[macroy]

Ok - perhaps a dumb question. But let's say you are looking to buy a car (in this case, a lifestyle change) and you are trading in your current car. What is the likelyhood that the dealer will take your trade-in if its worth more money than the one your are buying from them? My thinking is that they have no incentive to do that... but some of my friends say that a dealers' profit margin is actually higher with used cars sales than new car sales... so if they think they can make more money... they'll do it.

Comments?

[mduell]

If you have a car that valuable, why not sell it private party? You'll get a better price than trade-in.

[Railroader]

Your friends are correct. In reality, "trade-in" is a misnomer. What is really happening is that they are buying your car from you cheaper than they can sell it. They clean it up, advertise in more places than you would, and make more selling it than you would.

Basically, consider trading in your car and buying a new one from them as two completely separate transactions.

The only time they will give you more for your used car than it's worth is if it will facilitate the sale of a high profit car that they wouldn't be able to sell otherwise.

You'll (probably) make more selling the car yourself. It's not a lot of work, and the profit is much greater and gives you more leverage going into the dealer with cash on your pocket. The only problem lies if you have a car that has a soft market. If demand is low for your model, you might not be able to sell it as fast as a dealer might.

[CreepDogg]

One other thing to consider is that in many states, you only pay sales tax on the difference between the value of the new car and the value of the trade-in. In this case, that would be zero because your trade-in is worth more than the new car. Not sure if that applies in Maryland.

However, most of the time you can still do better selling it yourself. If the difference between what you would get selling it and what you would get trading it in is MORE than the full sales tax on the new car, you're better off selling. This is usually the case.

But - the tax savings can help soften the blow if you don't want to deal with the hassle of selling your car.

[ghporter]

If a dealer is reputable, they should take ANY worthwhile car as a trade in/purchase from buyer. When I got my last car, my dealer worked like this: they appraised my old car and made me an offer on paper-they'd buy it outright if I wanted, or as part of a new car sale. They offered me a lot more than I expected for a 9 year old car (over $4k!) and I bit! That made my new car much easier to afford and made me an even more dedicated customer.

[Railroader]

Originally Posted by CreepDogg 

One other thing to consider is that in many states, you only pay sales tax on the difference between the value of the new car and the value of the trade-in.

That would be awesome! It's certainly not that way in Michigan.

[olePigeon]

So you're trading your Gremlin in for a 2-stroke scooter?

[CreepDogg]

Originally Posted by Railroader 

That would be awesome! It's certainly not that way in Michigan.

Yeah. It is in Illinois. It almost makes it too easy to be lazy about selling your car. I've done this a couple of times when the tax savings is worthwhile.

I know it's that way in Illinois and NY. For a while I was shopping dealers around the US for a new car, and the NY dealer I was working with implied that it was the case in many states. I suppose if I was less lazy I'd look it up

[centerchannel68]

Sell your current whip on craigslist dude. It's great.

[scaught]

Originally Posted by ghporter 

If a dealer is reputable

HAHAHahahahhahahaha,.

Ok. So really, what should he do?

[Railroader]

Originally Posted by scaught 

HAHAHahahahhahahaha,.

Ok. So really, what should he do?

We have an VERY reputable Chrysler dealer here. He's amazing. Goes above and beyond what you pay for. Most people work for GM around here and drive GM cars, but a few will buy Chryslers just because he's such a great guy and offers amazing service.

I have ALL of my maintenance and bodyshop work done there.

[scaught]

^
Not saying it's impossible, but probably more the exception than the rule.

[Railroader]

Your post implied there were no reputable dealers. I was simply stating I have experiences that contradict that.

You make a asinine post, expect to get called on it.