benzo555

iTrader: (11)

The problem is when you trade in a car no matter who it is they DO NOT go by the books whether kbb nada manheim etc. They have their own values when it comes to trade in and how much they get at wholesale.

daryll40

Yes and no. Car trading is exactly that....the dealer will pay as little as he can get away with when he buys and will extract as much as possible when he sells. He knows the market (as the "books"..Kelley, Edmunds, NADA which are all guides to what the market current is for a specific vehicle) and will play his best hand. Lexus was smart in that they only have 1 or 2 dealers per area. So they have a monopoly unless you use the internet and/or are willing to shop further out. And if your dealer is way off from the "book", then that is what you have to do.

tromly

Hey daryll40, never heard of the half rule but it makes alot of sense, thanks for sharing!

xfirechief

Agree with this all but when we traded in our '04 for our '09 we got $23,500 on a trade -in. We paid $40K for it in '03. Due the math, 5 years & got almost 60% back or am I mising something here??

daryll40

No, you're not missing anything. It's just a very rough rule of thumb. Sounds like you beat the rule and the dealer.

On the other hand did you REALLY get $23,500 for the trade in...or did you get $19,500 and they did not give you a $4000 discount that maybe a buyer without a trade might have gotten? (I just made up the numbers but you get my point).

Sometimes models hold their value better or worse. I doubt anyone with a 3 year old Pontiac is gonna get 50%, for instance. And last summer 3 year old big SUVs didn't come close to 50% after 3 years.

Again, it's just my rule of thumb: Automobile financial half life: Vehicles depreciate at a rate of half their current value every three years, give or take.

CometVR4

It also depends on the supply in demand. If you bought your '09 last year where supply of used cars were thin then I could see it. No one was really buying because of the credit crunch and the downed economy. Dealers went as far as sending letters out and used a spiced up term for trading in cars saying they'll "Buy your current car back" and pick out a new model.

Jack F

Your math needs to get another look.

If 20% per year is lost, then you are left with 51.2% of the original value after 3 years. Just basic math.

arima

ok, what did you pay for the 09?

xfirechief

Enough of trying to remember the numbers, I got out the old paperwork.

MSRP $45,980, Price delivered $26,500. On paper they gave us $17,500 NOT $23,500

SORRY ABOUT THAT. Senior Moment!

We paid 40K for the '04 without a trade-in.

mowmow

IF you really want to trade in your RX. Get Carmax.com to do the trade in, they give a way better value then dealer ever would.

arima

26,500+17,500= $44,000

are you saying you got a good deal on the trade in or a good price on the new car.

xfirechief

YES

We were happy with the price we paid. The '04 had 87K so I guess we got around $19.5K off of list with our trade plus we saved sales tax on the
$17.5 we didn't pay in cash. that was almost $1000.
So bottom line $17,500 + $1000 + $2000 = $20,500.

hesham1

The RX has excellent resale value. everyone knows you dont win when you a trade a car in to the dealer. but people have their reasons for trading in: convenience, perhaps a ton of major repairs coming up that a private buyer wouldnt touch, etc.

if you sell your RX privately youll get a good price for it.

daryll40

You did better than "Darylls Half Life Rule", but not nearly by as much as you originally claimed. In fact you are close enough that it still fits into the rule because it's only a "rule of thumb" and you are within the thumb.

mws4ua

It's supply and demand. The supply is not inside the demand.

Better to be called out on an internet forum by somebody you'll never meet than by your boss or something.