VelocityRED

Has anyone here done a trade-in at a dealership before? I'm trying to get an idea of how much (on average) they take off from book value in their offers. For example, if my ride is currently worth about $38K, how much would a dealership normally offer me? $2K lower? $5K lower??

The reason I ask is that I'm lookin to trade-in my IS 300, and am not sure whether I should try to private sell, or trade in. Normally, private selling is the way to go, since you'd get more money for your vehicle. However, since the value of my car is still pretty good (2001 Lexus IS300), it might make more sense to take a trade-in depending on the offer I receive from the dealership.

Why? Because, when you trade in a vehicle, you only pay tax on the difference between the price of the new vehicle and your trade-in. 15% tax on $41K is a lot worse than 15% tax on 5K!

Assuming that the base price after freight & air/fuel tax is 41.5K:
Brand new RX-8 w/o trade in = $47.7K after PST & GST
Brand new RX-8 w/ trade in at $36K = [(41.5K-36K)*0.15]+41.5K = 42.3K total price or trade-in + $6.3K.

So if I private sell my car for $39K, I'd still have to cough up $8.7K for the difference due to the high taxes. Whereas, if I receive say 36K trade-in for my IS300 ($2K less than book), I'd only have to pay $6.3K difference. Right now, it makes more sense for me to trade-in, and it would save me all the hassle of trying to sell my car, but it all depends on how much the dealership is gonna low-ball me.

Any ideas on how much dealers usually take off?? Sorry for the long note, just want to have it all figured out...

VelocityRED

Midnight Flyer

Go to the library and ask to see either the red book or the black book. The red book lists the prices of all car types sold over the past month to individuals. You look up the car you drive, determine if it is below, at or above average and get what people have paid for the car. It also includes prices for certain options such as AC, ABS, etc.

If you are fortunate enough to know someone who works in a bank, dealership, etc. you might get to see the black book. The black book tells you what dealers are paying for the cars. The difference between the black book and red book is what the dealers are making as profit.

Both books are published monthly.

You can also go to AutoTrader.com and ask for a list of all vehicles in your area that match your year, make and model. I usually go for one year +- as well. This will tell you what the market price of the car is. Throw out the really high and low prices and you should be able to calculate the average value of the car.

CraziFuzzy

Dealers will take off some, obviously, but it is based on the sellabillity of the car. I don't think they will have a problem selling your IS, so they probably won't take off near as much as, oh, say.. my escort. They offered only like US$2500 trade-in for my escort, while even the blue-book trade-in value is US$3500. However, with the mod's done to the car, I plan on trying to private party sell it for US$6000-6500.

Now, on the other hand, some dealers, when in the dealing process, will offer a huge trade-in value, and make it sound like they found someone to buy it from them soon, to try to rush you into the purchase, now, of course this won't happen with the 8, because everyone already wants one, but we got offered an $8000 trade-in on my wife's old 4-door escort (which was in OK condition) when we bought our Durango. But in contrast, they didn't come down much on the actual purchase price of the truck (station-wagon?) You could always talk to the dealer, and try to get an idea of what they'd take it for. In the end, if its only a matter of a few hundred dollars, or maybe even a grand, it may be worth it to trade in, just because its just that much easier.

IStoS2kRX

Hello VelocityRED

I brought my (fully loaded) 01 IS300 to an Ottawa area Honda dealer in Jan and to a Mazda dealer, in March 03. The Honda saleman showed me the black book for Jan, and the prices ranged from 25K to a bit over 30K. At Mazda's the prices dropped a bit from 23K to 29K. If the car had no accidents, options and mileage are the two main factors for them. Both told me that they have to use the black book since they will not try to sale it themselves (In Ottawa, Acura and Honda are not in the same dealership).

If I am really serious about the rx8, then I should make an order ASAP before IS300 blackbook value went to 21-27 in June(?). Still undecided, we might have some info on s2200 or rx7 in a few mths.

IStos2kRX.

VelocityRED

Thanks for the responses - they really helped. IStos2kRX, are you sure about those prices?? I'm assuming that you're talking Cdn $ since you're from Canada. If you're being offered anything less then 34K at the least on the IS300, I think you're being totally ripped off. How could you lose 50% of the car value in 2 years? Especially if it's a fully loaded Lexus in excellent condition? If that's the price I'm offered, then screw the RX8. It's a nice car, but it ain't worth all that extra cash over the $50K I've already spent for the IS.

You should check AutoTrader - I see our car selling between $35K-$40K for the same year/make vehicle.

Gord96BRG

VelocityRED,

You can check for yourself, but you're in for a shock. Go to www.daimlerchrysler.ca , pick a brand, and then on the left side you'll find a link for "tradein value". That takes you to the Canadian Black Book web site - you pick your car, enter mileage and options, and it will give you a range. Obviously that range is affected by condition and regional variations, but it's not too far off.

If you enter a 2001 IS300, loaded, with 30K km, the trade-in value is $26K to $28K Canadian. Remember, trade-in gives you wholesale value, so you can't compare it to what some people are asking for a retail price.

50% in 2 years is a bit steep, but look at lease residuals - after 3 years, you're lucky if the buyout (residual value of the car) is more than 50%.

These days, with manufacturers offering scores of deals for 0% financing, the market for used cars has plummeted, and their value has as well. Depreciation thus is steeper than ever right now, and it's always at it's worst in the first two years.

Don't just check the IS300 - try other brands (if you know what they sold for 2 years ago), you'll see it's the same situation across the board.

Regards,
Gordon

VelocityRED

Whoa... that really sucks! Well, I guess I'll have to try to private sell my car cause the trade-in value really makes no sense, I don't know why anyone would take it. Not lookin forward to the hassles of private selling. I might just keep the Lex. Thanks for the info.

VelocityRED

Midnight Flyer

If you are going to do a private sale contact the MTO about the process. They now require that the seller get a sales package from the ministry that details the history of the car and includes a bill of sale. Sort of like a carfax report. Only the seller can get it but it makes it very easy to handle the sale.

There is a part there so that you can go to the MTO and show that you are no longer the owner of the car in case the buyer decides not to register it for a while. That way you are not on the hook later if there is a problem.

When I bought my Miata last year, the seller did not know about it but I asked him to get a temporary plate for me so I could drive the car home. That is when he got the lowdown on the package. When I went to register the car they required the package.

Worked very well for both of us.