Trade in Values tanking

[chicknwaffles]

sucker born every day

Sponsored

 

[zrickety]

i agree. however it seems dealers aren't wanting to deal on new either. might be a time to just sit on it.

I agree, the market has cooled and interest rates are high. Enjoy the Jeep, it is plenty big enough?

 

[KSwilly]

A year ago, Vroom and Carvana let their stupid algorithms drive used-vehicle prices through the roof. Since then, both have had to face the reality of the market and mounting losses. Carvana might still go out of business. Carmax, too, is seeing its profitability plummet.

Such is the used car business.

Hoping the same thing happens to Zillow, and rent/home prices do the same! (not holding my breath!)

 

[Windshieldfarmer]

My newphew works at Carmax. He said they have been letting people go and cutting hours like crazy. Car sales have been super slow.

Aside from slow sales, dealers are stuck with inventory that is rapidly decreasing in value. Let the great dealer purge begin!!!

 

[Ratbert]

Aside from slow sales, dealers are stuck with inventory that is rapidly decreasing in value. Let the great dealer purge begin!!!

Followed by more threads of people not understanding why their Jeep depreciates in value.

 

[chicknwaffles]

Followed by more threads of people not understanding why their Jeep depreciates in value.

Amen to the great dealer purge!!!

totally doubt that most dealers are going anywhere in the long run, except maybe carvana hahaha

And I think that you can only control depreciation in a couple ways, outside of that you have to ride the wave.

And those are!!


1. Don't be dumb and pay an ADM

2. Don't be dumb and pay sticker

3. Don't be dumb and pay anywhere near sticker


hahahahahaha other than sticking to what anyone on here knows is a good price. I'll say anywhere from 3 to 7% off invoice thats about as much as you can do.

All the people that paid more than that? Well, makes sense that the people to see the largest amount of depreciation are the ones that overpaid to begin with.

Waffles out

 

[Ratbert]

Amen to the great dealer purge!!!

totally doubt that most dealers are going anywhere in the long run, except maybe carvana hahaha

And I think that you can only control depreciation in a couple ways, outside of that you have to ride the wave.

And those are!!


1. Don't be dumb and pay an ADM

2. Don't be dumb and pay sticker

3. Don't be dumb and pay anywhere near sticker


hahahahahaha other than sticking to what anyone on here knows is a good price. I'll say anywhere from 3 to 7% off invoice thats about as much as you can do.

All the people that paid more than that? Well, makes sense that the people to see the largest amount of depreciation are the ones that overpaid to begin with.

Waffles out

That's an excellent point. I wonder how many of those people that are complaining paid MSRP+.

I paid MSRP for my first one, but I had no idea about the custom order deals available, and I wanted it that day.

 

[Whaler27]

Due to just needing a larger vehicle, I've been researching replacements for my 22 Wranger Rubicon XR. Stickered for 62k and I bought it for 58k last year.

I was offered 46k for trade from the same dealership I purchased from. That's painful depreciation for 7 month old vehicle.

The days of high used car values seem to definitely be over.

Yup — just as everybody over the age of 50 predicted they would. That 30 month period of COVID-induced supply shortage couldn’t last forever. And this is just the beginning. Just wait until dealer inventories are back to where they were in early 2019 and sales taper due to high interest rates and other financial pressures. We’ll see Jeep financing incentives and other goodies to keep the new units moving — and that will further suppress used values, as lots of people will continue to finance vehicles, even if/when new car financing climbs to 7%, 8%, or higher.

I told my kids to expect a 20% to 25% instant depreciation the moment they drive a new car off the lot IF they bought the car/truck/jeep right (well below MSRP), they’re not paying tax or other fees, and they didn’t buy one of the super-depreciators (like an Escalade, a big Mercedes, or….).

You always get screwed on the trade, of course, as the dealer will have a used car “pack” of $2,500 to $3,500 and expect to make money above that — even after showing the next buyer an inflated trade-in value for his trade.

With the exception of extremely rare vehicles, like the Ford GT for example, buying new vehicles and then trading them within two years has been a big money losing proposition for all but two of the last 60 years. The beating you’ve described is right in the range we’d expect today. It was MUCH worse when I went to trade my 8-cylinder CJ-7 in 1981, but that’s a story for another day. (It was gutless and heavy, but I wish I still had that one.)

 

[6.2Blazer]

Just as stated many times above, it's not that used car values are really "tanking" but rather just returning to normal. I bought my first new vehicle 20+ years ago and one of the first economics lessons learned was to expect a new car to depreciate by a significant amount as soon as you drove it off the lot. What occurred over the last couple of years was an anomaly.
Yes, used car and trade-in values were stupid high and did increase more than new car prices but in general you paid more for the new cars also. People were bragging about super high trade-in values but never mentioned the fact they were paying sticker prices for the new vehicles. Pre-Covid you were considered stupid to pay anywhere near sticker price for a new vehicle. I was shopping for a new truck in late 2019 just before Covid and still have the spreadsheet where I had all the price breakdown on. I had a dozen new trucks on it from multiple dealers within a 30 mile radius of me and the average advertised selling price was almost 20% or $12,000 below sticker. This was for a specialty package (Ram Power Wagon) that weren't that common either, and that was also what they advertised on the their websites and not including what you could deal them down on. Okay, so during Covid they gave you an extra $15k on your trade-in but everybody was paying sticker price with was $12k more. Yes, you saved some money overall but nearly as much as people were claiming.
In regards to what dealerships will offer you on trade-ins it has always been less than selling your old vehicle yourself. KBB and other sites have had different options for private sales versus trade-in values for as long as I can remember that reflected this. Why......simple question to answer. It costs dealerships a certain amount of money to take a vehicle in on trade-in. They have to pay somebody to do the paperwork, they usually detail it and do maintenance (oil change, brakes, etc...) and any other obvious repairs, pay to advertise it, pays taxes on it, pay a saleperson to sell it, and in the end need to make a profit. That obviously means that their selling price is the trade-in value they paid + labor for paperwork and maintenance + salesperson + advertisement costs + profit. Making a profit on it is the sole reason a dealership, or just about any other private business, exists.
As also mentioned above, one of the advantages of doing a trade-in at a dealership when buying a new car is that it reduces your taxes on the new car. If you are buying a $60k new vehicle and they give you $30k trade-in value you are only paying taxes on the difference. Depending on the exact tax rate of the area that can be worth thousands of dollars.

 

[Ron Texas]

I saw an article about used car prices which said overall prices had declined 14% year over year. On Edmonds true cost to own drive out depreciation on a Rubicon with a $66k transaction cost (includes taxes and fees) was $13k but the next 4 years were very low.

 

[CptFloridaMan]

Wonder if used rubi axles will follow the used car market finally lol.

 

[JINO]

So should I wait? I'm in the market for a used 2021.

 

[NChap89]

So should I wait? I'm in the market for a used 2021.

Why wait when there are dealers offering 7% below invoice on ordered units? You would be 2 model years ahead and paying very little more.

 

[NChap89]

If used car prices are going to fall and trade in values tanked. Then new car pricing needs to be more negotiable. Seems like dealers are wanting cake and eat it right now. Low ball the trade but sell new at MSRP or higher still claiming inventory woes.

Sell your vehicle on your own. Find a different dealer & place an order for 7% below invoice. No need to play their stupid games or you’ll end up like many others who overpaid (MSRP or more) for their Wranglers.

 

[chicknwaffles]

Sell your vehicle on your own. Find a different dealer & place an order for 7% below invoice. No need to play their stupid games or you’ll end up like many others who overpaid (MSRP or more) for their Wranglers.

Good advice for the majority I suppose. Some know how to navigate these waters no matter how their car gets gone. The tax credit on a trade in can also become a big factor.

no one ever wants to talk about the extra fees that go along with the purchase. tax is a bitch

Sponsored