How long after buying new car before you could justify trading?

[Pigeon]

I think trying to sell it privately is going to be your best bet.

Hondas do hold their resale value quite well in general. I don't know about that model, but when we were looking at Fits a few months ago, there was almost no difference in the price of a slightly used one and a new one. The dealers had lots of one year old models sitting on the lot. Now, Fits are fairly inexpensive and there isn't much room in negotiation because there are really only two versions, both pretty basic.

I can completely understand why the dealer isn't going to give you nearly the same as what you paid because it's going to be hard for him to sell it if he's got new ones on the lot and he's got to get almost the same price for the used one.

If you sell it privately, you might be able to find somebody willing to take it for a couple thousand less than a brand new one.

 

[Papa Deuce]

This is no help right now, but for the future, you can ask the dealer to let you use the vehicle for a whole weekend, just to see if you like it. I have done this 3x now. Twice I bought the car, and once I didn't.

Dealers have never given me a problem with this.

 

[BC]

That is exactly why we ended up with a new one. We went to look at a used 2009 that had 8,000 miles on it. There was $800 difference in the price!!

 

[LindaR]

Well.....that's part of what I meant when I said you needed to do your "research!" Because of the Cash for Clunkers program, dealers have had great sales and people lining up to buy whatever is available. Nobody should ever buy on the spur of the moment. Research on the web, then go out and drive vehicles you are interested in, come home, do more research (car buying sites have alot of helpful info, narrow down your choices to one or two vehicles that you would be happy with, arm yourself with information BEFORE going to actually purchase. Visit other dealers in other locations (that's why they are called "competition"), talk price, and play one dealer against the other. YOU need to be in control and walk away if things don't go your way. Once you leave, you don't go back.

 

[LindaR]

PLEASE tell me you didn't pay sticker price or even work down from THAT figure!!!!

What about rebates, incentives, and holdback?

 

[IDoDis]

The depreciation happens because the price you paid for the car is not what it is worth. The salesperson got a commission, the finance office got a commission, the new car manager got a commission, the dealership gets a piece of the pie to keep the lights on, and Toyota gets a chunk. "Dealer invoice" does not mean dealer cost. When someone says they got a car for $2K under invoice, that really doesn't mean much. The dealership is still making money.

There are unpublished incentives to dealers that vary from month to month and can change for the dealership depending on the volume of vehicles sold. The higher the volume, the more $$ the manufacturer gives the dealership that month. All of those things add up to the $3 - 5K that you lose when you try to resell it.

If the dealership bought the car back from you after it has already been titled, there would not be any monetary incentives from Toyota to the dealership to sell that car -- hence the $3K drop in price. Plus, they wouldn't just buy back the car out of the goodness of their hearts, because even if they resold your vehicle for $1K less than what you paid, they'd lose the 3K due to the incentives not being there. They would only buy it back if they could then increase the price to resell it. If they increase it so much that it costs the same as a new car, people won't buy the used one (which is what happened in your case).

The depreciation rate of vehicles is highest when they are new. I think if one keeps a car past 7 years, the book value drops a lot less. For example, I have a 13 year old car that would sell for the same price today as it would 6 months from now. It really wouldn't matter. A year from now, it may be worth $200 less, but a new car can depreciate in price $200 or more per month based on the book value that dealers use as their guide for pricing used cars.

Trying to sell it on your own is not impossible, but could be very difficult because buyers often look for the cheap incentive financing from the dealer. You may get lucky though and find someone that would be willing to buy for $1K less than what you paid and may be able to pay cash, but if you didn't negotiate a good price when it was new and this person could negotiate with the dealer and get it for 1K less than what you paid, then they wouldn't buy it from you.