Negotiating a Trade In for a Vehicle

[EngineerYogi]

My DH and I are looking at reducing some of our debt and luxury and trading in our 2013 Toyota Tundra for something significantly smaller, like a Toyota Yaris, Prius, Honda Fit, or Scion xD. We owe $15,650 on the loan, the truck is valued at roughly $30k. If we were to go to a dealership and pick out a pre-owned vehicle priced for 14k or less we should theoretically be able to pay off our truck loan and walk away with a "new" to us car and no payments. Is it also possible that they could end up paying us the difference?

Am I reading into this correctly? Any suggestions, recommendations, or similar experiences?

[AZDude]

The dealer will want to make money, so they will buy the truck at far less than market value. Best bet is to sell it privately, then buy the next vehicle with the funds. Even renting a car for a week will still be better than trading it in.

If you are set on trading it in, you can get a written estimate from CarMax to know about where you stand.

[mtn]

Is there a reason you don't want to sell it outright? What is the Bluebook trade in vs. private party value? I'd imagine you could price it in the middle of the two (Private Party value and Retail) and get a quick sale, while still coming out ahead of a straight trade in.

Anyways, go to CarMax, find out how much they will give you. Keep that number in your back pocket as a negotiating tool.

When you find the car you want, see how much they'll give you in trade with the Tundra. There isn't going to be a lot of negotiating room on the trade in; you probably can use it to bring the price down on the car you're buying though. For me, it would be easier to have two separate transactions.

[neo von retorch]

I took a more expensive car (2 year old SUV) to a dealer to buy a less expensive car (6 year old hatchback). They mailed me a check.

However, as many have said - you'll get a lot better value by selling it on your own. It's less convenient, but significant enough to be worth the effort.

I went in with the best of intentions in negotiating, and I didn't fail completely, but I still gave up more than I should have, and when I saw what they listed the SUV for...

[redcedar]

IF your state charges sales tax on vehicles, determine if your trade-in reduces the sales tax on the car that you are purchasing. Using your example of say 15k equity and buying another vehicle for 15k, you may pay very little sales tax, if any. It that case, it shrinks the difference between private sale and trade-in.

Do you have a CarMax close to you? If so, have them appraise your Tundra. They will give you a value that they will pay and a few days to think it over. Compare that to the time and effort (different feelings here for different people) of private sale. If you are thinking trade-in, go to the dealer that has the car you want to buy and ask them first to give you a value on the Tundra. If terrible, ask them to match CarMax or leave. If great, take it. If in the middle, compare to CarMax and decide.

[MsPeacock]

I had a good experience recently with trading my clown car in at Carmax. Due to the value of the car and listings on Craigslist, I found what Carmax offered to be a very good offer, above KBB private sale. They will buy your car regardless if you are buying another from them. I did purchase s car from them and saved on sales tax as PP mentioned.

[EngineerYogi]

Good suggestions this is the amplifying information:

California sales tax is 7.5%

our current loan is through Toyota at 1.9% I imagine if we traded that in at the Toyota dealership it's highly likely they'd make more money on anyone else financing it because they'd have a higher interest rate than we do

KBB values private sales at 32k and trade in value at 30k

So, I will get a CarMax quote and go from there.