Custom Ordering and trade in

[ThirtyOne]

If the sales tax in your state is high and you have a lot of equity in your current vehicle it may be worth the trade. But otherwise you are better off selling privately. It takes one variable out of the equation.

If you are doing a trade you should also get a CarMax quote as a backup but you should be able to get a better deal from the dealer.

If you can get them to agree on a trade-in at ordering time, then get it in writing with the odometer reading and how many miles you can put on it and still keep the deal.

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[Karl_in_Chicago]

I can't see many dealers willing to make a firm commit to a future price on an asset with varying value like a used car - especially for those that want/need to keep driving it. As ThirtyOne notes getting quotes from places like CarMax help establish a range for bargaining (and here in Chicago/Illinois with very high tax rates trade-in's definitely help) but you need to set realistic expectations about getting a firm future price for something they won't be able to sell for maybe 10-12 weeks if you are custom ordering. A lot can happen in that time span.

 

[ThirtyOne]

I can't see many dealers willing to make a firm commit to a future price on an asset with varying value like a used car - especially for those that want/need to keep driving it. As ThirtyOne notes getting quotes from places like CarMax help establish a range for bargaining (and here in Chicago/Illinois with very high tax rates trade-in's definitely help) but you need to set realistic expectations about getting a firm future price for something they won't be able to sell for maybe 10-12 weeks if you are custom ordering. A lot can happen in that time span.

I don't think it is unreasonablel for a dealer to say they can't quote a trade-in until the Jeep ships for example.

But some dealers will give you a quote when you order and I think it is just better for both sides to agree on what the conditions that trade is based upon so there are no surprises.

I almost factory ordered a 2016 Wrangler and the dealer was willing to quote a trade on my car at the time of my order but it was already high mileage so it wasn't going to make any difference if I put 3,000 more miles on it. Every situation is different.

 

[FPD]

I don't think it is unreasonablel for a dealer to say they can't quote a trade-in until the Jeep ships for example.

But some dealers will give you a quote when you order and I think it is just better for both sides to agree on what the conditions that trade is based upon so there are no surprises.

I almost factory ordered a 2016 Wrangler and the dealer was willing to quote a trade on my car at the time of my order but it was already high mileage so it wasn't going to make any difference if I put 3,000 more miles on it. Every situation is different.

Ordered Sahara JL on 1/19.got fair trade in value slightly above middle range of KBB trade in.obviously dealer has Mannheim auction prices which I don’t have access to. He took my car for a test spin and wrote the price on my purchase order. As long as I bring the car back in the shape it was in,
There was an expectation that I would probably have at least another 2-3 thousand miles on it assuming 8 weeks to delivery. It’s all up to the dealer, but I would get anything agreed to in writing.

 

[simpleJL]

Keep in mind - some states do not allow for a tax break for the trade-in value of the car.

California, for example, gives you $0 worth of tax deduction on your trade.

Just make sure you make the deal on the JL BEFORE ever mentioning or agreeing to trade-in a car.

 

[FPD]

My state had the sales tax credit so it was like getting another 1% off invoice ( already was getting 5% under). Agree with the poster above who says you will get more if you sell privately, however it depends on what that time is worth to you...had no desire to give a bunch of guys test drives while they are kicking the tires

 

[on--belay]

But no dealer is going to agree to pay a certain trade in price for 5-7 weeks down the line because the mileage and condition of your vehicle at that point is unknown.

Actually this is exactly what I just did. I was looking at a JLUR on the showroom floor, we negotiated pricing, established a trade-in value, and the last component was the soft top, I wanted to pay the difference between the dual top group and the hard top, they had no pricing for new soft tops, could not commit to that. We agreed ordering same vehicle with dual top and same discount was best option for both parties, they agreed to stick to their trade-in value, and just asked that I be mindful of the miles. They are good to deal with, and know that I will do just that, so my purchase order has the trade allowance and info all filled in with amount, and the mileage field is empty.

 

[Karl_in_Chicago]

Keep in mind - some states do not allow for a tax break for the trade-in value of the car.

California, for example, gives you $0 worth of tax deduction on your trade.

Just make sure you make the deal on the JL BEFORE ever mentioning or agreeing to trade-in a car.

Hmmm, never heard of a tax break for a trade-in, how's that work where they do offer it? Here we pay sales tax on the final price of the vehicle we are buying. So, say a $50K final dealer-price on a new car and a $20K trade-in we pay tax on $30K. Of course we pay insanely high taxes (9.5% for me) so every bit helps. That's why it's always important, here, to weigh what the dealer's offering vs a private buyer and evaluate the (potential) tax hit. There's a break-even point between getting more privately yet paying the tax-man more. Obviously with regard to taxes every state/county/city is different so it's important to know YOUR locale's specifics.

 

[simpleJL]

Hmmm, never heard of a tax break for a trade-in, how's that work where they do offer it? Here we pay sales tax on the final price of the vehicle we are buying. So, say a $50K final dealer-price on a new car and a $20K trade-in we pay tax on $30K. Of course we pay insanely high taxes (9.5% for me) so every bit helps. That's why it's always important, here, to weigh what the dealer's offering vs a private buyer and evaluate the (potential) tax hit. There's a break-even point between getting more privately yet paying the tax-man more. Obviously with regard to taxes every state/county/city is different so it's important to know YOUR locale's specifics.

You just defined the trade-in tax break. You don't pay the tax amount for the value of the trade-in.

In California, this doesn't exist.

 

[Karl_in_Chicago]

You just defined the trade-in tax break. You don't pay the tax amount for the value of the trade-in.

In California, this doesn't exist.

So what is your tax based upon then?

 

[simpleJL]

So what is your tax based upon then?

Purchase price of the new vehicle. No trade-in incentive. You pay the full price in taxes regardless of a trade.

This is why I sell private. The tax break would make trading it in worthwhile in other states, but I can't justify a $2k hit for a little bit of Craigslist hustle.

 

[Karl_in_Chicago]

Purchase price of the new vehicle. No trade-in incentive. You pay the full price in taxes regardless of a trade.

This is why I sell private. The tax break would make trading it in worthwhile in other states, but I can't justify a $2k hit for a little bit of Craigslist hustle.

Yeah, I googled in the interim - eye opening. Also don't get the benefit of rebates, etc. But on the PLUS side - you get to pay a 0.65% annual vehicle license fee on the value of your car! Thanks for this info, now I don't feel so bad for the crazy taxes here in Chicago, LOL.

 

[Jeepster2018]

Would suggest avoid trading, I have always managed to get more from CarMax than trading any of my previous vehicles.

Even several dealerships over the years have suggested, “take it to CarMax as they will always get you more than what we can offer”.

Always keep the transactions separate. Anyone who thinks they can get more on their trade than what they offer is only losing the difference on their new vehicle.

ive never custom ordered while doing a trade in. How does that work? Do I get something in writing for a particular mileage range of my trade in vehicle at the time of pick up in addition to the order deposit and paperwork?

 

[Dynomite1371]

Would suggest avoid trading, I have always managed to get more from CarMax than trading any of my previous vehicles.

Even several dealerships over the years have suggested, “take it to CarMax as they will always get you more than what we can offer”.

Always keep the transactions separate. Anyone who thinks they can get more on their trade than what they offer is only losing the difference on their new vehicle.

I went to Carmax they offered me 20k (2012 JKU mileage 95k). I went back to dealer after their initial 18, 500k offer I told them they have to do 20k on the trade.I allso told them that I went to Carmax and that I had the paper in pocket (never showed them). They said ok to 20k, which in Maryland, saved me 1k in taxes.(financing 30k vs 50k) So when you factor that in, it was like I got 21k for the JKU. The only caviat was I had to do the deal right then. And with JL delivery still weeks off I needed a vehicle to drive. So I made a call, secured a friend's spare vehicle to drive, while waiting for JL. With that tax break considered , I would have had to sell the JKU for at least 22k to get the same deal. And that's about the most I probably would have got from a tire kicker private sale (advertising it for say, $23500 and take 22k) . Not to mention, my JKU, bad in mileage was going straight to their auction. If I waited and they got inundated with used JK trades, the value would have dropped, and if went over 100k....... So the dealers' deal made sense did me financially. What if I got T-boned while trying to sell it privately.....!? All that positive equity.... down the drain. I put the whole nut down on the JLUR. I actually made money on the JKU, considering I only put one 3k down on it which was roll over positive equity from a Tundra trade (no money down on that one either!) . 3 cars later, and never coming out of pocket! Happy wife, happy life, Opps, I just dropped the mic...

 

[Karl_in_Chicago]

Would suggest avoid trading, I have always managed to get more from CarMax than trading any of my previous vehicles.

Even several dealerships over the years have suggested, “take it to CarMax as they will always get you more than what we can offer”.

Always keep the transactions separate. Anyone who thinks they can get more on their trade than what they offer is only losing the difference on their new vehicle.

You're stating absolutes which, IMO, is a mistake. It's going to vary based upon *where* the buyer lives and the various laws - especially those regarding taxes - that apply. Here the tax is based upon the *NET* price of the transaction. So getting just a *little* bit more in a private sale vs trade-in but then paying the 9.5% in taxes on the full price of the vehicle actually causes the buyer to pay MORE overall. "It depends" is the mantra here. The buyer needs to understand the specifics that apply to them, be able to calculate them, and identify where the knee in the curve is that defines break-even and then evaluate the trade-in vs private sale options against that. It's just math.

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