Author Topic: Trade in clown car to dealer or sell privately?  (Read 7051 times)

SimpleGuy

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Trade in clown car to dealer or sell privately?
« on: November 26, 2014, 03:41:36 PM »
Iíve been trying to sell my 2013 Toyota 4Runner for the past 3 months but have had only one serious inquiry. I was going to try and go car free but for a number of reasons (Iím not tough enough, possibly a bit lazy, and my ebike doesnít work when the temp drops into the teens) I think Iím going to abandon that route and get another car. So Iíve been checking the car ads for the past week or so and came across a 2006 Kia Rio5 with 64K miles for $7,595 and it looks to be in very good condition. But the dealer has it almost $2K over KBB value and they will likely low ball me on my trade in (I had it appraised last spring and they valued it $2-3K below KBB). Iím willing to take a bit of a hit, maybe $1-2K, on trade in just to get rid of it and get a good car in return but am less inclined if itís a bigger loss.  Should I hold out and keep trying to sell my car privately if they appraise it a lot lower or bite the bullet and get rid of the clown car?

Thanks in advance for your advice.

paddedhat

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Re: Trade in clown car to dealer or sell privately?
« Reply #1 on: November 26, 2014, 04:49:30 PM »
My experience has been that it's really tough to sell a vehicle once you hit a certain price point where the typical buyer needs financing, and the typical buyer can't or won't go the extra mile to get a loan on a FSBO vehicle. I would definitely trade it in, or sell it to another dealer. That said, I would bargain hard on both ends of the deal, and not overpay for a replacement car because the trade value is clouding the deal.

I would do the following. IF you have enough cash, find the car you want and buy it. Dealers make money on financing, so they are often less than impressed that you have cash. However a straight cash deal for the car you want keeps the trade from muddying the water here. Now take the Toyota to the car buyers at every place you can find in town. Get a firm number from everybody and see who will make the best bid. If the Kia is still in play, your trade offers can be used two ways. First, you can ask the dealer to match your high offer.  If they refuse, then ask them to do a "pass through" trade. This is a process where they are rolling the trade over to the high bidder that you found. This is uncommon, but I have done it twice, an it made me a ton of money. It's really a good technique if you live in a state with high sales taxes, since it wipes out the tax burden.

In one case I bought a fully loaded Suburban from a VERY high end luxury/exotic dealer. I paid a little over half what it was worth, since they were horrified to have it on their lot, and just wanted auction value for it.  The problem was that they lowballed my trade by about $7K. I had a much better offer from a dealer in another state who specialized in my trade (diesel pick-ups). I actually delivered my trade to a dealer five hours away and shuttled the cashiers check and title back and forth. In the end I came out about $16K ahead on that one. In another case a dealer took a pickup of mine and did a pass through on the purchase of a motorhome, and saved me $1800 in sales tax. By the time I handed him the keys he had flipped it to a local Chevy dealer. Good luck and don't forget that the only way to come out on top is to think about this transaction exactly the opposite way that the dealer wants you to. That being that you are doing two completely separate things here, selling an SUV and buying a small car. Since I appears that you have no sales tax, there is no compelling reason that both deals have to be done at once, or with the same dealer.

DollarBill

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Re: Trade in clown car to dealer or sell privately?
« Reply #2 on: November 26, 2014, 05:49:11 PM »
Quote
Iíve been trying to sell my 2013 Toyota 4Runner for the past 3 months but have had only one serious inquiry.
What price did you put in the add? Compared to KBB? You might be able to lower it and still be better off then the trade-in.

Quote
My experience has been that it's really tough to sell a vehicle once you hit a certain price point where the typical buyer needs financing, and the typical buyer can't or won't go the extra mile to get a loan on a FSBO vehicle.
I agree but I would do my best to stay away from stealerships. If I had to use one I would go with Car Max or True Car.

SimpleGuy

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Re: Trade in clown car to dealer or sell privately?
« Reply #3 on: November 26, 2014, 10:14:01 PM »
What price did you put in the add? Compared to KBB? You might be able to lower it and still be better off then the trade-in.

Currently I have it priced for $1K less than KBB but when I first listed the car I matched the KBB value.  I also indicated in the ad that I'm willing to negotiate.   

The_path_less_taken

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Re: Trade in clown car to dealer or sell privately?
« Reply #4 on: November 26, 2014, 10:37:14 PM »
Put a link in your ad to the current KBB and Autotrader value, or insert the price with a link below it.

If you have time...it's also nice to know your competition. Car dealers use a site called vAuto which will tell them EXACTLY how many of that precise vehicle (including options) are available in surrounding towns...here in northern NV the dealers will say something like: "There's only one other vehicle like this and it's 250 miles away, so I'm not coming down on the price."  Unless you can get a dealer to tell you that...you might have to just use the search function on craigslist in neighboring towns to get that info.

Since you also want another vehicle, you could also state: "Willing to do a partial trade for a xxxx." in the ad.

(I briefly worked as a photographer for a car dealer. Worst job of my LIFE.)

paddedhat

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Re: Trade in clown car to dealer or sell privately?
« Reply #5 on: November 27, 2014, 04:00:05 AM »
The other thing to mention is that pricing services like KBB can be totally full of shit. Around here the dealers value trade-ins by searching the weekly results online from the regional, weekly Manheim auctions. That sets a real value, based on what their competition paid for similar units within the last few days. The other thing I see on lots is that some dealers will post crazy retail KBB numbers on used cars, then discount them right on the sticker, or try to get you to negotiate from a very high number because it's "worth" that much because KBB says so. As a recent example, I bought a used Scion TC for my kid. It was at a dealer who had a large detailed KBB printout on the side window testifying that it was worth $17K. They were running an online ad that was offering a blowout price of $13,995. I called and told then if the car was as good as they claimed, I would be there to day to inspect it, and then present them with a bank check for $12,800. total price, out the door. However, this was a take it or leave it offer, and they had to accept it before I would even bother leaving my house. They accepted, and sold me the car for $11,900 with the balance being tax and tags, for a total of $12,800.  In the end the vehicle sold for $5100 or 30% LESS than the alleged KBB retail.
IF you find a private buyer for your SUV you will probably end up with a figure that's a few grand less than a dealer is going to get. Putting a price on it that the least bit inflated is going to do little to help the situation.

Monkey Uncle

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Re: Trade in clown car to dealer or sell privately?
« Reply #6 on: November 27, 2014, 04:50:48 AM »
Seems to me like a dealer might be reluctant to do a trade where they end up paying you money (presumably your 2013 4Runner is worth a lot more than the 2006 Kia).  I would expect that they are going to seriously low-ball you on the trade.  But you don't really know until you go to the dealer and give it a shot.  Before you walk in, do your homework and know the minimum you are willing to accept for your trade and the maximum you are willing to pay for the Kia.  Keep in mind the difference between these two numbers.  The dealer may play games with the prices to make it look like he's giving you a great deal on either the Kia or your trade.  Pay no attention to the individual numbers - focus on the difference.

tarheeldan

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Re: Trade in clown car to dealer or sell privately?
« Reply #7 on: November 27, 2014, 05:57:02 AM »
Is there a Carmax nearish? They treat both sides as individual transactions a bit better

rtrnow

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Re: Trade in clown car to dealer or sell privately?
« Reply #8 on: November 27, 2014, 06:09:44 AM »
Carmax can be a good option for getting a "fair" price. Theirs is not the best price either buying or selling but is ok and the process is easy and low pressure. One small(ish) thing to put in you calculations is that you generally save on sales tax when trading. Since you're trading down, you wouldn't pay any.

Personally I have sold several cars with prices above 20K on my own. It takes a little time but the right buyer has always come along. Usually it has been someone using a work credit union or military personnel. I actually sold one luxury car to someone who withdrew from his 401K to buy it. It was hard to watch someone making such a stupid financial decision but I needed to sell that car.

SimpleGuy

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Re: Trade in clown car to dealer or sell privately?
« Reply #9 on: November 27, 2014, 10:10:22 AM »
Is there a Carmax nearish? They treat both sides as individual transactions a bit better

I though about CarMax before.  Unfortunately, there aren't any in Alaska. 

The_path_less_taken

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Re: Trade in clown car to dealer or sell privately?
« Reply #10 on: November 27, 2014, 10:43:11 AM »
Is there a Carmax nearish? They treat both sides as individual transactions a bit better

I though about CarMax before.  Unfortunately, there aren't any in Alaska.

Ah...Alaska. OK...not as many options as down here. If you're in a hurry...it can be tough to get someone to pony up the cash but I've sold a newish truck just sitting in it with a sign at the grocery store in Anchorage. You're past the time for snowbirds to fly south.

It might pay you to put up fliers in places. Are you near a military base? I'd probably trust military/firemen/troopers to make payments, with a written/notarized contract.

But make sure you top list in craigslist every day for free. Just open your add and then repost it so it scrolls to the top. In addition to whatever copy you're using, but similar things in there: 4x4, four wheel drive, winter driving, reliable, dependable, traction...these can all be below your ad. If you notice the dealer ads, they'll be listing a Ford Escape but they'll also below that have a huge list of similar cars/features so if someone does a search, their car will come up even though it's not that model.

Good luck!


Forcus

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Re: Trade in clown car to dealer or sell privately?
« Reply #11 on: November 27, 2014, 11:01:07 AM »
You're in a tough situation. Most consumer sukkas, which (no offense) would be the type looking for a newer SUV, will be financing. I would wager to say that as a rule, most people finance through the dealer and are loathe to arrange it separately, which means your relatively new and expensive SUV has a tougher go again even a higher priced identical vehicle at a dealer.

I second or third that KBB / NADA values are often out there. I'd say too especially since you are in Alaska and I'm not sure it takes regional differences in to account.

Here's what I'd try since you already tried CL (right?) with no result:
1) See if the dealer with the Kia gives you a decent trade in. You never know..
2) See if a Toyota dealer will buy it straight up. If it's clean and low mile, they may take it as an easy sale and offer you a fair amount since they can essentially just put it on the lot and mark it up.
3) List on eBay & Autotrader & Cars.com. No guarantees but sounds like you need exposure. Also I believe people looking on eBay are more likely to be willing to purchase through eBay and ship.

neo von retorch

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Re: Trade in clown car to dealer or sell privately?
« Reply #12 on: November 28, 2014, 08:01:07 AM »
You have to be patient if you want to get the absolute optimal cash. Maybe I'm a bad person to give advice because sometimes I'm ready to stop spending my time and just get it done! But I still want to share my story because I did something similar to what you have in mind. I had a 2013 Mazda CX-5 and I wanted a 2008 Honda Fit. I've sold cars in the past but was not wildly confident that I could easily sell a late model car. I took at look at what dealers were selling used versions of my car for, as well as Nada, Black Book and KBB prices. (I like Nada best. KBB can be way low or way high compared to the real world.) Then I found the car I wanted... conveniently being sold at the "Number One Certified Pre-Owned Mazda Dealer in the State" - so I went in and negotiated as well as I could to get a solid value knowing my car matches exactly the kind of car they want sitting in their CPO lot. And then I negotiated some more to get the used Fit down to where I wanted it. Of course, I ended up with a purple car, but I kind of see that as a badge of honor since I also got a really big ass check in the process.

As has been mentioned, in some states, you can deduct your trade-in from your net purchase and only pay sales tax on the difference. When trading down, you pay no sales tax at all. I don't know if this applies where you live, but it can make a difference. For me, it was only a $600 difference, so if I could've gotten $600 more from selling privately, that would've been better. And I probably could have but it would've taken effort, probably some cars.com/vehix.com fees, some patience and some nerves to deal with potential buyers driving your car around the local back roads. Plus I would've had to either buy the car I wanted first or go without a car after selling the old one while finding a new one. Does convenience justify the money you lose? Not really, but it's a consideration.

Glenstache

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Re: Trade in clown car to dealer or sell privately?
« Reply #13 on: November 28, 2014, 09:56:05 AM »
If it takes you 40 hours of effort selling private party and you end up getting $2k more, you just got paid $50/hr for your efforts. Keep that in mind when weighing your level of comfort dealing with PITA people you will encounter selling a vehicle on CL. For the type of vehicle you are selling you will lose a lot of money going through a stealership. I did a trade in on my last car knowing that I would lose a couple of hundred bucks. However, that car was worth so little by the time i got rid of it that I would have lost money relative to going to work for the hours it would have taken to sell private party, so it was a better deal for me.

As posters above have pointed out, a number of potential buyers will need to finance the purchase. You might also offer people a $50 credit if they finance through the bank or credit union that you use (which also makes the transaction much easier for you). Say explicitly that you will be patient and work with people while they work out the financing. Also, note that the demand for used cars is pretty variable and the level of interest will vary week to week.

SimpleGuy

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Re: Trade in clown car to dealer or sell privately?
« Reply #14 on: November 28, 2014, 12:12:55 PM »
I don't think I'll have a problem getting $2K more selling privately than trading in.  What worries me is how long I'll be holding on to the 4Runner and the possibility of selling it and then not being able to find a replacement shortly thereafter.

SimpleGuy

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Re: Trade in clown car to dealer or sell privately?
« Reply #15 on: November 29, 2014, 12:08:31 AM »
I went to the dealership to check out the Kia Rio5 and a 2012 Mazda2 earlier today.  I also had them appraise my 4Runner and they gave me a pretty fair quote - $29,000.  I was expecting $1-2K lower because there seems to be a glut of 4Runners at the dealerships right now.  The $29K was based on trading in the 4Runner for the Mazda2, which they have listed at $9,995.  I'm tempted to go with the Mazda2 because it's a certified pre-owned vehicle and gets a 12 month, 12K mile bumper to bumper warranty plus whatever is left on the powertrain warranty (about 4 years I think).  With the equity in the 4Runner, I can get the Mazda2 for $3,600. 

SimpleGuy

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Re: Trade in clown car to dealer or sell privately?
« Reply #16 on: November 29, 2014, 09:59:55 PM »
And the 4Runner is gone.  I traded it in for the Mazda2.  Paid the $3,400 balance and own it free and clear.  Phew!  Feels great to get rid of the car payment.   

Rangifer

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Re: Trade in clown car to dealer or sell privately?
« Reply #17 on: November 30, 2014, 01:10:12 AM »
Time to go buy a set of blizzaks!

Glenstache

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Re: Trade in clown car to dealer or sell privately?
« Reply #18 on: November 30, 2014, 09:48:04 AM »
Congrats on getting rid of the car payment and moving into something you own free and clear.

SimpleGuy

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Re: Trade in clown car to dealer or sell privately?
« Reply #19 on: November 30, 2014, 01:48:39 PM »
Time to go buy a set of blizzaks!

I definitely need to get a set of snow tires, just not sure which kind.  Do you have experience with Blizzaks? 

Rangifer

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Re: Trade in clown car to dealer or sell privately?
« Reply #20 on: November 30, 2014, 02:57:42 PM »
Blizzaks are definitely the best. I run the Hankook i-pikes and they are perfectly fine as well.

Unless you live out in the sticks you'll probably be alright with any the major name brand's winter tire.

neo von retorch

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Re: Trade in clown car to dealer or sell privately?
« Reply #21 on: December 01, 2014, 06:21:03 AM »
Congrats on the bump in net worth :)

paddedhat

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Re: Trade in clown car to dealer or sell privately?
« Reply #22 on: December 01, 2014, 09:13:03 AM »
Blizzaks are definitely the best. I run the Hankook i-pikes and they are perfectly fine as well.

Unless you live out in the sticks you'll probably be alright with any the major name brand's winter tire.

Jump on the Tirerack.com  website and read the reviews and testing. IMHO, the best value out there is the General Arctic Max, extremely highly rated and substantially cheaper than the top brand stuff. BTW, when the manufacturer tells you that they should be installed in sets of four, they are not BSing. My first attempt at using quality modern winter tires was a set of Blizzaks on the front of a FWD V6 sedan. The car was undrivable, as the fronts stuck to the snow like they were welded, and the all seasons on the rear would loose traction and allow the car to spin out.

Forcus

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Re: Trade in clown car to dealer or sell privately?
« Reply #23 on: December 02, 2014, 11:32:45 AM »
Congrats!! Quite a change.