Trade In Value

[Midnightsun]

I alway wondered how much money the dealer makes when they buy your trade in from you. Well, they are asking $3000 more than what they gave me. They need to warranty it, prep it and I assume the buyer will negotiate so not all that much left over for profit at the end of the day. Not really worth the troubles of selling it to a private party if you ask me.

Was kinda nice to see my old ride on the carousel at the dealer.

 

[Mark_888]

They may not get the asking price anyway. However, it is always a little difficult to figure out how much they really gave you in trade when you buy a new car at the same time. But I agree, that trying to sell a car of that value to a private party is a real hassle, unless you just take it to CarMax or something (not sure they have those in CA).

 

[GenesisCaptain]

Dealers make an average of $1,800 on used cars.

 

[Midnightsun]

Dealers make an average of $1,800 on used cars.

Isn't that quite a broad statement? Depends on how old, compact or full size, high demand or low demand, great condition or crappy condition and even location. They certainly won't be making $1800 on an old Sunfire trade in, probably be happy just to get rid of it. most dealers auction off their trade ins and actually only keep the easily sold ones. I wonder how long it will take to sell my Gen 1, hmmm, any bets? I think it will sit there for quite some time.

 

[GenesisCaptain]

It is a broad statement. It is an industry average. And it reflects transactions from trade-ins as well as wholesale purchases. And it includes reconditioning needed to get a car front-line ready like dent wizards, tires, detailing, etc.. And it includes tough situations like when they get a car, the engine takes a dump, and they have to pour a grand or two into the car to sell it.

So, knowing that $1,800 is the average, and a good used Genesis is one they hope to use to pull the average back up. An asking price $3k above the paper value of your trade-in is pretty tight.

 

[DFWGenny]

Isn't that quite a broad statement? Depends on how old, compact or full size, high demand or low demand, great condition or crappy condition and even location. They certainly won't be making $1800 on an old Sunfire trade in, probably be happy just to get rid of it. most dealers auction off their trade ins and actually only keep the easily sold ones. I wonder how long it will take to sell my Gen 1, hmmm, any bets? I think it will sit there for quite some time.

If the car is crappy, the dealer will just wholesale it. That was figured into the trade-in offer/new car purchase price. I think the $1800 figure is if they keep the car and put it on the used car lot.

In Dallas, the used car market has been HOT for about the last five years. When people get car fever, sometimes all reason leaves the building. There have been cases where a clean 2-3 year old low mileage Honda Accord is listed for a few hundred dollars less than a new Accord with rebates and incentives. Being that the incentives are a moving target, it is a temporary imbalance, but there are some people that are so convinced that they get a better deal on depreciation that they have blinders on to new cars. For the most part, they are correct, but you can have anomalies with popular cars.

 

[jimb100]

Isn't that quite a broad statement? Depends on how old, compact or full size, high demand or low demand, great condition or crappy condition and even location. They certainly won't be making $1800 on an old Sunfire trade in, probably be happy just to get rid of it. most dealers auction off their trade ins and actually only keep the easily sold ones. I wonder how long it will take to sell my Gen 1, hmmm, any bets? I think it will sit there for quite some time.

In my experience the cheaper cars most often generate the profits. Its not unusual, in your Sunfire for example, to give $1000 on the trade in and sell the car for $3500. Remember, what they show the customer as the trade in value often bears no relation to how its booked.

Usually people looking for an inexpensive car are younger and have poorer credit than someone looking for a late model luxury car. The late model buyer will have more choices and more information.

Fewer choices and less information is the buyer dealers love.