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Trading in a car when buying a new one is not always a bad choice. Years ago, I was negotiating the purchase of a new car and the dealer asked if I had a trade-in. I said no, but they were persistent and offered to let me take the new car and honor the trade-in offer if I couldn't sell my old car within 30 days. It took most of that 30 days to sell the old car (a 2 year old Honda Accord) and I only got a couple of hundred dollars more than what the dealer had offered.
It's even murkier now. My state (Maryland) only requires you to pay sales tax (6%) on the difference between the price of the new car and the trade-in. You'd have to get 6% more on a private sale than you would on a trade-in to come out even.
Bottom line, it's not a slam dunk that trading a car in is always a bad thing. In the end, it's about nothing more than money and how much your time is worth. It's probably worth some effort for a person making $50K per year to put some time and effort into selling their old car to save a few hundred dollars. Someone making $300,000 may decide that the hassle of selling a used car to a private party isn't worth it for thousands of dollars.
In general, I've found that dealers tend to make better trade-in offers for generic cars or rare halo cars. Example: I traded in a 2 year old Honda Odyssey (generic) and they gave me within a few hundred dollars of what I paid for it new. On the other extreme, I was able to get 50% more from a private party than the dealer offered for a 2006 GTO. Dealers want cars they can turn over fast (generic) or draw showroom traffic (halo car). What they don't want is a somewhat rare car with limited appeal (GTO) car sitting around gathering dust for months.
Actually, I didn’t make a mistake. We didn’t sell. In fact, I was tempted to say to my son for $5500 I will buy it from you. In any event, looks like he is going to keep it. BTW, 09 Legacy is being retailed anywhere from 10K-12K.
If your car has more than $500 in resale value when you get rid of it, you haven't gotten your money's worth out of it yet. At that point, there is no one particular brand that is any better than the others.
Trading in a car when buying a new one is not always a bad choice. .
I agree!
I had a 10 year old vehicle that kept needing big ($$) repairs. Got tired of it (never really like it, tbh) and went shopping for new vehicle, since brakes needed replacing, transmission was starting to slip, antifreeze was leaking into oil, and electrical system was on the fritz....Dealer took it for a quick spin around the block and offered a very fair price! They could fix it for cost and the lemon was off my hands. Win win!!
Selling privately is such a hassle. Sure if you NEED to pinch every penny and have plenty of time to burn, go for it. But many people trade in simply for convenience. They want a good price of course, but it's incidental to the end game...a newer car. And trading in when your car has serious issues, is often the best option. I don't feel bad trading in a problem car to a dealer, but I would if i sold it to someone who I knew would be hurt by that information down the road.
If you don't drive cars till the wheels fall off it you should definitely consider it. I tend to get a new car every 2-4 years. By sticking to models that have good resale and reliability I have never been "upside down" on a loan when I went to sell it privately even when not putting anything down and just making regular payments. My wife on the other hand comes from a Ford family and she was always rolling in the last ford's loan leftovers into a new one before I got her switched over to a Toyota RAV4. Just a few years into that erased all that Ford negative equity baggage she had been dragging along ever since high school.
Who in the world ever buys a car for resale value???
Seriously?
Buy what you want.
Disagree, I've bought used cars all with high resale values and has allowed me to resold the cars for the same or close to the same price that I paid for. The best decision I ever made compare to buying cars with poor resale values and selling it later for a big loss.
They will ask $10-$12k for one, so if the dealer bought it for $5500, and had to put about $1500 into it for dings, chips, maintenance, repairs, new tires, inspection, brakes, etc., that's a basis of $7k in the car because they do not buy a car and put it on the lot for sale without any reconditioning.Perhaps reconditioning is not as extensive on that particular model though at 60k, I believe Subaru recommends a major service with new spark plugs, etc., and the timing belt is inspected, and could be that the dealer replaces it in order to get top dollar along with new tires, etc. I know a dealer who used to do this with vehicles that had a timing belt because they would sell it as having a new timing belt, so that "saved" whatever the retail price of the service was on that particular engine. And, an 09 is too old to be sold as a CPO, so there's less profit there from the CPO sale and additional sale of an extended warranty package, so the dealer will make the profit desired by lowering the trade-in value.
At an asking of $10-$12k, the dealer would likely sell somewhere in the range of $8500-$11k, depending upon how tough a negotiator, not leaving a huge profit after reconditioning, especially if there is limited appeal for the particular color and interior appointments of a given model in the market and it sells on the low end. Some Subaru dealers are notoriously crazy when it comes to asking prices, like $31k for a 2014 Outback wagon, when the 2016 is in the $33k range for the Limited 3.6, with no intention of selling at $31k, just giving the perception of a deal and that someone is a hard negotiator when they actually come to a price with that dealer.
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