Trade in Value
 

I was at the dealership 2 weeks ago to talk to my salesman about ordering a new 4.8 loaded and when we got to the part of the deal about taking my trade in this is where it got ugly. I own a 2003 4.6 with 55k on it fully loaded with rear dvd system and its CPO in beautiful condition with a KBB trade in value of 35k in good condition, and they told me the most they could give me is 28k, while taking only 2% off the new X5. This would be the third bmw I bought from this dealer and salesman, the first two were leases so I never had to trade anything. Has anybody else experienced this type of difference in what KBB says and what the dealer will offer ?

KBB is an estimate, the only real tell would be to go to another dealer in your area and see what they say.

And, the value really varies by location, as many dlrs have
lots full of used X5s.

Your stlr is stuffing you at both ends though, imo:
offering lowish on your trade and that big "2%" off
MSRP. Go back and see him in August when gas is
pushing 4 bucks and his lot is stuffed with new E70s.
GL,mD

Trade in values are basically worthless to a dealer-at least when they are the ones taking a trade in. About the only thing trade in values are good for is an asking price for a private seller. A dealer is generally going to go by what the particular vehicle is bringing at the auction, and at best would reference the NADA loan value. Then again when if they put it up forsale on their lot, they will ask full retail-depending on condition of course.

It's the nature of the beast-it sucks, but its just the way it is. It's how they make their money.

One of the best resources is edmunds.com. Also, the dealer will always try to pull this. My suggestion. Sell the X on your own. Not only will you make more money, you can walk in the dealer with a smirk.

In their eyes, they will either get you on the trade or the new car. Either way they get paid. That is why I NEVER GO IN WITH A TRADE!

Gives me way more negotiating leverage.

Lemme guess, you were shown the Galves "Black Book" value. Galves is the kiss of death for car pricing. I love how dealers will insist on giving you Galves and then selling for NADA.

EDIT: Goto - http://www.galves.com/tradein/accupr....jsp?dealer=25
On the 2nd page, put in junk info into the required field. Notice how many of your options are not even considered. That nice rear DVD entertainment system might as well not be there. I'd even take it out and Ebay it because the dealer does not assign any value to that option.

EDIT2: Biggest crook I ever encountered was at Jake Kaplan Range Rover in Norwood, MA. The shady used car manager under valued a friend's X5 3.0 by $8,000. When caught in his lies, he tried to back track. Needless to say my friend did not purchase her her RR Sport SC there. Vote with your wallet and walk away if the deal doesn't look right. There will always be more X5s to be had.

I'd considered trading in an X5 4.4 a few years ago. When they came back with the value, I laughed at them. The dealer hadn't included any options, and they used a 3.0 as the base model.

It was a complete smoke and mirrors scenario. As soon as they determined that I knew what they were trying to do, they started talking to me about what "payment" I was trying to achieve. They were stumped when I said I was paying cash.

I picked up my things and walked out.

I make it a point of settling on a price before even talking about a trade with a dealer. It's not relevant, in my opinion. If they ask if I have a trade, I ask them why that would make a difference in the price of a vehicle I'm buying. That generally ends the conversation.

Joel

i had the same car w/ less mileage and my dealer was offering the same amount.
i walked. advertised my X5 on here and other various sites. sold it last weekend
for $37k. my advice, sell it urself.

Remember you only pay sales tax on the difference, so a $30,000 trade is worth roughly $2500 - $2900 in tax savings....factor this in before deciding to sell it your self.

My advice, try another dealer.

if he's selling it, where does sales tax come into play? the buyer is responsible
for that, aren't they?

Wholesalers are backing off on gas guzzlers also. With the increase in gas prices, demand is down.

When you trade-in a vehicle at a dealer you only pay sales tax on the difference as opposed to sales price on the full purchase price...for example:

$70,000 new vehicle
$30,000 trade-in
-----------
$40,000 (actual sale amount)
$3,600 9% sales tax
-----------
$43,600 total cash price of vehicle

-VS-

$70,000 new vehicle
$6,300 9% sales tax
-----------
$76,300 total cash price of vehicle



TAX SAVINGS= $2700 (if you traded in)
So when factoring the cost difference of selling it your self vs trading-in the used vehicle add roughly $2700 to the dealers offer to get a fair comparison.

Option 2- When you buy your new X...as a final negioation tell your dealler he has a deal if they will give you a "Courtesy Trade".
This means when you sell your older vehicle, the dealer will handle the transaction (on-paper only) and show your sale as a trade-in so you retain this tax saving even though you didnt actually trade-in.

interesting bit of info. X5FX. i've never thought of that. i've never heard of
ur Option 2 either. that would be real cool if they could do that.

I have used option 2 several times, it is very common.

KBB on my car was $25,000 and the dealer first turned me down since they had so many already.
Then made some calls and offered me $17,800.
Carmax took 2 hours and told me $18,500.
I sold it on craigs list for $22,500 in a week.

KBB is notoriously optimistic for trades. My dealer goes by what is happening at auction. You can expect to get hosed. What's ever more F'd up is that there is no taking into account the options of condition of your car. For example, I went in to me dealer on Monday and asked them what they'd give me if I traded in my '06 330i that is almost loaded and in pristine condition with only 7600 miles. The average price at auction for ALL '06 330i's was about $32,000 with a high of $33,---. There was no addition for navigation or premium package, etc. :mad: The dealer's appraisers would use the auction average as their price and maybe add a little for the options but it was still extremely low. Just FYI the private party price for my 330i would be about $42,000.

The biggest screw job is when they give you bottom dollar for your trade and charge you top dollar for the new car. It's typical of most dealers, as others have already stated.

Ya... So unless your desparate or have to unload it immediatly.... sell it on your own and your sure to make more.

I like to see what the rip off places offer and then ask for something in between that and KBB. You will normally get some bites. I actually had some people offer me Carmax price as if I was desparate.

When I sold... I was just happy to get more than the dealer offer.

Not sure this is true. What state do you live in?

The dealer is going to apply your trade-in as a "down payment" and the taxes will be calculated from the full retail amount of the vehicle.

The state is going to lose money and would NEVER permit that to happen. Many people used to sell a car for $1.00 but it was actually worth $30,000 thus keeping the tax payment low for the buyer.

Now most states if not all... calculate the tax on the sale price or the true value of the car, which ever is greater.

Thanks for all the great info. I'm in no rush to unload it so if i end up doing anything i will sell it myself. I live in mass where they will take the amount of trade and minus it from the sale price so you only pay the difference in sales tax

Not in Louisiana, I also doubt most states do this...its called double taxation. You have already paid sales tax on the first vehicle.

EDIT:
Actually looks like MOST states DO ALLOW this to happen, as I originally stated:
http://www.michigan.gov/documents/485_72279_7.pdf
http://www.safecarguide.com/gui/old/disposing.htm
http://www.window.state.tx.us/taxinf.../tx96_116.html

the list goes on...just try google.

looks like Virginia is one of the few states that does not do this, but its likely because you only pay 3% tax whereas most states charge 7-9%

This just doesnt happen anymore. States use book values to determine tax base.

:withstupi

Washington State does the same thing. Only California charges tax twice (that I know of) I don't even know how California gets away with it. That is double taxation. Why? You already paid tax on the price of the original car. Every other state you get a tax credit on your trade.