Why is my trade in value so high?

[suprz]

I have a 2002 Flagstaff 228 popup that I bought in 2007 from the original owner for $4500.00. I was quoted in writing a trade in value of $5000.00 when I was looking.at used class c motorhomes at my local rv dealer.... I wasn't born yesterday, I know the NADA is around 2000.00..... So what's the deal? I am figuring the dealer just has a huge markup on the class c's am I correct?

[DwnSth]

Hmm, I would have liked at least the thought of a high trade value. Recently looking at a new trailer, Dealers price was high and trade low and absolutely would not negotiate a dime. I can take a hint. It's too bad, we really like the unit and were ready to buy.

[Mickeyfan0805]

JaxDad wrote:

Ummm, I'm not sure that's correct at all.

If they raise the trade-in by $3,000 and raise the sale price by the same $3,000 to offset it, the net amount of the sale (purchase minus trade in) is the same, so the taxes would be the same also.

Exactly. Taxes can be a reasonable consideration when comparing private sale to trade-in (the taxes saved off-setting, slightly, the difference between the trade value and the private sale value). In the case of a dealer, however, if a higher trade simply means a higher purchase price (as it would in most cases), the net taxable amount to you will be the same.

[Dutch_12078]

Many years ago when I was selling industrial, farm, and yard equipment for a living, we had a 10% floor discount limit on most deals. That meant I could come down up to 10% for any reason without managerial approval. That gave me some flexibility on trade-ins too. If a customer picked out $10,000 worth of yard tractor and accessories for instance from our standard price sheet, and then mentioned he had this old riding mower to trade in that was worth little more than junk price, I could offer him $500 for it to close the deal, and still be $500 ahead on my floor limit.

[JaxDad]

ford truck guy wrote:
It all depends on the Out The Door cost,,, IF you are getting a higher trade in , that tells me that you are paying more for the new unit.. That said - it also means that you will have less tax to pay ,as the trade value comes off the top.

Ummm, I'm not sure that's correct at all.

If they raise the trade-in by $3,000 and raise the sale price by the same $3,000 to offset it, the net amount of the sale (purchase minus trade in) is the same, so the taxes would be the same also.

It's IMHO just a sales trick. Most people know what their unit is worth on the open market, and if they've been to another dealer already they know what the average dealer will pay on trade in. The goal is that the customer will think they've hit the jackpot when they hear the dealer will allow more than double what it's worth and buy the new unit, regardless of the price.

[Rancher_Will]

You can thank inflation and the condition of the trade-in.

I have purchased and owned five new RV's since 1961.Four have been traded in on the new ones. I have a 3 year old Monty now that I bought new, trading an 11 year old JayCo 5th Wheel.

Every RV that I have owned was well serviced, kept clean, kept repaird and was in practically new condition when I traded for a later model only for the reason of changes in our camping lifestyle. We were happy with all the RV's and would have kept them expect for changes in use over the years.

Each time when I made a trade, I always negotiated the cash price of the new RV before I even mentioned that I had one to trade. When we reached an ageed cash price for the new one, then I informed the dealer that I had an RV to trade or sell and we negotiated a trade-in price for the used unit.

I have always received more dollars for the trade-in (or sale) to the dealer than the dollars that I paid for the used trailer when it was new. I know that the reason is two fold, i.e., we have had massive inflation since the 1970's and I have always had a fine condition RV to trade-in. I remember that when I bought the JayCo 14 years ago, I recived $350 more for the Conquest 5th Wheel that I traded in than I paid for the Conquest new. When I traded the Jayco for the Monty 3 years ago I receive $1,150 more for the JayCo than I had paid for it 11 years previous.

Inflation has always resulted in the cost of the new RV's more than was the cost of equal RV's years previous also.

[wbwood]

Are you happy with the final numbers on the deal? If so, go for it.

[mlh]

Most people are quick to say "sell it outright so you don't get screwed by the dealer on trade." Well you aren't getting screwed as bad as you think sometimes. Obviously if the dealer low balls you big time, then yes he is screwing you. If he offers you trade in value, or even above, then you should consider trading. The higher the number of you trade value, the less tax burden you will have on the new vehicle. I'll use a 2012 Ford Escape as an example. I just traded it in for a Jeep Wrangler Unlimited. The blue book trade value for excellent was approximately $13500. Yes, I got excellent for my trade....it can happen. The 3rd party value is listed at approximately $15200. That is a difference of $1700. My tax burden was reduced on my Wrangler by $13500. At a 10% tax rate, which we have, I had to pay $1350 less in taxes than if I would have not had a trade.

Just to clarify, I did receive a considerable discount on my Jeep that was in line or higher than all other dealers in the area.

So, had I decided to sell my vehicle outright, assuming that someone would actually buy it and pay the full retail price, I would have cleared a whopping $350. How much is your time worth?

[goducks10]

Depends on what NADA value they're giving you. If it's high book then they aren't discounting the newer unit hardly at all. If they're giving you wholesale value then you should be getting a considerable % off MSRP.
Normally they will give you wholesale and you should get 20-30% off the MSRP.

In all honesty though the value of your TT probably isn't enough to worry about wholesale or high book. Something in the $10-20-30,000 range will have a greater value between wholesale and high book.

I would try and sell it outright, then go to the dealer and expect 20-30% off.

[SRT]

suprz wrote:
I have a 2002 Flagstaff 228 popup that I bought in 2007 from the original owner for $4500.00. I was quoted in writing a trade in value of $5000.00 when I was looking.at used class c motorhomes at my local rv dealer.... I wasn't born yesterday, I know the NADA is around 2000.00..... So what's the deal? I am figuring the dealer just has a huge markup on the class c's am I correct?

Don't forget that the value of the dollar has diminished the past few years. :R

[et2]

Try not to tell them about your trade. Many times it'll cost you more if you do.

[bigdogger]

It's a sales strategy that works and it is working on you. You are focusing on how they could possibly offer you $3000 over NADA instead of you brooding on why they are offering $1000 for your trade. That is probably the true value since NADA anything is vastly inflated.

[dodge_guy]

So what was the price on the unit you were looking at? was it a good price before the trade-in?

When we bought our first new TT in 05 we looked at a Cherokee Lite at one dealer. they only offered me around $2800 for my Award TT. then we looked at another dealer and they had the exact same model with a couple extra options for $500 less and they gave me $5500 for my trade. so the first dealer was low balling me badly and lost a sale!

Check the prices on the C you are looking at, if it seems to be about the same price elsewhere then it sounds like a good deal! if you find the same model in the same condition and it is much cheaper then you know they are inflating your trade. do some research and see what you come up with!

[Ron3rd]

suprz wrote:
I have a 2002 Flagstaff 228 popup that I bought in 2007 from the original owner for $4500.00. I was quoted in writing a trade in value of $5000.00 when I was looking.at used class c motorhomes at my local rv dealer.... I wasn't born yesterday, I know the NADA is around 2000.00..... So what's the deal? I am figuring the dealer just has a huge markup on the class c's am I correct?

You're correct, they could give you $10,000 if they wanted, they just add it to the other end. Put them in a position where the purchase is a real slim deal and watch the value of the trade go down.

[discovery4us]

See if the trade in is contigent on the purchase of another unit. If not take it down and get your $5000.