Dealership wants to buyback my car

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AND_YOU_ARE
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Dealership wants to buyback my car

Post by AND_YOU_ARE »

I bought a new 2012 Ford Fusion SEL nearly three years ago (Oct 2011) after a lot of research and comparisons, I enjoy this car and was planning on driving it for 8-10 years. In the past three years I have traveled extensively using corporate rental cars and have only put 22,000 miles on my car. After recently having my tires rotated and oil changed at my dealer's quick lane, I received two letters expressing a need for high quality used cars and if I was interested in selling mine for a new Ford. It sounds like the dealership knows the exact condition of my car and has already crunched the numbers from their end.

Is this ever a good idea? My first thought is that the dealer wants to sell a new car and get a trade in they can quickly sell for a good profit. I do like the new Fusion. In the past year, I rented a 2014 Fusion and put 15,000 miles on it for business travel.

When I bought my car I financed $18,000 @ 2.7% for 5 years. A quick look at Kelly Blue Book, my Fusion is worth about $14K as a dealer trade in. At this stage in my car loan, I have about $8,000 outstanding. Unless I was given more than KBB, I would have about $6,000 in equity. I forget the numerous rebates they offered me (I would have to look at the letters again), a new Fusion with the options I would want is about $24,000. Unless I receive a large amount of rebates, I don't think the numbers make sense for a new loan. I would be financing another $13-16K to have a brand new car.

Am I missing anything here? Has anyone had any experience with this?
jebmke
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Re: Dealership wants to buyback my car

Post by jebmke »

I recycle everything I get from car dealers.
Don't trust me, look it up. https://www.irs.gov/forms-instructions-and-publications
billern
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Re: Dealership wants to buyback my car

Post by billern »

This is a sales tactic. They don't particularly want your car. They want to sell you a new car and they know getting you in to talk about buying back your car can trigger a new car sale.
Mike Scott
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Re: Dealership wants to buyback my car

Post by Mike Scott »

Standard dealer "scam" or sales technique. If you buy a new car they make money. If you keep your "old" car you save money.
Oddlot
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Re: Dealership wants to buyback my car

Post by Oddlot »

Go with your first thought.
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mike143
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Re: Dealership wants to buyback my car

Post by mike143 »

Sham "marketing".
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TomatoTomahto
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Re: Dealership wants to buyback my car

Post by TomatoTomahto »

I routinely get letters saying that they want to buy back two cars that I got rid of 3 years and 5 years ago.

I once answered a realtor's letter which said that they had a buyer for my house; same story, different object. They said they had no specific buyer for my house, but that it was a type which was sought after.
I get the FI part but not the RE part of FIRE.
dickenjb
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Re: Dealership wants to buyback my car

Post by dickenjb »

I got a letter from my Lexus dealer offering to trade my 2010 LS460 in on a new 2013 one (this was a year ago) and they would guarantee my monthly payments would not go up.

I smiled since I paid cash for the car. But didn't take the bait.
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Raymond
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Re: Dealership wants to buyback my car

Post by Raymond »

billern wrote:This is a sales tactic. They don't particularly want your car. They want to sell you a new car and they know getting you in to talk about buying back your car can trigger a new car sale.
+1

They don't care about your car, they just want you to buy a new one.

Of course, if they can lowball you on the trade-in value of the old car, so much the better for them when they resell it :greedy
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Grt2bOutdoors
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Re: Dealership wants to buyback my car

Post by Grt2bOutdoors »

Common marketing technique called "channel stuffing". The dealer needs to show improvement or increased sales to manufacturing giant (think Ford) - how do you accomplish that with only 4 months left in the annual sales cycle? You generate sales leads by offering to repurchase your used car that you currently own in "exchange" for a new vehicle. The huge influx of car sales in the last few months of the year vs the first 8 months of the sales cycle is the "stuffing". The dealer is essentially booking a majority or a large proportion of its sales in what may be a typical slow sales quarter, without the perceived incentive such sales would almost never occur in a normal business environment. What does this accomplish? If you can get the car owner to "bite" - Removes older vehicle from automotive market, manufacturer can book the sale of a "new" vehicle that is used by various research firms to calculate market leadership amongst peer group, generates higher sales revenues and incentive commissions received from manufacturer, leaves you as owner of a brand new car holding the bag in the form of higher costs. Don't go for it.
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Stan57
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Re: Dealership wants to buyback my car

Post by Stan57 »

Most people don't realize there are usually three transactions: 1) Selling your old car to the dealer, 2) Buying the new car and 3) (in many cases) Financing the new car. The dealer can give you a great deal on one of them and make a lot of money on the other two.
Gropes & Ray
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Re: Dealership wants to buyback my car

Post by Gropes & Ray »

Car dealers like to/buy sell used cars in good condition with less then 30k miles. But the real deciding factor should be whether or not you want a new car. I wouldn't feel pressure to go cash in on this deal now if you're happy with your current car.
obgraham
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Re: Dealership wants to buyback my car

Post by obgraham »

Car dealers like to/buy sell used cars in good condition with less then 30k miles.
I don't believe that for a minute. The proof is that is usually very little difference in what you get for a trade of a creampuff versus a normal wear-and-tear car. Sure, you'll lose some if the tradein is a beater or has major issues.

Dealers sell the vast majority of their trades to wholesalers/auctions. Then they go to that same auction to buy their used cars.
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Toons
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Re: Dealership wants to buyback my car

Post by Toons »

billern wrote:This is a sales tactic. They don't particularly want your car. They want to sell you a new car and they know getting you in to talk about buying back your car can trigger a new car sale.

+1,,Hit the nail on the head :happy
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Cigarman
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Re: Dealership wants to buyback my car

Post by Cigarman »

A friend of mine took "advantage" of such an offer on his Hummer. Exact same payments, same model and options but current model year. Of course he had to extend his 5 year loan another 2 years because he had only paid 2 years on his first 5 year loan. He ended up with 7 years of car payments and a slightly newer car. He can't figure out why he is always broke!
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cheese_breath
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Re: Dealership wants to buyback my car

Post by cheese_breath »

Unless you want to buy a new car ignore this. Even then you can probably get more selling your used one yourself than the dealer will give you on trade in.
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livesoft
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Re: Dealership wants to buyback my car

Post by livesoft »

Here's an old thread on the same topic: http://www.bogleheads.org/forum/viewtop ... 1&t=134591
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Ervin
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Re: Dealership wants to buyback my car

Post by Ervin »

You want a great deal on a car? You sell your car to yourself. Ta-da, you've got a barely-used excellently-maintained one-owner car, and you only have to pay another $8,000 to own it. :P

It never makes sense to "upgrade" a barely-used car to a newer model.
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denovo
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Re: Dealership wants to buyback my car

Post by denovo »

Has anyone ever got these letters from real estate agents?

We've gotten a few along the lines of "People have expressed interest in your home (or a home in your neighborhood) and are willing to pay XXX,XXX , etc.

I know it's garbage, but it's still amusing, and I wonder what the yield rate is, how many people take the bait.
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bertilak
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Re: Dealership wants to buyback my car

Post by bertilak »

livesoft wrote:Here's an old thread on the same topic: http://www.bogleheads.org/forum/viewtop ... 1&t=134591
And in that thread I relate my experience with the same tactic but for my leased car. They were at least very clear on the deal they were offering me. They listed the equity I had in the leased car -- it was negative, which makes sense. By simply waiting out my lease (instead of taking their deal) I would increase my equity up to zero! A free lunch! :happy
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pinhead
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Re: Dealership wants to buyback my car

Post by pinhead »

The guy with the crappy ford got the same post card too
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TomatoTomahto
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Re: Dealership wants to buyback my car

Post by TomatoTomahto »

denovo wrote:Has anyone ever got these letters from real estate agents?

We've gotten a few along the lines of "People have expressed interest in your home (or a home in your neighborhood) and are willing to pay XXX,XXX , etc.

I know it's garbage, but it's still amusing, and I wonder what the yield rate is, how many people take the bait.
I called once, realized they were dishonest, and made a mental note never to use that agency.
I get the FI part but not the RE part of FIRE.
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Toons
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Re: Dealership wants to buyback my car

Post by Toons »

I currently OWN a 2012 Honda Fit,2013 Crv...just received an email from local dealership,,contents were: :happy

"What if you could drive a new Honda for the same or LOWER monthly payment?" "Enroll today in our Vehicle Exchange Program ... It really works!! "Due to market conditions, there is a high demand for quality, pre-owned vehicles at Honda*********"
you may be in an excellent position to exchange your urrent vehicle for a brand new Honda and likely lower your current monthly payment! Through the Vehicle Exchange Program, eligible consumers are entitled to recieve additional trade-in value and special incentives toward the purchase or lease of a newer Honda.
"Benefits to the Vehicle Exhcnage Program Include:
Above market value for your trade
Lower monthly payments
Better financing terms
Longer and more comprehensive warranties "Lifetime Warranty"
Lower fuel costs and higher miles per gallon
Reduced maintenance and repair costs
Increased safety and security technology
Brand new entertainment features and much much more!!"


The "typos"are as shown in the email. :shock:

Caveat Emptor :happy
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scrabbler1
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Re: Dealership wants to buyback my car

Post by scrabbler1 »

I have been receiving these "great offer" letters from my Toyota dealer for several years trying to buy back my 2007 Corolla. They go into the trash (along with most of the mail I get).
jon-nyc
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Re: Dealership wants to buyback my car

Post by jon-nyc »

I bought a new car last year. About 3 weeks later I got that same letter, except it seems to have been spit out of their computer in error. In place of '2013 Fit' it said '[year, model]' and in place of my name was '[customer name]'.
arkerr123
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Re: Dealership wants to buyback my car

Post by arkerr123 »

... this is just to get you in the door...
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mickeyd
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Re: Dealership wants to buyback my car

Post by mickeyd »

I received a similar sales tactic from Toyota several times (via phone and mail). Sounded like they had several local buyers who were just chomping at the bit to purchase my 2 YO wheels. I felt honored that they thought so highly of my newish car. They also reminded me that I could use the money to help pay for a new Toyota. How generous of them!
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Angelus359
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Re: Dealership wants to buyback my car

Post by Angelus359 »

My car dealer offered me 1200 over bluebook even if I didn't buy one of their cars.
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Hypersion
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Re: Dealership wants to buyback my car

Post by Hypersion »

Mad Men.

I got the same letter for old '01 300 that is beat up pretty bad.
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6miths
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Re: Dealership wants to buyback my car

Post by 6miths »

Yes marketing ploy. Get these letters once in a while. Most dealers have better margins on used cars than new cars.
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jdb
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Re: Dealership wants to buyback my car

Post by jdb »

Our wonderful auto dealers are just trying to benefit you and the community. To quote from a recent National Association of Auto Dealers press release in attacking the Tesla direct sales model:

"Franchised new-car dealers benefit consumers through price competition, accountability on warranty and safety recall issues, and provide enormous economic benefits to local communities across the country. The dealer franchise network is supported by automakers as the best and most efficient way to buy, sell and service cars in the marketplace.”

So there. Of course auto dealers are your friends. And if you believe that I may have a bridge available to purchase.
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William4u
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Re: Dealership wants to buyback my car

Post by William4u »

AND_YOU_ARE wrote:I bought a new 2012 Ford Fusion SEL nearly three years ago (Oct 2011) after a lot of research and comparisons, I enjoy this car and was planning on driving it for 8-10 years.
Your original idea is much, much better. Keep the car as you originally intended. Stay the course and sell the car in 8-10 years.
wander
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Re: Dealership wants to buyback my car

Post by wander »

You can try this: without buying a new car, ask the sale man how much he would pay for your car? You will be surprised how cheap the dealer wants to pay for your car.
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