Dealerships Low Balling Trade in Value

[Atcer2018]

I was told by a Ram salesman

No dealership will take in a vehicle that is 7 years old
The dealership sometimes will take in a vehicle in great shape, when it is older, i assume he was referring to a 5 year old vehicle.

The thing is, if it takes up room on the used vehicle lot for over a month, they are losing money.
Then that vehicle goes to an AUCTION, so they can cut their losses

Excellent point! I’ve been told by local dealers that any vehicle over 5 years old goes to auction unless it’s remarkable in some way. I’d imagine a top of the line 8 year old vette with less than 20k miles or a ten year old Shelby mustang would be remarkable. Other than that they are just vehicles. Was also told that vehicles heavily optioned or stripped bare are more desirable than average equipped vehicles as used buyers want top of the line or bargain basement. No doubt it varies by geographic area but something for consumers to keep in mind.

 

[oe542bob]

Bought quite a few new trucks and cars over the years, recently bought a Challenger roughly 8 months ago. Dealerships in my experience first look at what your vehicle average wholesale value is at the time of trade. They get the information by checking dealer auction sites. Normally don’t care what you added, how much wax or ceramic coating you have on it.
They check what year, make, model and mileage. Now if you have visible damage, or they discover a mechanical problem, that works to lower the trade value.
I’ve almost always traded as I usually have equity and here in PA, you can offset sales taxes with your trade value. If you want to sell it yourself, yes you MIGHT get more, but remember that you aren’t in the business, so if you have a clear title, that will make a private sale much easier.
The only time trade value exceeded the real value was when Covid was going on. Those days are long gone by now. I look at KBB.COM or equivalent and put in the information to get a BALLPARK trade value. It’s never what YOU think it SHOULD be. Dealerships do this everyday, it’s their game.

 

[Scottly]

I look at KBB.COM or equivalent and put in the information to get a BALLPARK trade value. It’s never what YOU think it SHOULD be. Dealerships do this everyday, it’s their game.

Good information, but I will add that KBB tends to be high, and they sometimes lag behind market conditions. And in myexperience, trading every 2 years, dealers quote below KBB, so you have to negotiate that upward....Unless you have a used car manager that's fuming with the new car manager, so he will force his trade values low and make the new car guys eat the gross to make the sale.

 

[markabby]

as goes the auto market, so goes the housing market.

be ready financially

 

[zrock]

Covid is over the top $$ for used is gone and they are giving peanuts for trade. Went to trade my 2015 sport in on a new and they would only give me 1/2 of what i purchased it off them a year prior. Dodge is the only dealers that have had consistent stock over the last few years and now they are stuck with inventory. WHile every dealer in my area had next to no veh our dodge dealer always had a full parking lot.

 

[Dean2]

I just bought an 8 year old car, from the dealer of that make, that had less than 50,000 miles for $34,000 Canadian. The car is absolutely pristine. New, the MSRP on that car was $130,000, the same model today is $152,000. The guy that sold it, ate $100,000 in depreciation, and ponied up another $120,000 to replace it. This car will run to 400,000 miles with no issues.

The question I have is, why do you guys want to sell a 4 to 8 year old pickup with next to no miles on it, and pony up another 50 or 60 thousand, just so you can say you are driving a new vehicle. You really want to do yourself some good financially, drive what is now a $15,000 vehicle, and invest the 50 grand.

Alberta is the most prosperous of the Canadian provinces, highest average income, and new vehicle sales are off quite a lot from their heyday in 2015. Population has grown by over a million people in the past 10 years, so the drop in sales is a direct result of the rapid inflation in new vehicle prices.

 

[Docwagon1776]

I was told by a Ram salesman

No dealership will take in a vehicle that is 7 years old
The dealership sometimes will take in a vehicle in great shape, when it is older, i assume he was referring to a 5 year old vehicle.

The thing is, if it takes up room on the used vehicle lot for over a month, they are losing money.
Then that vehicle goes to an AUCTION, so they can cut their losses

My local Ram dealer has roughly 60 vehicles on the lot that are 8 years old or older, with a 1990 being the oldest. How would your salesman explain how they got them?

*Some* dealerships will only deal in newer vehicles at certain price points. Many more will want to have a wide variety of prices available to capture more customers. More customers equals more people in the F&I office. More people in the F&I office means more kickbacks on financing, warranties, tire shine packages, pinstripes, and whatever other dealer enriching questionable value things they can tack on. Got to churn to make money.

 

[stevenP]

Local dealer here was over stocked on 2500s, so they were taking 18-20k off recently. Otherwise the prices are just too high to even think of buying new.

 

[Treburkulosis]

15k wow. You are better off selling it out right, but then you have to deal with all of that. I have a really good sale lady who sold me my Flex and she said they are struggling bad. This is a very big Ford lot as well. It is definitely not a sellers market unless you have a 98-02 low mile trans am.... Those cars are now north of 30k.

 

[GTyankee]

Docwagon1776

In my immediate area, within 50 miles of the City of San Diego,
there are 9 Dodge Dealerships.

Competition is rough.
My dealership has very few Used Vehicles & most of them are Jeeps

10 miles East of me, there are 75 miles of rocky hills & then 100s of miles of sand

That is why Jeeps sell so well here

 

[Scottly]

The question I have is, why do you guys want to sell a 4 to 8 year old pickup with next to no miles on it, and pony up another 50 or 60 thousand, just so you can say you are driving a new vehicle.

The same reason I only wear Swiss-made mechanical watches, and not an inexpensive but perfectly good Casio....Because i can. Different strokes for different folks.

 

[Dean2]

The same reason I only wear Swiss-made mechanical watches, and not an inexpensive but perfectly good Casio....Because i can. Different strokes for different folks.

Yes but ypu aren't likely complaining about the trade in value or the cost of the new one. As the old saying goes, if you have to ..............

That and a second hand Rolex does not save you as much percentage wise, as buying a used luxury car. They generally go up in value and greatly so if you are getting into the older collectible ones. So just because I can was never a good arquement to me to just waste money. Those of us that made our own know the value of a buck, those that inherited money, not so much.

 

[Docwagon1776]

Docwagon1776

In my immediate area, within 50 miles of the City of San Diego,
there are 9 Dodge Dealerships.

Competition is rough.
My dealership has very few Used Vehicles & most of them are Jeeps

10 miles East of me, there are 75 miles of rocky hills & then 100s of miles of sand

That is why Jeeps sell so well here
View attachment 546942

There's 18 CJDR dealers within 50 miles of where I'm sitting right now per Dodge's dealer locater. 19 if you're willing to fudge 1/4 mile. That doesn't really change the conversation of the veracity of the salesman's statement.

We're not talking about how much competition We're talking the difference between "No dealership will take in a vehicle that is 7 years old" and "some dealerships ..." Saying no dealership is patently untrue, many make significantly more money churning used vehicles than they do new and a 7 year old car is 'younger' than the average vehicle on the road.

Taken to the extreme during COVID, a reasonably significant number of dealers would add additional ADM to vehicles if you didn't have a trade since they were losing that profit center during the car shortage.

 

[BenchTest]

The financials of the current U.S. as a whole need to be hit with an auto-correct. Things in general are WAY out of line in cost vs. income. Cars, trucks, houses, groceries, gas.... I think there's going to be a major upset in a few weeks/months. Some things are going to come crashing down I believe.

 

[Scottly]

Yes but ypu aren't likely complaining about the trade in value or the cost of the new one. As the old saying goes, if you have to ..............

That and a second hand Rolex does not save you as much percentage wise, as buying a used luxury car. They generally go up in value and greatly so if you are getting into the older collectible ones. So just because I can was never a good arquement to me to just waste money. Those of us that made our own know the value of a buck, those that inherited money, not so much.

I come from po folks, so I understand the value of a dollar....And for the record, those of us in horology have a saying: "Rolex is the watch that poor people think rich people wear".

 

[markabby]

I just bought an 8 year old car, from the dealer of that make, that had less than 50,000 miles for $34,000 Canadian. The car is absolutely pristine. New, the MSRP on that car was $130,000, the same model today is $152,000. The guy that sold it, ate $100,000 in depreciation, and ponied up another $120,000 to replace it. This car will run to 400,000 miles with no issues.

damn....what kind of car is that, that's worth that much and can go 400k miles?

My dealer sends me a text, saying they want good used trucks and are willing to pay 20 to 30% over current market value...if i buy or lease a new one. My 2020 has just turned 25k and i'm happy with it, so, i passed.

 

[zrock]

I just bought an 8 year old car, from the dealer of that make, that had less than 50,000 miles for $34,000 Canadian. The car is absolutely pristine. New, the MSRP on that car was $130,000, the same model today is $152,000. The guy that sold it, ate $100,000 in depreciation, and ponied up another $120,000 to replace it. This car will run to 400,000 miles with no issues.

The question I have is, why do you guys want to sell a 4 to 8 year old pickup with next to no miles on it, and pony up another 50 or 60 thousand, just so you can say you are driving a new vehicle. You really want to do yourself some good financially, drive what is now a $15,000 vehicle, and invest the 50 grand.

Alberta is the most prosperous of the Canadian provinces, highest average income, and new vehicle sales are off quite a lot from their heyday in 2015. Population has grown by over a million people in the past 10 years, so the drop in sales is a direct result of the rapid inflation in new vehicle prices.

usually when you find a deal like that there is a back story to support the issue. It may have been a dealer buy back due to how much trouble the customer was having with it and they eventually fixed the problem and then pawned it off on the next person.. Their is no way someone ate that huge of a loss their is always a back story just your dealer did not tell you why they had it for that price.

 

[Dean2]

usually when you find a deal like that there is a back story to support the issue. It may have been a dealer buy back due to how much trouble the customer was having with it and they eventually fixed the problem and then pawned it off on the next person.. Their is no way someone ate that huge of a loss their is always a back story just your dealer did not tell you why they had it for that price.

Well, you are entirely wrong about that. A 2015 model of my car sells for between 30,000 and 40,000 depending on mileage. I have the full service history. If you don't think luxury cars devalue at a hell of a pace, check what a new Mercedes S class sells for new, then what you can buy one for 5 years old with 20-30,000 miles. Third example is 8 years old with 42,000 miles, now down to $70,000, so have eaten $236,000, $5.62 of depreciation for every mile travelled.

Take a look at the examples below, all three are from Autotrader listings. Same make and model, one new, one 5 years old. That is $205,000 in depreciation in 5 years, and $236,000 in 8 years. Just because you can doesn't make it a good idea, but buying lightly used sure does save a ton.

2024 Mercedes-Benz S-Class AMG S 63 E 4MATIC​

90 km | Calgary

$306,427
+ GST and costs associated with financing


MSRP $306,427

Now, same car 5 years old, 43,000 Klms, which is about 27,000 miles.

2019 Mercedes-Benz S63 AMG 4MATIC® Exclusive Pkg! 20" Wheels!​

43,043 km | Vancouver |
Request free CARFAX History Report

$101,963
+ TAXES & LICENSING

And a 2016 had depreciated even more.

2016 Mercedes-Benz S-Class 4dr Sdn AMG S 63 4MATIC​

66,860 km | Coquitlam |
Request free CARFAX History Report

$
69,888

 

[Nickx86]

Private sale your truck then go back to the dealer with financing in hand. 2 years ago you could have gotten a lot for your trade it. When my truck got smashed up in 2022 I was paid way over what I bought for it but my new truck only got 3k off MSRP so it basically a wash

 

[nlambert182]

usually when you find a deal like that there is a back story to support the issue. It may have been a dealer buy back due to how much trouble the customer was having with it and they eventually fixed the problem and then pawned it off on the next person.. Their is no way someone ate that huge of a loss their is always a back story just your dealer did not tell you why they had it for that price.

German cars in particular drop value like a rock so I don't doubt what Dean2 is saying. Most luxury cars do, with exception to a lot of the "supercars". I paid about a 1/6th of the price of a new Audi when I had mine.

Go price a Maserati new versus 2 years old. They practically give them away.