First used car purchase

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You mentioned in your original post what a dealer would sell the vehicle for, but you didn't mention the KBB of what the dealer would pay for the vehicle on trade in. When I traded in my minivan, I researched what I could expect to receive from the dealer as a trade in value. I recall reading a general "rule-of-thumb" that a dealer will pay the KBB "fair" trade in value for a vehicle, regardless of condition. I priced the trade in value on KBB so I had the numbers prior to trading in the vehicle and then visited the dealer. The "fair" trade in value was exactly what the dealer offered for my vehicle. (Side note: they had other trade in incentives from the factory, so the trade in had higher value than what I could expect from a private party.)

So, what is the "fair" trade in value on a 2010 Toyota Tacoma base trim with 22k miles? I'm seeing $9871 in my zip code (if that even matters). That falls right in the middle of the "blackbook trade in values" you posted. If that's what they paid for the vehicle, you can probably get it for $12,000 IF it has been sitting on the lot for a while and IF that amount is greater than the auction price.

To me it seems you are so worried about overpaying that you are not even willing to make an offer. Go in, offer $11,500. That's the "fair" private party sale price. Don't ever bother with the "excellent" price points unless it's truly an exceptional vehicle. Remember, You're not insulting a dealer with a low offer; you're enticing them with a possible sale. They'll say "no", so put the ball in their court and say "What price do you believe will get me to hand you a check and put your truck in my driveway?" If the counter offer isn't to your liking, give them your phone number, tell them "your going to buy a truck so call me if you want to sell it today".

If you're close to their target, they'll pull you back in. If not, they'll let you walk. If they haven't sold the truck in a week they'll most likely call.

Iveaset said:   ryoung81 said:   You should be able to find some of these things used by checking the used auto websites. If the offer prices are all close to what you are looking at there -- then it is probably in the ballpark for what they can sell it for.

Isn't that the same sort of mental trap that dealers use when posting MSRP? I don't think anyone here would advocate purchasing a new vehicle at MSRP just because all the other dealers are using the same or similar price point. Surely used car dealers have a similar strategy: inflate the asking price in hopes of an easy sale, while also leaving room to haggle when necessary.


Used car dynamics are different from new car dynamics. You can't draw MSRP analogies between the two. A dealer may have paid very little for a used car, or quite a lot - there is no set pricing for used cars as there is for new cars from the manufacturer. Used cars are also subject to the effects of "limited inventory" much more. Once you have identified a used car, there aren't that many other cars like it in the area. New cars are different, as there are many similar cars from other dealers. When a desirable car with low depreciation gets sold, it's less likely that the inventory can be replaced, so the dealer has an incentive to hold out and wait for an offer that's inline with the market. The more demand there is for a used car (i.e. high resale value), the more it typically cost to acquire similar inventory. This is in contrast to new cars, where replacement inventory is readily available and the more a dealer buys, the lower it typically costs from the manufacturer, so the incentive is to capture each and every deal.

I'm not saying you can't find good deals in used cars, but it would take quite a bit of luck, and probably not with a vehicle that has high resale value.

Make an offer to the Ford dealer on the truck. If they refuse, show them that you can buy new one for $1,000 more and start walking away.

If they want to sell it, they will stop you. If not, buy the new one.

$1000 difference is not worth the extra miles, questionable maintenance history, and possible abuse from the previous owner.

Heck, if I were in your shoes, $5,000 difference between new and used in this price range would be my cut off. Anything used within $5,000 of the new, is not worth it for me, and I would rather just get new.

Iveaset said:   
I was responding specifically to LiquidSilver's suggestion that PenFed's price of just over $16k would be good if it was an OTD price. Thanks for your input, but as I've mentioned before: Telling me that "Buying a 3 year old car to save 15% is just silly" doesn't tell me much. What about 20%? 25%? 25%? I could keep posting theoretical numbers, or if you have some methodology to share regarding how you determine what is silly and what isn't that might save us both a lot of typing.

Please understand: I'm not necessarilly asking "How much?", but instead "How do I determine how much?". By all means, teach me to fish instead of giving me a fish. Simply telling me "That's not how you catch fish" isn't helpful, though.
You threw out 2 numbers, $14900 and $16k. that means to me it's a big waste of time.

Now you say 25%? 30%? , those are all because of other factors, age, mileage, condition. You gave us a car and it's price, and a comparison to a similar model but newer. 15% is a easy choice. You can't throw out other percentages because you want to. It all has to do with the car you want.

As I said sounds like you WANT this car and NOTHING we say here will change your mind, but I HOPE someone who is reading this thread thinks twice about buying a 3 year old almost out of warranty auto for 15% below New. That is insane. If you really follow this advice, wait 30 days and see if it is still on the lot. If not, owells, look at new. If it is Then HAGGLE because they really want that junker off the lot. Oh and pay someone $200 to inspect it, possibly might have mechanical problems that will come up after you drive off.

forbin4040 said:   You threw out 2 numbers, $14900 and $16k. that means to me it's a big waste of time. [...] 15% is a easy choice. You can't throw out other percentages because you want to. It all has to do with the car you want.

As I said sounds like you WANT this car and NOTHING we say here will change your mind, but I HOPE someone who is reading this thread thinks twice about buying a 3 year old almost out of warranty auto for 15% below New. That is insane.


In my OP I made a point to note "The dealer is asking $14,988 (call it $15k) but I'm sure that I could get away with less. The question is: how much less?"

I've repeatedly heard that "15% less than new is a bad deal" and I agree that it is. You further suggest that I wait a while and then haggle. Well, no kidding! Nowhere in this entire process have I thought to myself "Well, $15k sounds like a good starting point". That's what this entire thread has been about: how do I determine my starting point?

If it's as simple as "Just pull a number out of thin air" then fine, just tell me that. Part of me worries that if I offer a number that's "too" low, though, the dealer will dismiss me out of hand and simply refuse to deal with me at all. If I'm wrong in this assumption then fine, just tell me that, too.

The reason I made the whole "20%, 25%, etc" comparison is that - since you feel confident in saying that 15% below new is not a good deal (with which I agree), there must be some number that I could throw out that would make you scratch your chin and say "Yeah, that's fair". I'm not asking what that number is, only how you come up with it.

As for my mind being made up, yes, I want this model but I could care less whether it comes from this lot or that garage, new or used, as long as it's a good deal. Not a sufficient deal, but a good deal. Isn't that what FW is all about?

Iveaset said:   If it's as simple as "Just pull a number out of thin air" then fine, just tell me that. Part of me worries that if I offer a number that's "too" low, though, the dealer will dismiss me out of hand and simply refuse to deal with me at all. If I'm wrong in this assumption then fine, just tell me that, too.Its as simple as that. If you want what would be a good deal, at least make it below NADA values. That is a starting point for getting a better deal than the average person.

The reason I made the whole "20%, 25%, etc" comparison is that - since you feel confident in saying that 15% below new is not a good deal (with which I agree), there must be some number that I could throw out that would make you scratch your chin and say "Yeah, that's fair". I'm not asking what that number is, only how you come up with it.Cars depreciate on AVERAGE 15%-20% a year. So a three year old car should be worth around 50% of new. This truck has lower milage which will lower the depreciation, as well as a low new car price, which will also lower depreciation. But it is not enough to go from ~50% to 15%.

Not a sufficient deal, but a good deal. Isn't that what FW is all about?It is, but what is a sufficient deal and a good deal is up to the individual. We are not going to be able to tell you what a good enough deal for you is. But we can say that for most, $2K less than new is not a good deal and $7K off is a good deal. Anywhere in between is all about how much YOU value your money.

LiquidSilver said:   Its as simple as that. If you want what would be a good deal, at least make it below NADA values. That is a starting point for getting a better deal than the average person.
Fair enough! Should I be looking at the trade-in value or the retail value as my starting point?

LiquidSilver said:   Cars depreciate on AVERAGE 15%-20% a year. So a three year old car should be worth around 50% of new. This truck has lower milage which will lower the depreciation, as well as a low new car price, which will also lower depreciation. But it is not enough to go from ~50% to 15%.
Good to know. Clearly there's a relationship between age and mileage when calculating depreciation for a vehicle. Is there an accepted "weight" for each one? For instance, could I say "This vehicle is 5 years old, therefore depreciated X% but the mileage is so much/little that I should adjust it by Z%"? In other words, is there a standard number of miles a vehicle is expected to accumulate per year?

LiquidSilver said:   We are not going to be able to tell you what a good enough deal for you is. But we can say that for most, $2K less than new is not a good deal and $7K off is a good deal. Anywhere in between is all about how much YOU value your money.
Noted and understood. Like I said earlier, I know that my comfortable "max price" is going to be different from yours and so forth, but I'd hate for my max to be foolishly high, or unreasonably low.

Thanks for your input, and for providing some background to it.

Iveaset said:   Should I be looking at the trade-in value or the retail value as my starting point?Retail or private party since that is how you would be buying it.Is there an accepted "weight" for each one? For instance, could I say "This vehicle is 5 years old, therefore depreciated X% but the mileage is so much/little that I should adjust it by Z%"? In other words, is there a standard number of miles a vehicle is expected to accumulate per year?No standard for a formula that I know of. Yearly mileage is 12,000-15,000. Think of how most warranties used to be, 5 years or 60,000 miles, which means manufacturers expected you to drive 12,000 a year.I'd hate for my max to be foolishly high, or unreasonably low. Foolishly high can cost you money. Unreasonably low will just mean you don't buy the car, and after enough attempts you will learn to adjust your price up and finally come to your purchase price. There is no shame is throwing out a low offer.

Since you know the model you want, head over to tacomaworld.com and do some research. Start up a thread there and see what people who know Tacomas well think is a good deal. Good luck.

LiquidSilver said:   [Answers]

Thanks!

Iveaset said:   taxmantoo said:   You haul refrigerators often, or is that just an excuse?


The refrigerator example is only meant to highlight the cargo capacity of a truck versus the passenger capacity of a car. For my personal vehicle, I prefer the former over the latter.



If you are going to be 'hauling' the crown victoria has a higher payload capacity. The leaf springs are very weak in the tacoma with most models having 2 leafs and a helper leaf.

Iveaset said:   That's why I'm here: I'm calling on the combined knowledge and experience of FWF'ers for their insight into what is (or how to determine) a reasonable amount to offer and a reasonable amount to be asked, and then I can see if the bell curve of my comfort range falls within that set.

FWF'er advice:
Don't go to a dealership.
Buy used, private party, under factory warranty. If you are in a heavily populated area, you should be able to find something that fits your needs on CL or Autotrader. Have the vehicle checked out by your mechanic. Both you and the seller win because they don't get raped on a trade in and you get a car under a transferrable factory warranty without paying a dealership. Factory warranties can be extended to 100K from toyota, so long as it is under warranty when you extend. Look up toyota forums and you'll find places you can buy a 100K factory warranty for $700.

I did this with my Accord Sedan w/ V6 6-speed manual transmission which was already under 100K powertrain warranty, which is much harder to find than a base model Tacoma - so don't think it can't be done.

I'll chime in as truck owner. Our family had a '97 S-10 V6 bought new over kept it 8 years got rid of it in great running shape (100K + miles). I'm driving an '05 Silverado bought new still running in great shape (100K + miles). My uncle's family has a manual 06 Tacoma bought new (over 200K miles). Guess you could put me in the buy new, drive til wheels fall off camp. Sure new autos take a bath on depreciation, but if I were I think just have to ask yourself how long you plan on holding on the truck? 2 year or less? Go cheap, buy used. Forever or as long as possible? I like new.

Or yeah, I could just get a Crown Vic, but it's hard to haul a refrigerator in the back of one of those...

But it WILL hold four bodies comfortably with no one knowing!!



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