Trade in values

[tlbuser]

The true winner is the guy who can select exactly which model to buy (or sell) at exactly the right time.

Well, I can tell you who that guy isn't Thanks for the explanation and links, I found them very informative and enjoyable.

 

[Dargo]

Dargo----2008 Chevy 2500 HD 6.0L Auto GAS STD CAB "hit" hard in the right rear, owe 27,600.00,new replacement $22,600.00 repair $15000.00. total with gap paid off--- with no truck(they keep truck for salvage)--- what to do in this market. Driving old truck starting to look real real good???? you'll's thoughts!!!!

I wish I had that crystal ball which would allow me to give infallible advice, but nobody gave me one. All I can do is give my personal opinion based on being in this industry for about 20 years. That opinion would be to find a nice truck you like that is a year or two old that you can buy for a reasonable price. You can use the KBB trade in value guide I mentioned as to figure approximately how much the dealer has in the vehicle and go from there. Remember, the dealer will need to make some money to stay in business. However, with sales being slow, now is a good time to drive a hard bargain. Used vehicle grosses (profits) at dealerships have generally ran between about $1500 and $2000, depending on several factors. Right now, most dealers will be happy to take a $500 profit on a used pickup. If you can find out how many days the dealer has had the vehicle in his inventory, you may be able to drive an even better bargain.

The other thing you mentioned is something that I failed to mention earlier, and that is GAP coverage. For those who don't know the auto industry lingo, GAP is an optional addendum that can be added to your loan contract at the inception of that loan. What it does is guarantees to pay any "gap" between what the insurance company establishes as a replacement value for your totaled or stolen vehicle and what you may owe on the vehicle. Your auto insurance company doesn't care what you owe on your vehicle, they just go by what their computer says is it is worth. Many people incorrectly believe that their auto insurance will pay off what they owe on their vehicle. This simply is not the case. With values falling so fast, if you borrow more than about 80% of the MSRP on your loan, GAP coverage can be a very palatable option. Several states limit the price dealerships can sell GAP for. In Indiana, for example, the state places a cap of $420 on the selling price for GAP. In most cases that is a good value, especially if you don't have a large downpayment. If you live in a state where they charge more than that for GAP coverage, remember, that price is negotiable. If you have no money down, or especially if you are upside-down (owe more than it's worth) on your trade, GAP is a really good idea.

Anyway redneckford, I'd try to find a real deal on a new (to you) truck that is a year or two old and drive a hard bargain on the price. Good luck!

 

[ultrarunner]

Car Dealers I know in the Oakland area won't even look at a truck trade in unless it is $1000 to $1500 "Back of Book"... meaning below KBB wholesale value.

Also, KBB sends subscribers "Hot Sheets" that indicate if a vehicle is dropping (or gaining) compared to current book.

Like Dargo said... dealers are scared and the majority of the sale's staff is not getting paid... sales are way down.

Last night on Night Line was another example. Several people were profiled about fuel cost and home foreclosure... the big example was a plumber spending $1,600 mo to fuel his commuter F150... this type of story sends chills in the market for the simple reason it makes people think... that could be me.

Not very relevent, but I mention it anyway. My Grandfather started his Dealership in the 1920's and I had the chance to work with him in the 70's which was a very dark time to be in auto sales...

I often would hear him advise people they could not afford a particular car/trunk unless they could pay it off in 36 months for a new vehicle or 24 months on a used one.

He had generations of loyal customers who would often thank him for keeping them from getting up-side down on the car note.

The choice was either to shop for a less expensive vehicle or put enough down to afford to pay the note.

He was accustomed to seeing, time and time again, young people buried under a car note on a car they no longer needed (as in now married and need a family car) but could not afford to get rid of...

 

[ddivinia]

I tell ya - I never considered buying GAP insurance, leasing, etc but many of these things look smart these days. I think as the GAP claims go up (which they will), I bet GAP gets harder to purchase.

D.

 

[redneckford]

What about '07 models that are 5/6000 less than a '08 that are new and still on the dealer lot. What would be a magic number that would be "Fair" to me and the dealer. "Fair" in the fact that he gets it sold and stops paying floor and I get a new truck,new warranty (100,000 bumper to bumper)at used truck price and new truck financing, 0% etc!!!

 

[Dargo]

What about '07 models that are 5/6000 less than a '08 that are new and still on the dealer lot. What would be a magic number that would be "Fair" to me and the dealer. "Fair" in the fact that he gets it sold and stops paying floor and I get a new truck,new warranty (100,000 bumper to bumper)at used truck price and new truck financing, 0% etc!!!

Wow, that's a really good question. At some point in time it's not whether the dealer is going to lose money on a unit, but how much money he's going to lose. That's kind of how I bought my last truck even though the truck I bought was used. It came down to 'how much' the dealer was willing to lose to get that truck off his floor plan and go buy some Civics, Focus, or the likes. If you find a dealer who still has some new, left over, 07 pickups I'd think you could drive an extremely hard bargain that would still make the dealer smile to have that unit off his lot. I guess that figure is very subjective. It would be a really tough call. If the dealer is honestly losing $3000 or $4000 (after all rebates, incentives and holdback) on the sale, might he really be better off going ahead and selling the unit that is just sitting on his lot depreciating?

And, as ultrarunner alluded to, not all car dealers are crooks. Just like in any industry, you have some very good and ethical operators and you have some bad apples. In general, with regard to pickups and SUVs, now is the time to buy rather than sell. Is it the best time to buy or should you wait a bit longer? I wish I knew. Either way, it is a good time to buy no matter how you slice it if you need a pickup or SUV.

 

[Highbeam]

Dargo, I appreciate your excellent replies to this thread. You've outdone yourself again!

I am planning on taking this wonderful opportunity to buy a loaded 3-4 year old dodge diesel at less than 50% of new cost. They are selling for 18-22000 in my area. Yes, this is a good time to buy.

My old 98 K1500 pickup now has 170,000 miles on it and has been devalued by forces other than the lousy resale market.