Need tips on buying a used car with a trade in

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Bohemiana
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Need tips on buying a used car with a trade in

Post by Bohemiana » Sun Jun 28, 2020 1:37 pm

We want to buy a used 2014 or 2015 Nissan Armada. We have two vehicles in mind at two different dealers. The other day we went to Dealer 1 to test drove the 2015, and we like it but they don't have a policy to let us take the car to our mechanic for a once over, which bothers us. Dealer 2 has the 2014 with the same features but it's $1k less and similar mileage and they allow a 3-day period to return it so we can have it checked over. We want to pay cash (actually, we'd really like to put a few thousand on our credit card for points, which we have done in the past.)

Dealer 1 is offering the 2015 car for $16k on various internet platforms but the actual car has $17k on the window. They have called us numerous times over the past two days so I'm thinking there may be additional room there to negotiate or this is just how used car salesmen wear you down.

Dealer 2 is offering the 2014 car for $15k on various internet platforms but when you look at their website, it says $16k with a $1k discount if you finance. I figure we can either try to negotiate that to $15k OR go with financing an pay it off immediately so we get the $1k discount. We haven't seen this car yet--plan on going in the next day or two to test drive it.

We haven't discussed our trade in with the dealers. Actually, we've never traded in a car. We got an online offer for $6500 from some online dealer which is close to average for the KBB trade-in value. Where does this come into play with the purchase of the new used car? Do we negotiate the new car purchase first? We thought we might go to CarMax to see what they offer also but we tried that a few years ago and the offer sucked. Of course we want to get the new used car for as low as possible and sell our old car for as much as possible. Any strategies??

livesoft
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Re: Need tips on buying a used car with a trade in

Post by livesoft » Sun Jun 28, 2020 1:54 pm

First, it doesn't matter what the dealer is offering the car at. I think you should be able to get it for 15% to 20% less with proper negotiation. If you search for similar cars in a 500 mile radius are there any cars that are lower in price? What free online pricing services have you used to find out what these cars should sell for?

Second, you need to find out what you can get for your used car. Sure, you can always inflate the price or try to sell it yourself. You can use the same free online pricing services to get at least some random idea.

Third, act like you are doing the dealer a favor or two or three favors if you bought the car from them.
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FrugalInvestor
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Re: Need tips on buying a used car with a trade in

Post by FrugalInvestor » Sun Jun 28, 2020 1:58 pm

You'd probably get more by selling your car outright, but it's more of a hassle. I usually prefer trading for sake of convenience.

I typically buy new cars and when I have a trade-in I first negotiate the cash price of the new car to a level I think is fair (the advertised or sticker price is never the bottom line price, period). Only then do I let the dealer know that I have a trade. I usually I tell them that I thought I had the trade sold to a private party but the deal fell through so I'll be trading it in. I let them know what I want for the trade and tell them if they can give me that much we can complete the deal - using a somewhat high but reasonable number to give them some room to counter. Before doing this I have a minimum that I'll accept in mind. If we can meet somewhere in-between I sign the deal. Otherwise, I walk. With many dealers walking is necessary to get what you want but you truly have to be willing to go elsewhere if necessary. And you have to be patient if you walk because it may take a couple of days to hear back from the dealer if they decide to capitulate.

Keep in mind that in many places the sales tax on the vehicle you're purchasing is offset by the value of the trade so what you need on the trade vs. selling outright to break even is reduced.

Of course if you have financing involved that complicates the deal even more. I haven't financed in many decades.

P.S. Never assume that a dealer salesperson is telling you the truth, because they're not. They always have their "manager" and their finance person (even if you're not financing) to fall back on as the bad guy. Don't feel guilty saying what you need to say to get the price you want. It's a game that they play and that you need to play to be on an even playing field.
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Topic Author
Bohemiana
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Re: Need tips on buying a used car with a trade in

Post by Bohemiana » Sun Jun 28, 2020 2:18 pm

livesoft wrote:
Sun Jun 28, 2020 1:54 pm
First, it doesn't matter what the dealer is offering the car at. I think you should be able to get it for 15% to 20% less with proper negotiation. If you search for similar cars in a 500 mile radius are there any cars that are lower in price? What free online pricing services have you used to find out what these cars should sell for?

Second, you need to find out what you can get for your used car. Sure, you can always inflate the price or try to sell it yourself. You can use the same free online pricing services to get at least some random idea.

Third, act like you are doing the dealer a favor or two or three favors if you bought the car from them.
I've search at least 6 online used car sites (Carfax, AutoTrader, etc) but only to 100 miles from home so I'll go out to 500. These two cars "seem" to be the best two deals because the mileage for both is under 80k.

As a side note, it's incredible how much false advertising is out there! One car online is advertised at the top of the line model but when I did a VIN check and called the national Nissan helpline, I found out it is actually the lowest model of Armadas. I let the dealership know their mistake but they still have it advertised incorrectly. Same thing happened for two other cars at two other dealerships.

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eye.surgeon
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Re: Need tips on buying a used car with a trade in

Post by eye.surgeon » Sun Jun 28, 2020 2:24 pm

livesoft wrote:
Sun Jun 28, 2020 1:54 pm
First, it doesn't matter what the dealer is offering the car at. I think you should be able to get it for 15% to 20% less with proper negotiation.
This is not realistic. Read this article written by a Jalopnik writer and professional car broker..

https://jalopnik.com/here-is-why-you-sh ... 1823917876

Take home message: "The problem is that so many folks have been trained to “never pay sticker price” they’ll assume they have to get a certain percentage off the asking price or they didn’t get a good deal. While that may be the case for a new car, it’s not true for pre-owned.

The typical margin for negotiations for most mainstream used cars found under the $100,000 mark is in the hundreds of dollars, not thousands. You may find a little more wiggle room in a grand or two on the upper end of the spectrum, but expecting 10 percent off the asking price of a pre-owned vehicle, is going to cause a lot of frustration."
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livesoft
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Re: Need tips on buying a used car with a trade in

Post by livesoft » Sun Jun 28, 2020 2:42 pm

eye.surgeon wrote:
Sun Jun 28, 2020 2:24 pm
livesoft wrote:
Sun Jun 28, 2020 1:54 pm
First, it doesn't matter what the dealer is offering the car at. I think you should be able to get it for 15% to 20% less with proper negotiation.
This is not realistic. Read this article written by a Jalopnik writer and professional car broker..
I wrote from my personal experiences and the experiences of friends who followed my advice. At least for myself, my experiences of buying a couple of used cars from dealers take precedence over that of a used car salesperson.
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msi
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Re: Need tips on buying a used car with a trade in

Post by msi » Sun Jun 28, 2020 3:15 pm

livesoft wrote:
Sun Jun 28, 2020 2:42 pm
eye.surgeon wrote:
Sun Jun 28, 2020 2:24 pm
livesoft wrote:
Sun Jun 28, 2020 1:54 pm
First, it doesn't matter what the dealer is offering the car at. I think you should be able to get it for 15% to 20% less with proper negotiation.
This is not realistic. Read this article written by a Jalopnik writer and professional car broker..
I wrote from my personal experiences and the experiences of friends who followed my advice. At least for myself, my experiences of buying a couple of used cars from dealers take precedence over that of a used car salesperson.
Recent experiences from the past few years?

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Watty
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Re: Need tips on buying a used car with a trade in

Post by Watty » Sun Jun 28, 2020 3:19 pm

Bohemiana wrote:
Sun Jun 28, 2020 1:37 pm
The other day we went to Dealer 1 to test drove the 2015, and we like it but they don't have a policy to let us take the car to our mechanic for a once over, which bothers us.
That would be an automatic disqualification in my book.

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eye.surgeon
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Re: Need tips on buying a used car with a trade in

Post by eye.surgeon » Sun Jun 28, 2020 3:26 pm

livesoft wrote:
Sun Jun 28, 2020 2:42 pm
eye.surgeon wrote:
Sun Jun 28, 2020 2:24 pm
livesoft wrote:
Sun Jun 28, 2020 1:54 pm
First, it doesn't matter what the dealer is offering the car at. I think you should be able to get it for 15% to 20% less with proper negotiation.
This is not realistic. Read this article written by a Jalopnik writer and professional car broker..
I wrote from my personal experiences and the experiences of friends who followed my advice. At least for myself, my experiences of buying a couple of used cars from dealers take precedence over that of a used car salesperson.
He's not a used car salesperson he's one of the most well known professional auto brokers in the country and buys hundreds of used and new cars a year for customers. Lots of respect for you though Livesoft, you're an asset to the forum and I'm not doubting your own success in negotiating car prices. Maybe you missed your calling :sharebeer
"I would rather be certain of a good return than hopeful of a great one" | Warren Buffett

livesoft
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Re: Need tips on buying a used car with a trade in

Post by livesoft » Sun Jun 28, 2020 3:28 pm

msi wrote:
Sun Jun 28, 2020 3:15 pm
Recent experiences from the past few years?
I last bought a used car in 2014. I bought a new car in 2018. I still own both of them.
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FrugalInvestor
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Re: Need tips on buying a used car with a trade in

Post by FrugalInvestor » Sun Jun 28, 2020 3:29 pm

eye.surgeon wrote:
Sun Jun 28, 2020 3:26 pm
livesoft wrote:
Sun Jun 28, 2020 2:42 pm
eye.surgeon wrote:
Sun Jun 28, 2020 2:24 pm
livesoft wrote:
Sun Jun 28, 2020 1:54 pm
First, it doesn't matter what the dealer is offering the car at. I think you should be able to get it for 15% to 20% less with proper negotiation.
This is not realistic. Read this article written by a Jalopnik writer and professional car broker..
I wrote from my personal experiences and the experiences of friends who followed my advice. At least for myself, my experiences of buying a couple of used cars from dealers take precedence over that of a used car salesperson.
He's not a used car salesperson he's one of the most well known professional auto brokers in the country and buys hundreds of used and new cars a year for customers. Lots of respect for you though Livesoft, you're an asset to the forum and I'm not doubting your own success in negotiating car prices. Maybe you missed your calling :sharebeer
Nah, Livesoft belongs here! :happy
Have a plan, stay the course, and simplify. And while you're at it, ignore the noise!

Outer Marker
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Re: Need tips on buying a used car with a trade in

Post by Outer Marker » Sun Jun 28, 2020 4:45 pm

The purchase of a new car and the sale of your old one are two separate transactions. The dealer is going to make money on both of them. For this reason, I prefer the private market on both ends of it. Even if you decide to buy through the dealer, don't conflate the two transactions.

It is relatively easy now with cars.com and autotrader to track down and advertise private deals. Most of the time, I've found what I wanted locally, but I've flow hundreds of miles to pick up the right car. The price of a Southwest airlines ticket was trivial to the thousands I saved on paying dealer commissions. I'd look for a private sale a couple of years younger than the dealer cars you are currently looking at - which should be about the same price, last longer, and have less risk due to the longer coverage of the manufacture's warranty. I always want a minimum of 2-3 years left. That piece of mind is worth more than a 30 minute once over by your mechanic.

Selling privately is also easy now through the same outlets. Just be reasonable in your own pricing relative to Blue Book and NADA - and under-price the dealers substantially enough to make it worth the buyer's while. Its never taken me more than a week to move my own good used cars.

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Bohemiana
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Re: Need tips on buying a used car with a trade in

Post by Bohemiana » Sun Jun 28, 2020 10:20 pm

Outer Marker wrote:
Sun Jun 28, 2020 4:45 pm
The purchase of a new car and the sale of your old one are two separate transactions. The dealer is going to make money on both of them. For this reason, I prefer the private market on both ends of it. Even if you decide to buy through the dealer, don't conflate the two transactions.

It is relatively easy now with cars.com and autotrader to track down and advertise private deals. Most of the time, I've found what I wanted locally, but I've flow hundreds of miles to pick up the right car. The price of a Southwest airlines ticket was trivial to the thousands I saved on paying dealer commissions. I'd look for a private sale a couple of years younger than the dealer cars you are currently looking at - which should be about the same price, last longer, and have less risk due to the longer coverage of the manufacture's warranty. I always want a minimum of 2-3 years left. That piece of mind is worth more than a 30 minute once over by your mechanic.

Selling privately is also easy now through the same outlets. Just be reasonable in your own pricing relative to Blue Book and NADA - and under-price the dealers substantially enough to make it worth the buyer's while. Its never taken me more than a week to move my own good used cars.
We've purchased most of our cars used from private parties, and we have only sold cars privately in the past. But based on what I'm seeing on Craigslist, Facebook, etc. private party transactions hardly happen anymore. I've only seen 1 private party Armada on the market within 100 miles of me and it's a 2010 junker.

I appreciate what you are saying to buy a newer car but in this case, we talked to our mechanic and he told us the Armada is built like a tank and can easily last 200k+ miles so with our average mileage of less than 10K per year will give us plenty of years. Also we are mainly using this as a tow vehicle to pull a travel trailer to campgrounds so it doesn't have to look great. The price difference between a 2014 and a 2017 is about $9k with the same approximately mileage and same options we value.

Big Dog
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Re: Need tips on buying a used car with a trade in

Post by Big Dog » Sun Jun 28, 2020 10:28 pm

with everyone staying at home, car prices have plummeted. You should be able to negotiate a good deal if you expand your search and are willing to travel to pick up your new car. As others have noted, selling yourself will get you the best value. But if you want a comp, bid out to Carmax, Vroom, caravana....

bob60014
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Re: Need tips on buying a used car with a trade in

Post by bob60014 » Mon Jun 29, 2020 6:17 am

Instead of trading a car in and possibly getting fleeced, look at getting a quote from Carvana or similar car buying service. I recently sold them a car and received a price that was more than a dealer trade in and slightly less than a private party sale for a vehicle in excellent condition. It was a easy, stress free transaction.

h82goslw
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Re: Need tips on buying a used car with a trade in

Post by h82goslw » Mon Jun 29, 2020 7:02 am

Take the offer of the online purchaser and be done with your old car if you don’t want the hassle of selling it yourself.
Then go in and negotiate the purchase of the Armada as a separate transaction. I’d go with the dealer who’d let you return it after an inspection.
I own a 2013 Armada Platinum (bought it used, one year old) with 110K miles now and it’s been a great vehicle. Glad to see your mechanic speaks highly of it.

Living Free
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Re: Need tips on buying a used car with a trade in

Post by Living Free » Mon Jun 29, 2020 7:32 am

I've used autotrader for the search for my two recent used car purchases (in 2017 and 2019; a 2013 honda fit sport and then a 2016 mazda cx5). I was unfortunately not able to negotiate the price down further (the dealership network had a hard no haggle policy) but at least knew that the price was good based on comparable offers from other listings and the blue book/nada values. Two things I'd add is to make sure that you get the total "out the door" price for the used car as some dealerships like to stack on a total of over $500 in dealer fees (one dealership I called told me it was either $700 or $750!); the other for a used car is the condition of the tires. Needing new tires and paying over $500 could be $1000-1500 more in actual cost. I did have my most recent purchase inspected by a local mechanic I found on google maps; the salesman at the dealership even drove it over there (free of charge) as I was buying somewhat remotely. I paid I think $60 for that service; $50-100 would be reasonable in my opinion.

I've heard of folks using the email strategy for new cars, but I can't see how to apply that to a used car purchase. I'd love to hear the strategy from livesoft or anybody else who does successfully negotiate down the used car prices from dealerships.

hudson
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Re: Need tips on buying a used car with a trade in

Post by hudson » Mon Jun 29, 2020 7:34 am

Bohemiana,

I would separate the old car from your purchase.
I would do all possible research and list the results for quick reference.
Of course, I'd include CarMax.

If I couldn't get an inspection, I'd want some kind of guarantee or a return guarantee.

Then I'd call each serious seller back and tell them that you were looking at several comparable models and that you were going to make a decision in say 24 hours...or in 8 hours. Ask for their best out the door (OTD) price. I would not talk much. I would not name a price. I would not get into a long discussion. I wouldn't share my research. You just want the OTD price.

Either use that information to make a decision or call around one more round saying, "I found a good deal somewhere else"...maybe share the price if you're close to having an apples to apples comparison. Tell the dealer, "I'm going to make a final decision in 3 hours." Wait 4 hours and take the deal that you like best.

Bottom Line: Establish yourself as a serious buyer, and give them a deadline. Let them name their price; give them some competition. You have three advantages: You are a serious buyer. You can buy somewhere else, and you're going to buy soon. For the dealers, they can fish or cut bait :)

After saying all of that, I recently needed to buy a used vehicle. I wanted a specific vehicle...with specific features. I went to a trusted local used car dealer and gave him my specifications, ball park price, and left it with him. He called me back 3 weeks later and said, "Come look at this." It was exactly what I wanted. It had a 90 day warranty. He named the OTD price, and I bought it...no negotiation. I didn't have to spend a day or two driving to dealers all over the area. I got what I wanted with maybe one hour invested.

Bottom Line: You don't always have to negotiate; sometimes you can just go for it; sometimes convenience rules.

TheGreyingDuke
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Re: Need tips on buying a used car with a trade in

Post by TheGreyingDuke » Mon Jun 29, 2020 8:01 am

Big Dog wrote:
Sun Jun 28, 2020 10:28 pm
with everyone staying at home, car prices have plummeted. You should be able to negotiate a good deal if you expand your search and are willing to travel to pick up your new car. As others have noted, selling yourself will get you the best value. But if you want a comp, bid out to Carmax, Vroom, caravana....
With new car production stopped for months, dealer inventory of new cars is depleted, I have not seen any screaming deals of new vehicles.
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells

2babogle
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Re: Need tips on buying a used car with a trade in

Post by 2babogle » Mon Jun 29, 2020 8:05 am

Don't forget that (some STATES, YMMV) trading a car in to a dealer will reduce the amount you're taxed on by that amount. If you sell outright private party, you'll pay full taxes on the buy.
Example:
15k purchase
6k trade in to dealer
9k tax value for sales tax calculation

Example 2:
15k purchase
6k private party sale
15k tax value for sales tax calculation

Taxes also vary per state so what this is worth varies. The point is that private party sales will usually be more but this is a minor factor to consider.

bloom2708
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Re: Need tips on buying a used car with a trade in

Post by bloom2708 » Mon Jun 29, 2020 8:12 am

Recently the dealer offered $8,500 for my 2013 trade in. This was against a $19,900 2015 vehicle.

I sold the car on Craigslist for $11,900. I then purchased the new/used car with cash. The dealer is a "best price" dealer. No haggling. No exceptions. The car was priced very well with similar year/mileage in the area going for $24,900. I did pay 5% sales tax on the $8,500 (had I traded). Still came out ahead.

You will always come out ahead selling the car yourself, but it is more work. I was lucky. The first person to contact me purchased the vehicle.
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