Trading in a car worth more than the one bought

[PaunchyPirate]

I'm considering doing a dealership trade on a new 2021 Toyota Highlander Hybrid Platinum model SUV. I currently have a decked out 2020 Ram 1500 Limited pickup truck. According to the Kelly Blue Book website, my truck could be valued in the $55,000 range. If that's the case, it could possibly mean that my truck is worth more than the new car I would be buying, which are in the $52,000 to $54,000 range.

Are there any gotchas I need to be aware of with a dealership on an upside down transaction such as this? Are dealerships even willing to do this? i.e. would they even consider writing ME a check as I drive off in the less valuable car? Just wondered if there were considerations that I had not yet considered.

I'm not interested in a discussion on who I should really sell my used RAM to. I'm aware it might fetch more on the private sale market. Nor am I looking for a lecture on trading in a one year old vehicle. Or a lecture on buying overpriced vehicles. I can deal with my own inner demons on these topics. Oh, I'm also well aware of the current shortage of new vehicles and the associated stress on prices it has resulted in.

 

[wolf]

Dealer buy wholesale price. Sell to you, the retail price. They make $ on both ends.

So, IMHO, Dealer will offer you a very low price for your RAM. And sell at high retail
to make a profit.

Dealer, will then do their best to get the best price for them on the Toyota.

Good luck......

 

[ivinsfan]

Why don't you just ask the dealer?

I had a friend who got cash back on a sell/trade it happens


They for sure won't lecture you because all they want is your money.


Because of the sales tax alone I think you'd want to run through a dealer, don't forget to calculate the sales tax savings in your total number.

Provided you are in a state that only taxes the difference between new and used price.

 

[38Chevy454]

You might be cash positive on the prices, but after tax and registration, it may eat up those positive cash credits.

 

[street]

Dealer buy wholesale price. Sell to you, the retail price. They make $ on both ends.

So, IMHO, Dealer will offer you a very low price for your RAM. And sell at high retail
to make a profit.

Dealer, will then do their best to get the best price for them on the Toyota.

Good luck......

Not to be on the negative side here but on paper you are correct with the numbers you found. With my experience it never seems to be that cut and dry when you to buy and trade.

These time are a little different but the dealer isn't going to loose money on the sale and on that trade-in truck.

I wish you the best!!

 

[bloom2708]

Your best bet is to sell your RAM private party and get > Trade in value.

You can always ask what the trade-in value will be, but I agree that you likely will not get to a scenario where you pay little or get cash back. The trade value would be adjusted down. It always has been in my experience.

You could see what Carvana or CarMax would pay for your RAM.

 

[ivinsfan]

Your best bet is to sell your RAM private party and get > Trade in value.

You can always ask what the trade-in value will be, but I agree that you likely will not get to a scenario where you pay little or get cash back. The trade value would be adjusted down. It always has been in my experience.

You could see what Carvana or CarMax would pay for your RAM.

You have to factor in sale tax implications before you can make this statement.

 

[Car-Guy]

I don't recall any specific "gotchas" but I recall two times that I've traded in cars more valuable than the one I was buying from the dealer.... Usually it's only been a few thousand dollars difference. Signed a bunch of paper work (who knows what) then took my new car home along with their check.... End of story...

Right now I have a couple of dealers that have contacted me wanting to buy my car(s) outright. (They know I trade a lot and I guess they need used cars) They don't seem to mind writing checks to buy cars.

 

[MichealKnight]

Car-max

If there's still money owed on it, probably disregard.

But, if you own it free and clear, try Car-Max.

I say this as someone who has owned multiple car-dealerships - - CarMax's bid many times is awesome - - superior to dealers - mind you, this was pre-chip shortage so I'm not sure. When I sold my last dealership - I owned 2 personal cars (for certain "reasons", shall we say") and I myself took them to car-max because I felt from experience that was the best money.

 

[Jerry1]

If the numbers work out, they have no problem writing you a check. When trading in my truck, the dealer I bought the old truck from made me an offer, knowing that they weren’t selling me the new truck. They didn’t beat the trade in price, but I assume if they did they would have wrote me a check. They want vehicles. Good luck. I got what I paid for mine. So I drove it for two years for the cost of sales tax and incidentals like registration.

 

[MichealKnight]

Oops sorry, your post specifically said not to bring up who to sell your car to and I did that. Sorry I should've read closer

 

[PaunchyPirate]

OP here. Thanks for the input everyone. I’m just doing my usual exhaustive research on all the possible considerations I can think of. I am going into the dealership on Wednesday to see where they stand on all the various numbers. We will see where it goes.

 

[braumeister]

If there's still money owed on it, probably disregard.

But, if you own it free and clear, try Car-Max.

I say this as someone who has owned multiple car-dealerships - - CarMax's bid many times is awesome - - superior to dealers - mind you, this was pre-chip shortage so I'm not sure. When I sold my last dealership - I owned 2 personal cars (for certain "reasons", shall we say") and I myself took them to car-max because I felt from experience that was the best money.

All true, and there have also been a number of recent posts saying that Carvana has the best offers right now. I verified that recently when I looked at what my car could bring, and Carvana's offer was over $1,000 higher than CarMax.

A few minutes clicking around the internet can pay huge dividends.

 

[audreyh1]

I got money back.

 

[Aerides]

My parents are at the end of their Highlander lease but with the limited choices on new ones they've decided just to take the lease-buy-out from the original contract. They'll get the car (well maintained with stupidly low mileage) for $28k. 2nd hand on lots they sell for $38. Wondering if the dealership will give them a hard time but I don't think they can.

They joked they should buy it and drive to Carmax and pocket half the difference (except then back to the original problem of not finding a good new one).

 

[Kerfuffle]

Huge fan of Carmax - they gave us a great offer on the car we sold to them. If you want to go through the dealer though, you know, dealers are gonna be dealers. They aren't really there to play fair, so they'll try and lowball you, or they'll try and make up for it by adding on useless extras on the new car. That's kinda their game. I personally prefer to never confuse trade-in value with what you're paying for a new car, so maybe just negotiate the price of the new vehicle before you tell them you have a trade-in. At the last minute, you can say, oh, changed my mind, I want to trade in, and then make them honor your negotiated deal and hope they don't lowball you too much on the trade-in. Keep the two things separate while negotiating because they really are separate transactions.

 

[Bamaman]

Let me tell you a little about Toyota Hybrids.

I ordered a 2018 Camry Hybrid and got one of the first ones off the assembly line. Paid $27K, $550 under dealer cost. We got 49 mpg average in town and on the open road. In 69,000 miles, it never saw a shop. Only money spent was on a set of tires.

This last December, we got bored, and spotted the completely new 2021 Venza mid size SUV. It has an even updated Hybrid system with 2 electric motors. I traded in the Camry and got the Venza Hybrid with AWD. It's a higher quality vehicle than the Camry--more closer to the Lexus' than a Toyota. We're getting 42.5 mpg on it all the time. And we just love it. Best of all, it was $32K without any options we didn't need/or want.

 

[PaunchyPirate]

My parents are at the end of their Highlander lease but with the limited choices on new ones they've decided just to take the lease-buy-out from the original contract. They'll get the car (well maintained with stupidly low mileage) for $28k. 2nd hand on lots they sell for $38. Wondering if the dealership will give them a hard time but I don't think they can.

They joked they should buy it and drive to Carmax and pocket half the difference (except then back to the original problem of not finding a good new one).

My niece was in a similar situation with her leased Kia. The dealer tried every possible intimidation to try and convince her to not execute the lease buy out. She said it got very uncomfortable. But she stuck to her decision and they finally did the paperwork.

 

[PaunchyPirate]

OP here again. CarMax… I’m already a fan of at least having them check out your existing vehicle and get an offer from them. I’ve sold 2 vehicles to them thru the years.

However, the closest CarMax is now about a 2 hour drive from my home.

Also, I want very specific Highlander trim and features. The local dealer has 1 Highlander on the lot and it is not a Hybrid. The other dealers within about 50 miles also do not have what I’m looking for. Supplies on the lot are minimal. The ones that are “in production” are either already committed to other buyers or not what I want. I’m in no hurry, so I will be ordering exactly what I want. The dealer says delivery is running about 8 weeks right now. So selling to CarMax now won’t work, since I need to drive something for the next 8 weeks.

My Ram is paid for, so nothing to consider from an existing loan. I know I will likely be paying a high price for the ordered Highlander, since you rarely can get much of a discount on an ordered vehicle. I have researched Dealer Cost for the vehicle. I know the Kelly Blue Book online estimate of the value of my truck. In the past, I have always been offered something in the ballpark of the KBB value I have researched. That makes the haggling much easier.

I’ve bought many vehicles from dealers and have traded in many times. I know how to determine the additional sales tax (if there is any) and fees. I’m comfortable with my ability to walk away if I’m not getting a deal I consider fair.

Again, thanks for the input. I’m glad to see that at least a few of you succeeded in selling more than you were buying.

 

[PaunchyPirate]

Let me tell you a little about Toyota Hybrids.

I ordered a 2018 Camry Hybrid and got one of the first ones off the assembly line. Paid $27K, $550 under dealer cost. We got 49 mpg average in town and on the open road. In 69,000 miles, it never saw a shop. Only money spent was on a set of tires.

This last December, we got bored, and spotted the completely new 2021 Venza mid size SUV. It has an even updated Hybrid system with 2 electric motors. I traded in the Camry and got the Venza Hybrid with AWD. It's a higher quality vehicle than the Camry--more closer to the Lexus' than a Toyota. We're getting 42.5 mpg on it all the time. And we just love it. Best of all, it was $32K without any options we didn't need/or want.

This is great information and consistent with family members’ experiences. Thanks for sharing.

 

[DrRoy]

I'm considering a new 2021 Toyota Highlander Hybrid Platinum model SUV.

We're considering the exact same model. I'd be curious what you have to pay vs. the sticker price.

 

[corn18]

Run your VIN through Carvana to get an idea of the best price. Always better than a dealer and Carmax and they come pick it up. I've sold 2 cars to them and it was very easy.

And if you want to get max price for the truck, do it now. Used prices are very, very high but coming back down. My truck was worth $2k more 2 weeks ago. But it isn't a loaded new model like yours. I priced a new build F-450 @ $77k MSRP. Called around and the only used F-450 was the same truck but 2019 with 23,000 miles. They were asking $81k and they will likely get that. New HD trucks on the lot all have a $5k adder above MSRP.

 

[street]

]Your best bet is to sell your RAM private party and get > Trade in value.
[/B]
You can always ask what the trade-in value will be, but I agree that you likely will not get to a scenario where you pay little or get cash back. The trade value would be adjusted down. It always has been in my experience.

You could see what Carvana or CarMax would pay for your RAM.

This great advise. I sold to private party and did really well verses trade.

 

[ivinsfan]

Run your VIN through Carvana to get an idea of the best price. Always better than a dealer and Carmax and they come pick it up. I've sold 2 cars to them and it was very easy.

And if you want to get max price for the truck, do it now. Used prices are very, very high but coming back down. My truck was worth $2k more 2 weeks ago. But it isn't a loaded new model like yours. I priced a new build F-450 @ $77k MSRP. Called around and the only used F-450 was the same truck but 2019 with 23,000 miles. They were asking $81k and they will likely get that. New HD trucks on the lot all have a $5k adder above MSRP.

Those prices are nuts...but you answer here Corn explains what happened on your spending thread. OP clearly says in post number one he doesn't want any advice about doing something different We humans just can't help ourselves....


The Escape Titanium hybrid we bought last December was completely unavailable until a week or so ago. It's priced at list with the dealer keeping the 500 dollar Ford loyalty on bonus on top of that.

 

[ExFlyBoy5]

All true, and there have also been a number of recent posts saying that Carvana has the best offers right now. I verified that recently when I looked at what my car could bring, and Carvana's offer was over $1,000 higher than CarMax.

A few minutes clicking around the internet can pay huge dividends.

We have sold 2 cars to Carvana in the last couple of years and they beat the pants off any dealership and CarMax. They even paid more for my 2018 F-150 than I paid for it about a year earlier. You can get an offer from them in less than 3 minutes just by putting in the tag/plate info. It was the absolute easiest was we have EVER sold a car.