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Old 10-11-2006, 02:23 PM   #1
edkwon
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Default Question about buying new car and trading in old one.

If I wanted to purchase a new car and trade in my old one, but say my old one still has $1000 worth of payments left for example:

Most dealerships will take the car as long as you pay them the unpaid difference and they will take over payments and the bank will send the title directly to them, right?

Ed
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Old 10-11-2006, 02:24 PM   #2
Turk
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Quote:
Originally Posted by edkwon View Post
If I wanted to purchase a new car and trade in my old one, but say my old one still has $1000 worth of payments left for example:

Most dealerships will take the car as long as you pay them the unpaid difference and they will take over payments and the bank will send the title directly to them, right?

Ed
They will add the difference to the cost of the new car/
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Old 10-11-2006, 02:25 PM   #3
Grap
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^yup, your $23,000 car just jumped to $24,000
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Old 10-11-2006, 02:29 PM   #4
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Are we talking an extra $1000 on top of what it's worth or are we talking a straight $1000. Need some clarification.

Is your car worth we'll say $8000 and you owe $1000

Or is your car worth $8000 and you owe $9000
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Old 10-11-2006, 02:30 PM   #5
kev m
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Quote:
Originally Posted by edkwon View Post
If I wanted to purchase a new car and trade in my old one, but say my old one still has $1000 worth of payments left for example:

Most dealerships will take the car as long as you pay them the unpaid difference and they will take over payments and the bank will send the title directly to them, right?

Ed
Sorta, it depends on the value of the trade-in.

Honestly, trading is something to avoid unless you can afford to do it out of convenience.

Unless the dealer hides the money for a trade in an inflated sticker on the new car a dealer is going to only offer you the same on a trade as they could buy the car at for auction. This way they have a choice of either 1. blowing it out at auction or 2. selling it for a profit.

And since most dealers need to operate on margins in the neighborhood of $2k+ on used cars in order to make a profit, that means they are going to typically offer you a couple thousand less than someone will eventually buy that trade for (and that's where auction prices normally are, give or take).

So the best thing to do financially, is to advertise and sell your car privately.

What's the year/make/model and mileage of the car you are getting rid of?

You can check KBB.com for a reasonable assessment of value.

Kev
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Old 10-11-2006, 02:35 PM   #6
edkwon
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Originally Posted by kev m View Post

So the best thing to do financially, is to advertise and sell your car privately.

What's the year/make/model and mileage of the car you are getting rid of?

You can check KBB.com for a reasonable assessment of value.

Kev
Nope, it is my financial best interest to trade the car in, i do not have a 2nd car and plan to use tradein value as down payment as i dont have cash right now. Plus if i sold my car privately before getting new car, i have no means to get to work and support myself.

Ed
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Old 10-11-2006, 02:41 PM   #7
kev m
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Originally Posted by edkwon View Post
Nope, it is my financial best interest to trade the car in, i do not have a 2nd car and plan to use tradein value as down payment as i dont have cash right now. Plus if i sold my car privately before getting new car, i have no means to get to work and support myself.

Ed

No I think you're fooling yourself and making excuses to do what is convenient (not that I necessarily blame you, I've done that too, but that doesn't change the financial facts of the transaction).

1. If you sell the car privately for more than you owe, then you have a money for a down payment. If you trade-in a car for less than you owe, then you haven't actually MADE a down payment (and worse, you've actually managed to make in essence a NEGATIVE down payment).

2. If you sell your car privately, you simply need to have the new car ready to buy off the lot. I did this a week or two ago. Now granted, I had motorcycles to get around on, but the dealership where I bought the Baja needed a week to prep it (to install heated leather seats) and offered me a free loaner to bridge the gap until it was ready, if I wanted/needed it.

Now if you're thinking of having a car built to spec for you, well, that could get messy, but you'd be surprised what you can work out. Plus you could always advertise and TRY to sell it before the new one comes in and always settle for the trade at the end if need be.

EDIT - if you're talking about the 03 WRX - that would be a hard private sale, too expensive. Anything over 10k tends to sit on private sells because people typically need financing and it's just "easier" at a dealer.
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Old 10-11-2006, 02:53 PM   #8
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^ dont forget the tax credit on a trade in


IMHO its so not worth the hassle of a private sale
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Old 10-11-2006, 03:01 PM   #9
kev m
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Originally Posted by WRX300 View Post
^ dont forget the tax credit on a trade in


IMHO its so not worth the hassle of a private sale

That's a great point, HOWEVER, in many states (don't know where Edkwon is) the new car dealer will do a "courtesy transfer" and process the private sale for you, so that you STILL get the tax benefit on the value of the sale.

Of course, I sold a 98 Jeep Cherokee for $5k a few weeks ago and that only would have netted me a $300 tax value, and since that was still a cool $2k more than I could have netted on trade AT BEST, I didn't sweat it or do the "courtesy transfer"

But I coulda.

Only ed can decide on the hassle for himself, but $2k+ meant enough to me.

Kev



Ed, you never answered about what car, the 03 WRX? I assume you've already discussed trade-in value with some dealers and you're cool with the $1k difference in value vs. loan? If so, that's cool, I can certainly see where I'd be tempted. And if the value is still high enough on the X, then certainly sales tax savings may offset enough of that to make it attractive. You'd still make more money from a private sale, but I can see where I'd lean towards the trade for ease at that point.

Last edited by kev m; 10-11-2006 at 03:06 PM.
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Old 10-11-2006, 03:44 PM   #10
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its the 03 WRX yes, but heres another catch, i moved from PA to CA and i have NOT registered the car to Cali and in its current state will not likely pass smog or inspection, so the question is, how easy is it going to sell this car to a private seller in cali when they cannot even drive it around legally?

Another reason to go with tradein, cause the dealership wont give a crap about that and just sell it thru dealer auction anyway.

Ed
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Old 10-11-2006, 03:50 PM   #11
kev m
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Originally Posted by edkwon View Post
its the 03 WRX yes, but heres another catch, i moved from PA to CA and i have NOT registered the car to Cali and in its current state will not likely pass smog or inspection, so the question is, how easy is it going to sell this car to a private seller in cali when they cannot even drive it around legally?

Another reason to go with tradein, cause the dealership wont give a crap about that and just sell it thru dealer auction anyway.

Ed

Ouch.

So do I take it you've got lots of mods on it?

Since PA just decided to start following CA emissions I've been discussing this sorta thing with some CA residents. They swore up and down that you can bring in a non-ca compliant car, but I don't know what aftermarket mods do to the whole equation.

Have you looked into that yet?

So what are you buying???

Kev
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Old 10-11-2006, 03:53 PM   #12
edkwon
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Originally Posted by kev m View Post
Ouch.

So do I take it you've got lots of mods on it?

Since PA just decided to start following CA emissions I've been discussing this sorta thing with some CA residents. They swore up and down that you can bring in a non-ca compliant car, but I don't know what aftermarket mods do to the whole equation.

Have you looked into that yet?

So what are you buying???

Kev
Already put down a deposit on an 07 Legacy Spec B, im waiting for delivery this week or next.

Yes my car was modded up quite a bit and ive put most of the stock parts back, but still, why waste money and time getting that registered and THEN simply getting rid of it. makes no sense to me.

The best part is once i buy the car new in Cali, provided i dont go nuts on the power mods or make cops pull me over for visual inspections, i can bypass inspections and smogging for 5 years and basically do what i want with the car.

Ed
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Old 10-11-2006, 04:06 PM   #13
kev m
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Sounds like you're on the right track.

So what did they offer you for the X.... compared to say KBB trade numbers?

Kev
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