Trade in Values tanking

[TheRaven]

Everybody has different experiences with this and I'm definitely not saying you are wrong. Just from my own personal experience (both on my own vehicles and helping out several friends or family members when buying new or used vehicles from a dealership) both the trade-in values and the vehicles they were selling had comparable prices to what many search engines and other websites had listed. Granted they will always start out with offering you less for the trade-in and more for the vehicle you want to buy but some quick negotiations usually brings the offers within reason....and if not I just walk out. The biggest thing you need to keep in mind that the condition of the vehicle they want to trade-in makes a difference, and everybody thinks that THEIR vehicle should be in the 100% perfect and excellent shape category. The difference between "excellent" and "good" condition trade-in can be thousands of dollars. The reason friends and family often ask me to check out a vehicle on the lot, especially a used on for sale, is that I'm a "car guy" and can identify a lot of potential issues and determine the overall condition of the car by inspecting it and a test drive (I don't claim to be an ASE certified mechanic but worked in the automotive engineering and testing field for years and car have been a hobby since I was a kid). I can't count how many times people I know think their car is "excellent" but I have to tell them it's really not.

I will also say that most of my experience was all pre-Covid so things may have changed, though I have been involved in the purchase of 2 vehicles since.

I am very similar to you - friends and family call me to go car shopping with them so as a result I have far too much experience with it. And frankly i'm getting tired of doing it even for myself. But I can't remember the last time I was able to get close to the supposed KBB value for a trade. One of the big problems I face is that i'm almost always seeking out a very specific build or a very rare version that only one or maybe two dealers have. So I don't often have the luxury of ACTUALLY walking...I have to make the dealer believe that I have other options even though I don't.

And you and I both know there is no such thing as an "excellent" trade. If it's like new, it's "good" condition. Anything less is "fair" condition. My personal cars are pristine, I get compliments from amazed dealers every single time I go shopping...but I value even my own cars at "good" condition and then subtract at least $2k from the online estimate.

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[JeepOffroadTech]

dealers always have the option of keeping them on the lot or sending them to auction. so same brand is not typically a gigantic consideration

Some floorplans require dealers to take a markdown loss on vehicles at auctions instead of retail sales.

 

[Jlhens03]

KBB and JD power do not take into account the XR package when giving value. You can. It select that as a option. I was offered 45k for my XR by a jeep dealer. It has 20,225 miles and stickered for 68k when new. They are just looking at rubicons and saying that’s what rubicons are going for they aren’t comparing apples to apples with the XR package and in turn we are getting screwed even worse than a standard rubicon owner.

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.

 

[CT_LFC]

Values seem to be going up. A few days ago carvana offered me $41K for mine, a 2019 JLUR with 41K miles and i paid $46K for it. Offers had gotten below $40K over the past few months.

 

[guarnibl]

KBB and JD power do not take into account the XR package when giving value. You can. It select that as a option. I was offered 45k for my XR by a jeep dealer. It has 20,225 miles and stickered for 68k when new. They are just looking at rubicons and saying that’s what rubicons are going for they aren’t comparing apples to apples with the XR package and in turn we are getting screwed even worse than a standard rubicon owner.

Yeah typically options only hold ~10% on resale. That’s why. XR is an option, not a model. So they are comparing apples to apples.

We’re in more of a normal market now. This is how it works. I was worried about this happening when the JL got announced and the pricing was getting so high compared to the JK due to options. They were going to erode resale. This is probably what we’re seeing now. Demand was high enough when the JL came out to avoid it temporarily, then Covid. Now interest rates being higher and demand lower, I’m not surprised. Also, XR just isn’t that interesting of a package for most buyers.

The only way to avoid this is to limit options to a reasonable amount or if Jeep continues to inflate base prices enough over a longer hold period.

 

[RobTrachtman]

We are going in to some challenging times and Wranglers do hold their value very well but sometimes, If you overspend on options and then build the car out with a 3 inch lift, 37's ,etc, you may not get a super quick return, but usually in the 3 -5 year bracket you come out very good. If you can sit it out if you can't get a couple decent trade values, wait till summer. I expect a nice turn around int he next few months.

 

[Shark01]

Just since yesterday, I've read where wholesale prices of used cars are on the rise again, and expected to keep rising for the 2nd quarter.

 

[Kurttaylorsjeep]

I have been studying the car industry for about a decade. The worst is yet to come! No joke! Wait until all these used cars stock pile on dealer lots. Then try and trade in a car... It will be horrible! The only thing that will keep an automotive surplus collapse is lower interest rates on used car loans. When the electric car market really gets going next year anyone with an IC engine will be stuck. The world of car enthusiasts will be shrunken to pea size. The passion will be over and all that will matter is price and battery distance. We are in the middle of a self induced stroke.

 

[Punkn89]

I have been studying the car industry for about a decade. The worst is yet to come! No joke! Wait until all these used cars stock pile on dealer lots. Then try and trade in a car... It will be horrible! The only thing that will keep an automotive surplus collapse is lower interest rates on used car loans. When the electric car market really gets going next year anyone with an IC engine will be stuck. The world of car enthusiasts will be shrunken to pea size. The passion will be over and all that will matter is price and battery distance. We are in the middle of a self induced stroke.

Better just enjoy what you have and stop worrying about getting the latest and greatest (questionable)!

 

[Kurttaylorsjeep]

Absolutely ?

 

[aldo98229]

I keep checking online prices on a weekly basis: right now I can get a JL Rubicon with an original MSRP of $65,000, used, with less than 15,000 miles, for anywhere between $40,000 and $45,000.

While this is not terrible depreciation, it is way below the resale values Wranglers historically held.

IMHO, the main problem is Jeep's ridiculous pricing strategy more than anything else. Instead of pricing things based on the "value" they provide, Jeep has been pricing them based on "whatever the market will bear."

Now it only takes a minor slowdown on the market to send Wrangler resale values careening into the ditch.

On the Gladiator side the story is truly sad. Jeep has been offering "Employee Pricing for All" for several months, in effect destroying owners' resale values.

 

[RobTrachtman]

As someone in the business, I can tell you that interest rates being fairly high, relatively to just 18 months ago, is really dictating resale value as well as a fairly good supply. I would wait a few months before trying to trade out of your cars no matter what brand till rates start dropping to a more tolerable level.

 

[SaintNick]

As someone in the business, I can tell you that interest rates being fairly high, relatively to just 18 months ago, is really dictating resale value as well as a fairly good supply. I would wait a few months before trying to trade out of your cars no matter what brand till rates start dropping to a more tolerable level.

If they drop.

 

[RobTrachtman]

Rates will start dropping in about March to May based on what I see going on in business.

 

[viper88]

I am also surprised by current Wrangler residuals. Historically Wranglers had exceptionally great residuals. That was when they were the only game in town. There was no competition. Prior to the Bronco there was really no direct competitor for the Wrangler. Part of softer Wrangler resale values "might" be due to more competition from the Bronco. The Bronco is poaching sales from Wrangler. Interest rates for used cars are higher than they were a couple of years ago. And of course market corrections for the last few years. It all trickles down.

I know one thing. Prices for new cars have no where to go but UP with new union contracts, higher labor rates, and higher material cost. These higher prices might help used car values later down the road.

Since the pandemic the new norm is nothing is normal.

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