DawgTalkers.net Forums DawgTalk Everything Else... New car/trade in questions

Was at the jeep dealer today getting an oil change on my wife’s 2016 Dodge Journey, they did an appraisal on it, offered $14,000 for it, we owe $9,100 on it. Well it got us thinking, sonwe looked and found a 2020 Jeep Cherokee Latitude final sticker price $23,385.

Well neither one of us is a good hagler on cars, never have been. Should we try to get more for the trade in? Should we try to get more off the final sticker price? After looking over our numbers we think with nothing else changing we should be financing around $20,000, 60 months, with a monthly payment of around $335.

What do you shrewd car guys think? She really wants the car starter, and heated seats. Priced starter for the Dodge Jouney and we looking at $900. So adding that is a no go.

My suggestion would be to go to carmax and let them give you a quote a well.

Also get on Kelly's Blue Book webpage(KBB.com) and answer their question to get a car value from them. The issue with this is that you might think it is in good condition but the dealer might say average or perhaps it is actually in excellent condition. But the website gives you guidelines to assist you with your determination and it is easy so you can run all of them in 10 minutes

I think this would be a good start and not a lot of work.

The dealers offer is typically going to be the lowest offer you get but not outrageously low. By taking their offer you are paying for the convenience.

GMDawg should be able to give you some pretty solid tips here.

I actually thought that offer was high, knew we were ahead, but didnt think $5000 ahead.

Did they offer $14,000 cash? Or $14,000 to trade?

There's a difference. I only did it for 13 years.


Easiest way to explain it this, talking new vehicles

There's a sticker price/msrp. Let's use 20,000. That's msrp. Dealer probably paid, with hold back included(completely different topic) Around 18,000.

Say they want to make $500 on the sale (plus holdback, again, completely different story). That means they could sell it outright to you for 18,500, and make 500, plus the holdback. (hold back is typically 3% of the sticker price that the manufacturer builds in to the msrp to help the dealership off set floor plan costs, etc) Getting too detailed.

Sticker of 20,000 - they only want 18,500 out of it. That gives them "room" of 1500. What's that mean? You could walk in with a broken bike to trade in, and they could say "we'll give you 1500 for your bike"

Bam, you think you're taking them to the cleaners. Nah, they made their 500, and got your bike for free.

Take that to the next level. Say your trade in is worth 15,000 retail. They told you they'd give you 14,100. Subtract the 1500 'room', what they're really giving you is 14,100 minus 1500, or, true dollars, 12,600.

They'd put your trade in on the lot for, say 15,500, and only have 12,600 in it, plus pack, plus oil change, detailing, etc.

On new vehicles, dealerships make their money on the holdback, but more so on the financing.

I did F&I (finance and insurance) for years. THAT is where dealerships make the real money.......it's called the back end.

Dealerships, if you're really interested in a vehicle, will take your info, run your credit score, and presto - they get your credit score and they know what they can do.

Banks, GMAC Ford, etc, offer dealers several different interest rates, depending on ones credit score.

Good credit? You may qualify for a 2.9? loan - in which the dealer may get 2% kickback from the creditor. But, the dealership (this is new and used by the way) may tell you "congrats, you qualified for a 4.49% rate. The dealer, new or used, just jacked your interest rate, and they get a cut of the interest - i.e. the bank pays them more for jacking your rate up.


Now, if it's gmac, ford motor, chrysler whatever they call it............and it's 0% interest? That's legit, 0% interest, and the financer pays a flat fee to the dealer for doing the paper work.


It's nothing for a dealer to make a $500 mark up on the vehicle on the 'front end' - sale price, and make $2,000 or more on the 'back end', the finance part, the payment protection thing, extended warranties, etc etc. I did it for a living.

Think you can get a deal walking in and paying in cash? Dealerships generally don't like that.

Sold my parents several vehicles. They just paid cash - well, check. Obviously, I never screwed them over. But the last 2 they bought I just said "dad, it's 0% interest, and that's exactly what it means." (this was through GMAC) "Borrow the money at 0%, even for 3 years, and make payments. Keep your money in whatever investment it's in, even your savings account, you'll come out ahead."

I can see they already have you talking 'payment'. Although, not following correctly I guess. Borrowing 20 G and 335 payments for 60 months.....well, 335 X 60 comes out to 20,100. Was it a 0% loan?

'Payment' is where people get in trouble.......well, maybe not trouble, but where the dealership makes big money. PUt you in a loan at say 6%, when they sell the loan to the bank at 2.9%. The difference goes to the dealership. Good F&I guys are the lifeblood of dealerships.

After I was out of the business, we bought an H3, from Ed Schmidt Hummer, in Toledo. Walked, test drove. I knew the msrp, I knew the invoice amount. (amount the dealer pays) I knew the value, retail, of our trade in, and also good idea on trade value. I also knew, and know, I dealer has to make money to stay in business.

Sales dude came back from the sales managers office with an offer. Long story short, I looked at the offer, told him what I would do, knowing that the bottom line price was what mattered. I explained where I was coming from, and why, and counter offered by 800. "If you can do that, you'll make money on the front end, and you'll make money on my trade in, and I don't have to worry about selling it myself. Plus, I'll be back tomorrow to pick it up. Already have the financing done."

He got the approval. We shook hands, cause that's how I work.

Got home, and Tom Konz called. He was the f&i guy - used to be the gmc sales manager at Ed Schmidt in Perrysburg Ohio....I had done so many dealer trades with him......He said "hey, I know you. I know you're coming to get an H3 tomorrow, and you're financing it through your local bank. Look, I know you don't want pp, I know you don't want any of the stuff I sell, but, what interest rate are you getting at your bank, because based on your credit, I can get you 2.9, and that pays us 2%. Would you consider letting us do the financing?"

Well, my bank was at 3.9%. I said yes, it'll save us money, just don't jack me around on it. He said "you know the business......I can't sell you anything, but at least we'll get the 2% of the loan."

I could go on and on about this. I think I have.

Chrysler Capital is offering 0% apr for 72 months. We both have credit scores over 800, so we should qualify for it.

Arch, you busy tomorrow and maybe in the columbus area? Lol

LOL I was in Columbus last week. But, as per your p.m., it does sound like a good deal, based on my not having done any research on your trade in value - the worth of it.

And yeah, if your credit scores are over 800, you WILL qualify, no doubt - unless your debt is excessive...........and even if it were excessive, over 800 is going to get you the best deal anyway.

As banks, or gmac, or Chrysler say "we're just buying paper"

Just mind your business in the F&I office. Take notes, take calculator. Read what you're signing, really.

But, on the info you gave in the pm, sounds good.

Keep in mind, at times manufacturers hand out spiff's on reaching a certain number of sales. That's a good thing for you, IF it is indeed part of what's going on.

Don't focus on what your getting for your trade. Don't focus on a discount off of sticker. Worry about the difference that's all that matters. $23,385 - $14,000 = $9,385. Haggling made easy.... just offer them $8,000 difference instead of $9,385 difference. The worst than can happen is that they say no.

One other thing to check. Is there a rebate on the car that you are passing up to get the 0% financing??? Sometimes it saves you money to go with a higher interest rate, take the rebate and finance less. You may pay 2,000 bucks interest, but if you finance 2,500 or 3,000 less on the Jeep your actually 500 to 1,000 ahead.

Almost good advice bro.

Look up the NADA wholesale value. Nobody in the car business ever uses KBB for appraisals. They use NADA and they look at auction reports. Also remember that the NADA wholesale price is the car's value - any repairs or work it needs. If book s 12k but you need 300 in body work, 4 new tires, and a new windshield, the cost to repair and replace those items is deducted from the 12K

All good advice.

One other thing I would add is this: There are often factory to dealer incentives, and they are often "leveled". When I sold Dodges, as the end of the month approached, we made some truly stupid deals, because it would help us in the end.

For example, suppose our number on Caravans and Grand Caravans for the month was 75. (sold and delivered) We received leveled incentives ..... we might get $250 per unit sold at 25 ...... $500 at 60 .... and $1000 for 75. (retroactive to the 1st unit sold and delivered) If we were short of the number around the 25th of the month, or so, we got really stupid on some deals.

I don't know for sure if this is still the case ....... but it was a huge motivator for us.

We got kickbacks on the horse and buggies we sold back in my day.

I am not familiar with NADA. Good stuff.

I'm not an expert like GM is. But the NADA is the National Automobile Dealers Association. They pretty much have their own guidelines of value that they go by that isn't predicated on anything else.

At the very least, go to Carmax. Pretty much anywhere will match their trade in value if you show then that piece of paper.

This is the sticker:

MSRP:
$30,085
Dealer Discount:
-$2,450
Internet Price:
$27,635
Jeep Offer:
-$4,250
FINAL PRICE:
$23,385


What would you offer?

Does that discount include the package discount on the sticker, or no?

Yes it does

I buy alot of cars and don't keep very long..lol, its my biggest vice. One thing I always do is treat the trade and the purchase separate. I don't usually even bring up trade until I've negotiated the car. One thing I've done in the last couple cars was sell my cars to Carvana or ALGo. They will usually always give you enough more than the dealer to make it worth it.. Example from my wife's car I just traded in beginning of month. It was a 2018 charger scat pack, Trading in on a BMW M340i, Dealer was going to give 34700, Carvana 36400 and I called ALgo and they said what was carvana going to give you, i told them, they did a video appraisal and gave me 37000, so not huge but def enough to make it worth my while. NADA is def. the most accurate for consumers, unless you know a friend with access to Manheim

So, if I got this right, you sold your car to Algo for 37,000, making you an extra 2,300?


And I'm assuming the bmw you bought was new?

In Ohio, sales tax on new vehicles is figured on the selling price, if there's no trade in. If there's a trade in on a new vehicle, sales tax is paid on the difference between the selling price minus the trade.


I don't know bmw's, but did the extra 2,300 cover the higher sales tax you paid?

Or did you buy it not in Ohio?

Wait a couple months until November. By then they will be desperate to sell the cars and give you the best deal. Also, one time I bought a car entirely negotiating via email. I knew I wanted it, I didnt need to drive it. I low balled them and they agreed.

I got a brand new Mazda 3 for 11k. It was a hell of a steal.

Well if we went with the 0% all the rebates went away. So I said what is the best rate we can get, he said 5.5%, I said try again, he cMe back 3.99%, I said 5th 3rd is 2.74%, he came back and said 3.39%. I said what is the best rate of the over 40 banks you work with? With the wife and me both having over 800 scores, we should get a really good rate. It was like they didnt want to sell us the car, we agreed on the price, just not the financing, must have thought we were stupid.

Good on you. Before anyone buys, know your stuff.

Remember what I said? f and i people CAN make a dearlership a lot of money on the back end. And that's fine, they have to eat also.

Bmw was new, I live in Florida and it was a lease, the extra amount went into MSD with residual of 61% and a base mf of 0.0100 lowered with msd to .0065 with zero drive off . So the money works for me for a few years and I just get it back later lol

That’s the truth. You’re almost always going to pay points financing with dealership unless a promo factory rate. And beware of hidden fees

This.

Don't let the dealership confuse the two or confuse you. What is the deal I am getting on the car? What is the trade in value you are giving me?

They will try and make you warm and fuzzy by inflating the trade price when it's really just built into the price of the car you are buying.

Was reading this thread and started to wonder why there is no cottage industry where people offer to negotiate the best deal on the car you want for you. With the price of cars rising so high, you would think a form of "realtors on both sides of the sale" would pop up for cars too. Just a though.

That is a really good idea, surprised it hasnt been done yet. I think it would be a booming business. Wish I had the knowledge to try it.

I had given thought to doing that.........

i vote keep your current... but I also have had the same car for 13 years... I appreciate not having a car payment

Wife was so frustrated she has decided to keep her car, for now, lol. I guess it’s nice to have $5000 in positive equity, when and if she does want something else.

I'm on my 3rd set of tires for my Edge. I've never owned a car long enough to have 3 sets of new tires on the same car. I hope to add a 4th set.

Get a price from CarMax on your car. Negotiate the price of the car. Don't even talk trade-in. Once that is set, talk trade-in value with the dealer, don't talk about your carmax offer until after their offer. If they don't at least match the trade-in, tell them you'll go there instead and be back. They almost certainly will at least match at that point.

I've done it several times over the last 10+ years, each time netting me anywhere from 500-1500 more in trade-in value.

We have found the car we are buying my daughter. 2021 Kia Forte GT, I will drive it til I feel she is good enough/responsible to give it to her, and she will drive my 2017. There are good deals in Ohio, but I have found one in Indiana, with an upgrade to the GT2 package for less than any deal for just the GT package in Ohio.

My questions are, do I pay IN and OH taxes on it? What are the downfalls of buying one out of state? Like I said this is what we are buying, just trying to find the best deal, and it is in Indiana.

Also, since we didn’t buy the Cherokee, we haven’t bought a new car in over 3 years, what would you estimate the final taxes, title, fees be on $20,000.

You'll pay Ohio taxes. When you go title and register it in Ohio you'll pay the taxes then. At least that was the case 10 or so years ago.