have had to get about $11,900 out of my trade to make it an "equal" deal. Even if the car is detailed and I take the time to advertise, show, sell, etc, chances are I won't get the $12,900. Most people shopping cars from individuals won't pay top dollar. So even if I would get $12,400, the extra $500 I would save would not be worth it, especially if the car did not sell for several months.
  • jlawrence01jlawrence01 Posts: 1,828
    In addition to Golic's litany of sorrows:

    1) People who set up an appointment to drive your car and don't show up.

    2) People who "test drive" the car with NO INTENT to buy.

    3) People who cannot come up with the cash for the vehicle so you sit there for 2-3 days.

    4) The person who buys the car and then harasses you when a minor problem arises in a car with 150k miles.
  • stickguystickguy Posts: 32,910
    if you get a tax credit (some states don't give it, NJ does), it normally is on the trade value. What you owe/your equity has nothing to do with it.

    SO, new car = 18K, trade value =12K, tax is on the 6K difference.

    2019 Acura TLX A-spec 4 cyl. (mine), and 2013 Acura RDX AWD (wife's)

  • lmp180psulmp180psu Posts: 393
    Thanks for the explanation :) By my calculations, if PA is one of the states that gives a tax credit, I would save about $750 on taxes :shades: (New car is 21K, trade-in 12.5K )
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 15,415
    I understand where you are coming from. In almost every case one is better selling their car than trading it in. But doing a trade in offers more convince for the new car buyer. Is it worth the extra cost? Thats what each person has to ask themselves.

    2008 Sebring Ragtop, 2011 Hyundai Sonata, 2015 Honda CTX700D

  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 15,415
    Every car I ever sold I never had any of these issues. FWIW the only time I ever heard from anyone who bought my used car was when a friend bought it.

    2008 Sebring Ragtop, 2011 Hyundai Sonata, 2015 Honda CTX700D

  • golicgolic Posts: 714
    Div-

    And in all these cases you used your network of friends and contacts to sell these cars. All a smart move. When I was looking for my last car, I did the same thing and drop the message I was selling my car let me know if you are interested.

    I think what you describe is what most people should do, send an email to your address list, talk to people in Moms club, etc, etc...

    I think the air of caution is people salvating over the "private party" value and then going out and selling to a completely unknown stranger.

    Many people invest hours finding the best price on the new car and then when it comes to the trade in, pull two appraissals and get into arguments with the dealer.

    My approach was to go out and get "real" offers. Like Carmax which will give you a quote good for 7 days/300 miles and you brought up some great ideas of hitting your network of friends and car dealers you had a relationship with.

    Now, you have some real offers in your hand and have essentially turned the table on the dealer and put him in a match position versus and offer position.
  • bdr127bdr127 Posts: 950
    In addition to Golic's litany of sorrows:

    1) People who set up an appointment to drive your car and don't show up.

    2) People who "test drive" the car with NO INTENT to buy.

    3) People who cannot come up with the cash for the vehicle so you sit there for 2-3 days.

    4) The person who buys the car and then harasses you when a minor problem arises in a car with 150k miles.


    Sounds like what salespeople at dealers go through every day.... :P
  • biancarbiancar Mid-AtlanticPosts: 965
    I'm a female, and I've always sold my cars myself. I haven't traded in a car in all my car-buying and selling history, going back to 1975. Never had a problem of any sort. I always asked for a certified check.

    Sometimes I met people near the DMV office, so we could do the title transfer easily. My cars were always both well-maintained and paid off, so there weren't any issues of trying to get the title transferred on a non-paid for car. Usually I sold to one of the first people who showed up in response to the ad, as the cars were always priced fairly (less than dealer prices, more than what I would have gotten on a trade-in) and again, were in good condition, so they were a good deal for the buyers.
  • jimbresjimbres Posts: 2,025
    With all due respect, I think that you're making this more difficult than it has to be.

    In my neighborhood - a middle-class NYC suburb - plenty of folks are looking for an affordable & reliable 1st car for their about-to-reach-driving-age offspring. We also have 50-something guys shopping for a station car so that they don't have to leave their precious Boxsters in the railroad station parking garage. If you have a well-maintained vehicle that you're willing to sell for $10K or less, you can find a buyer within 2 or 3 days - simply by letting it be known that you're ready to sell. There's no need to pay for ads or deal with strangers. My experience has convinced me that the demand, at least in my area, for realistically priced good used cars far exceeds the supply.

    Now this may not hold true for you if you live in a sparsely populated area or if you're looking to get rid of something that's pricier, but I can't help suspecting that my experiences aren't unique to my area.

    I'm not saying that I'll never again trade in, but I won't offer my car to a dealer without 1st seeing what the local market will pay me for it.
  • jipsterjipster Louisville, KentuckyPosts: 5,722
    Couldn't agree more oarsdad. I've sold all the vehilces I've owned private party and haven't had a bit of problem. One only exercise caution and good judgement. Where a lot of private party sellers make a mistake is pricing their vehilce to high. Then they end up with all the problems listed above.

    On your 2001 Ody, as an example...it has a $13,000 trade in value and retails at $18,000. If you had placed an ad in the paper and listed it as $14,000, how long do you think it would last? Probably a day or two, and you selling it to the first or second potential buyer...with little effort or cost, you come out ahead $1,000(forget the $200 detailing, do it yourself)
  • snakeweaselsnakeweasel a Certified Edmunds Poster.Posts: 15,415
    I always asked for a certified check.

    You may not believe this but I have seen certified checks and money orders bounce. In both cases it was the issuing orginazations blunder that caused it to happen and they made good on it, but they bounced just the same.

    2008 Sebring Ragtop, 2011 Hyundai Sonata, 2015 Honda CTX700D

  • bdr127bdr127 Posts: 950
    I always asked for a certified check.

    You may not believe this but I have seen certified checks and money orders bounce. In both cases it was the issuing orginazations blunder that caused it to happen and they made good on it, but they bounced just the same.


    There's also the recent "trend" of fake bank checks... conterfeit or forged....
  • british_roverbritish_rover Posts: 8,458
    Yup just cause a check is certified funds does not mean it cannot bounce.

    Once I clear some more stuff off my desk I will continue my story and add another.
  • stickguystickguy Posts: 32,910
    For an older/cheaper car, selling private makes the most sense. Dealers don't want it, so the really low ball (usually), plus the tax savings are neglibible. And they are usually paid of (title in hand), and most people can scrape up the cash.

    On newer/more expensive cars, it is less clear. They can be harder to sell (you are competing against dealers now), you often have to deal with a payoff to get a title, buyers have to finance, and the sales tax credit is more significant.

    I have sold many cars myself, and traded in 3 (I think). Most expensive private sale was about 10.5K (a Miata), couple others about 8K.

    In each case, the deal made sense. A Voyager that they offered way more than I expected (as much as i would have listed it at private) which I didn't want to do since it had "issues"

    My tC made sense, because i got high end trade value, and I doubt I would have gotten much more private, certainly not enough to offset the 1Kish tax savings. Plus having to deal with all the people that needed a loan, etc.

    I also traded in a maxima, largely because they offered more than I expected, although I really should have tried to retail it 1st, but I didn't have time at that point.

    In other cases, I got a trade offer, it was too low, so I sold it myself.

    Each deal is different.

    2019 Acura TLX A-spec 4 cyl. (mine), and 2013 Acura RDX AWD (wife's)

  • oarsdadoarsdad Posts: 64
    geo9,

    running to the bank to pay off
    the balance of loan you may have, waiting for a new
    title or release of lien, putting up with the joyriders,
    strokes and looky loos.


    I had not thought about the loan payoff and release of lien. All of my cars have been paid for when I sold them, but obviously that is not always the case. As for the joy riders, that's one of the things I would put up with for $300/hour (in my example).

    My guess is the number of joy riders one would get is in direct proportion to how fun the car is to drive. If true, then us minivan sellers are probably immune from the joy riders. :)

    Thats where Mr Dealer comes into play and EARNS that $$$.
    He can provide full financing, warranty, etc.........


    True enough. I guess the dealers don't care much for my type given I have no trade in, don't finance through them, and purchase my cars at invoice.

    Even though they make money on the trade in's - Last month I had a Toyota salesman strongly encourage me to not trade in my Camry. He said to put it in the paper and it would sell in 1-2 days.

    David
  • qbrozenqbrozen Posts: 25,946
    If you had placed an ad in the paper and listed it as $14,000, how long do you think it would last? Probably a day or two, and you selling it to the first or second potential buyer...with little effort or cost, you come out ahead $1,000

    You're forgetting the tax penalty and cost of the ad. So now you're down to ~$150 for all your time and effort.

    and that's exactly the point I was going to get to with the first poster. First of all, you're example uses a Honda Odyssey. VERY few cars are as in demand and easy to sell. Second of all, the KBB values mean absolutely nothing. We need to look at the real-world market.

    If you are a savvy shopper, you can easily get a vehicle from a dealer for $1500-$2000 over wholesale (ie, trade-in value). SO, on a typical vehicle with a trade-in value of $13000, you could get that from the dealer for $14,500 ... but let's say $15000. I'm not a dealer, I don't have the exposure, I don't have the resources, I don't have the ability to back my products. As such, I must be cheaper than a dealer (hence, private party value). I find that PP and Retail differ by about half the profit. SOOO... that leaves a price somewhere around $1k over trade-in value ... maybe $1500 if you're lucky.

    As stated above, once you subtract advertising, detailing, signage, tax penalty, blood, sweat, and tears, I do not find it worth it when dealing with a more expensive vehicle. ON a cheaper vehicle (let's say under $10k), its a different story.

    '18 BMW 330xi; '67 Coronet R/T; '14 Town&Country Limited; '18 BMW X2. 47-car history and counting!

  • mac24mac24 Posts: 3,910
    Sadly, I think it's because it offers the path of least resistance. I don't think that the average reader or poster here is representative of the average car buyer.

    It's just my opinion, but I think the average customer is interested in only two things.........1: how much new car can I get for the lowest possible monthly payment?....... and 2: how quickly can I get it?

    A 'trade in' represents the easiest and quickest way for most people to get behind the wheel of that shiny new car! :shades:
  • oarsdadoarsdad Posts: 64
    golic,

    I think you are too cavalier over the safety issues

    It was not my intent to brush off safety as a "female only issue". In fact, now that I think about it, your safety point and the fake payment issue are the two on your list I would be the most concerned about. However, for me, I'm willing to take those risks. Like snakeweasel said in post #412, it's ultimately up to the individual.

    I'm sure if I had ever had a safety scare when selling a car I would transform to being a "trade in'er". I think its similar to when your wife is pregnant. There are a million things that can go wrong but, most of the time, they don't.

    to put up a forum for how to sell your car on your own...I think the information would be invaluable

    I agree. It would be a good way to get some ideas on safety during test drives(short of carrying Mr. Smith and Wesson)etc..

    David
  • oarsdadoarsdad Posts: 64
    jipster,

    Actually I sold it to the first customer who came by for 16K, so I ended up 3K ahead, minus the sales tax credit I didn't realize($780) = about $2200. I realize, like gbrozen said in post #424, the Ody is easier to sell than some other vehicles. For me, with this particular vehicle, it was a no brainer.

    David
  • oarsdadoarsdad Posts: 64
    I appreciate all the responses. They have helped me understand the opposing side of this topic.

    Thank you,
    David
  • qbrozenqbrozen Posts: 25,946
    Congrats on the $16k!
    You did OUTSTANDING! I don't know where you live or the details of your vehicle, but an '01 Ody EX with average miles (~60k) is only an $11k-$11.5k trade-in here in the northeast.

    '18 BMW 330xi; '67 Coronet R/T; '14 Town&Country Limited; '18 BMW X2. 47-car history and counting!

  • oarsdadoarsdad Posts: 64
    Thank you. It was clean, miles = 39K.

    David
  • kdhspyderkdhspyder Posts: 7,160
    You identified the basic concept perfectly. There is about $3000 difference between trade-in and retail. Each person makes their own calculation whether the $3000 is worth the effort.

    It's one of the most basic capitalistic concepts in our business world - whichever party does the work should get the benefit.

    You sell it - you get $3000 less costs
    You trade it - the dealer gets $3000 less costs.
  • kdhspyderkdhspyder Posts: 7,160
    The posts about straw purchases brought back one of our best stories ( not a great ending ) that should have been on one of the 'Dumbest Criminals' show.

    Young guy & his father trade a 5-Series Bimmer into us on an SUV. The Used Car Mgr, does the normal walkaround and drive and runs the VIN through CarFax. All clean. The transaction is done on a Saturday when it's JAMMED.

    Monday we put it through the shop on a Used Car PDI and whoaaaaa!!!! The VIN on the dash doesnt match the VIN on the engine.... or the VIN on the frame!!!! This vehicle was assembled in plants all over the SouthEast. :surprise:

    Well we call the guy, but lo and behold he suddenly shows up back at our store on Monday to get something he forgot in his Bimmer. 'Could you hold on, sir while we get the vehicle ( Call to Fraud Dept of the State Police Barracks 600 yrds away )'. The showroom is swamped by 4 cruisers and 10 officers. The alleged perpetrator is taken away for questioning and his SUV is left in our lot.

    That night his father comes by and demands to collect his SUV which he signed for and financed properly. Whatever issues we have with his son and the allegedly chopped Bimmer ( father was not on the BMW title ) has nothing to do with him and he wants his SUV now. We dont give it to him but a few days later his lawyer does come and collect it. We are out $15000 which was the trade-in value.

    Do not attempt this at home. These are trained professionals on a closed course.
  • One Last Story.....

    When I sold VW, I sold a car to a lady who bought it with fake info. She bought a Used Beetle and brought her son with her, and even let us take a picture of her with the car!

    Well, once we found out that her social was fake, and her down payment check was on a closed account we, attempted to repo the car. My General Manager wanted to save some money so he had US take the parts truck to repo the car, and we went to the hotel she was supposedly living in. (She was on the Lam and even her family gave her up) We did not see the car, but we went to her door and try to just get the car back and we would not press charges. I sat in the truck because I really wanted nothing to do with the whole deal, and the son answered the door and sicked a pit bull on my coworker.

    Then we found out From the Pasdadena Auto Theft Task Force, that she was part of a Auto Theft Ring. They caught her, the Beetle had already been chopped, and we proscuted and she got 3 years in the POKEY!!!
  • bdr127bdr127 Posts: 950
    Call to Fraud Dept of the State Police Barracks 600 yrds away )'. The showroom is swamped by 4 cruisers and 10 officers. The alleged perpetrator is taken away for questioning and his SUV is left in our lot.

    I realize that the car was made up of many different cars' parts, but to play devil's advocate and to give them the benefit of the doubt.... they could have just bought the car like that from someone else and not have known. I mean, someone else might have been the "evil doer." :confuse:

    If you were rather naive and didn't know anything about cars, I'm sure you could have bought a car from a private party or mom-n-pop lot like that.... and then get burned later like that customer.
This discussion has been closed.