Trade-in Negociation Tips

[ilovelexus2007]

Hey everyone,

I'm planning to trade-in my RX400h for the LS460, I did it through the Lexus website, and their estimate Black Book gave me approximately around $36,000 - $40,000. I believe I can sell it for a lot higher price on my own.

I was wondering if anyone has any experience with negociating for trade-ins, I mean how much do you think I could negociate up to based on that estimate (amount and percentage?). I do see there is a benefit of not paying taxes with trade-in, does it worth it to sell on my own? Any tips would be greatly appreciated. Thanks.

[RX400h]

What year is your RX? I've found that the best way to determine what your vehicle is worth is to take a look at what others are asking in the Autotrader (www.autotrader.com) in your area. Look at the condition and mileage of those listed. Almost always, dealerships will offer substantially less than the average of those you find listed. After all, the dealership has to make a profit after bringing the vehicle up to full-maintenence status and including a guarantee with it. Some states don't allow the dealership (and you) to get out of paying tax on the full amount of sale.

[ilovelexus2007]

What year is your RX? I've found that the best way to determine what your vehicle is worth is to take a look at what others are asking in the Autotrader (www.autotrader.com) in your area. Look at the condition and mileage of those listed. Almost always, dealerships will offer substantially less than the average of those you find listed. After all, the dealership has to make a profit after bringing the vehicle up to full-maintenence status and including a guarantee with it. Some states don't allow the dealership (and you) to get out of paying tax on the full amount of sale.

Correction: Their Black Book at the Lexus dealership gave me $33,000 - $37,000 estimate (I accidently mistype the value in got at KBB). It's a 2008 RX400h with 14,000 miles on it. I checked KBB and NADA and it sure valued a lot more, KBB trade-in value was $36,000, Private Party $38,000. I told the sales manager what I found on KBB and NADA and he asked me to come visit in person and get the real estimate. I don't want to come to a dealership yet and afraid that they would pressure me of selling my trade-in for a low price by presenting deals on the new vehicle (LS460). Do you think I should wait for a few more years when the LS460 comes out of the leases or depreciate more? BTW, I was offer an base 2008 LS460, MSRP $65,000 for $49,999 (no Nav package of course). But it was very tempting. I do like my hybrid a lot, the high SUV and 4-wheel drive (well almost all-wheel) really makes my life much better in the MN winter here. But I'm afraid if I don't sell my RX now, it will depreciate big time when the new redesigned 2010 RX comes out. I do believe the current LS will stay here for another 3-5 years.

[RX400h]

Are you certain that the trade-in amount will be subtracted from the LS460 cost when the dealership determines the taxable amount? If so, that could be a substantial savings, depending upon your tax rate. I can understand why the dealership needs to see your RX before giving you a firm trade-in amount. I would recommend that you see them, but only after finding out what the tax details are so you can calculate what trade-in value you would need to get in order for the deal to be worthwhile.

[Jim Clark]

In VA, we have to pay tax on the full purchase price. Check with the DMV in your state on that.

You might take more of a depreciation hit on the LS than the RX. Although they are discounting that 2008 leftover significantly which will help. I don't think the RX redesign will be THAT dramatic. It's hard to improve THAT much on a vehicle that is already so good.

Figure out how much cash you want to lay out to move into the LS and go from there. Was the $50k for the LS a straight purchase with no trade or does it assume you'll trade the RX? According to KBB, the LS price is well below dealer invoice, they obviously want it off the lot quick. So I wouldn't expect them to be too generous on the trade, maybe $35k assuming it's really clean.

Most used 2008 RX400h's on Autotrader are at dealers. Asking prices are $40-45k. CPO cars are usually about $2k more than non-CPO. A couple of private sellers are asking over $40k.

You mentioned the MN winters and the LS is a RWD car.

[raymsixsix]

Here's another idea for you, if you decide on trading your vehicle, go to Carmax first and get them to give you a written appraisal. Here in Tampa, I know for a fact that those guys always pay all the money for a used car, and you can use it as a negotiation tool. If not, then see how much you would actually benefit from selling it yourself after you factor in the taxes etc. Good luck

[ilovelexus2007]

Thanks everyone for the advices, I will bring my vehicle to the dealer for a more accurate estimate. What do you think it's an acceptable amount in comparing to the KBB's estimate, +- $2-3K?

I've heard of carmax, but never use them. The closest store from where I live is about 300 miles away, so I don't think I will use that.

As far as the LS460 way below KBB invoice, I was surprised that they would go that low too. But since it's a brand new car and it's from a Lexus dealer, I'm confident that it is not a salvage or flood damage vehicle. And yes, 2008 LS is a rear wheel, but I've seen many driven in the snow and ice in the past weeks, so I guess it's alright because of the new technology and better traction control on these newer luxury vehicles. My colleague driven a BMW 5-Series i, and he said it is not that bad. The traction was great. I've only seen Mustang and Eclipse spinning, but not yet BMW or Lexus rear drive, so I'm hopeful. :-)

[BillyShaft]

Hey everyone,

I'm planning to trade-in my RX400h for the LS460, I did it through the Lexus website, and their estimate Black Book gave me approximately around $36,000 - $40,000. I believe I can sell it for a lot higher price on my own.

I was wondering if anyone has any experience with negociating for trade-ins, I mean how much do you think I could negociate up to based on that estimate (amount and percentage?). I do see there is a benefit of not paying taxes with trade-in, does it worth it to sell on my own? Any tips would be greatly appreciated. Thanks.

When we were selling our 2003 RX300 AWD with Nav, the Lex dealer offered us 12k. That was the same price that the link on Lexus.com gave us.

We ended up selling to private party for $15,200. It took 4 days for the car to sell posted locally.

Trading in at the dealer will get you the least amount of money, and the dealer will shell-game the numbers to make you happy. For instance, they would give us 16k for the car, but they were going to raise the price of the 2007 we were looking at by...you guessed it...$4,000.

[Jim Clark]

Here's another idea for you, if you decide on trading your vehicle, go to Carmax first and get them to give you a written appraisal. Here in Tampa, I know for a fact that those guys always pay all the money for a used car, and you can use it as a negotiation tool. If not, then see how much you would actually benefit from selling it yourself after you factor in the taxes etc. Good luck

HUH?

That is not the Carmax business model, at least not the one near us. I took our 2001 Audi S6 to them for an estimate. The car was nearly perfect and had very reasonable miles. They offered me $9k below what Lexus dealer gave me as a trade-in. The Lexus dealer used car guy called some of his friends at Audi dealerships in Colorado and he got me a reasonable offer. The S6 is a rare car but they're reasonably well known and appreciated in CO.

Carmax often has some of the best prices on good used cars. The reason? Because they paid so little for them.

[BillyShaft]

HUH?

That is not the Carmax business model, at least not the one near us. I took our 2001 Audi S6 to them for an estimate. The car was nearly perfect and had very reasonable miles. They offered me $9k below what Lexus dealer gave me as a trade-in. The Lexus dealer used car guy called some of his friends at Audi dealerships in Colorado and he got me a reasonable offer. The S6 is a rare car but they're reasonably well known and appreciated in CO.

Carmax often has some of the best prices on good used cars. The reason? Because they paid so little for them.

I think that Carmax has changed its model over the years. I have heard of Carmax giving almost private party money for cars, and then I have heard of them doing like you say and low-balling like crazy.

[raymsixsix]

Here's another idea for you, if you decide on trading your vehicle, go to Carmax first and get them to give you a written appraisal. Here in Tampa, I know for a fact that those guys always pay all the money for a used car, and you can use it as a negotiation tool. If not, then see how much you would actually benefit from selling it yourself after you factor in the taxes etc. Good luck

HUH?

That is not the Carmax business model, at least not the one near us. I took our 2001 Audi S6 to them for an estimate. The car was nearly perfect and had very reasonable miles. They offered me $9k below what Lexus dealer gave me as a trade-in. The Lexus dealer used car guy called some of his friends at Audi dealerships in Colorado and he got me a reasonable offer. The S6 is a rare car but they're reasonably well known and appreciated in CO.

Carmax often has some of the best prices on good used cars. The reason? Because they paid so little for them.

Here in Tampa at the auctions, when the Carmax guys side up to bid on a car the other dealers just walk away because they know the carmax guys would always dump the most money in to a car. I worked with a couple of people that used to work for them as sales people and said they couldn't stay there because they got paid jacksquat on sales.

[RX400h]

Carmax often has some of the best prices on good used cars. The reason? Because they paid so little for them.

Here in Tampa at the auctions, when the Carmax guys side up to bid on a car the other dealers just walk away because they know the carmax guys would always dump the most money in to a car. I worked with a couple of people that used to work for them as sales people and said they couldn't stay there because they got paid jacksquat on sales.

Honestly, I find it hard to believe that anyone here in CA would find Carmax's prices "low" by any stretch of the imagination. I see much better prices in the autotrader (private party) and Craig's list.

Dave

[jrober]

Here was your post from March 2008

"I just got my 2008 RX400h for $49,000, 2K off the MSRP of $51,205. "

Here is the best trade-in negotiation tip of all. Don't buy a new car and then trade it in 9 months later and expect not to take a serious beating. Amazing.

[ilovelexus2007]

Here was your post from March 2008

"I just got my 2008 RX400h for $49,000, 2K off the MSRP of $51,205. "

Here is the best trade-in negotiation tip of all. Don't buy a new car and then trade it in 9 months later and expect not to take a serious beating. Amazing.

jrober,

Did you see anywhere on this post that I'm complaining about getting hit with a serious depreciation? I didn't think so! My post was intended to get as much advice as possible of how to get the most out of my trade-in, nothing more. If you can contribute, I appreciate it, but please don't come here to lecture with your negative attitude like that.

Now, if I bought this car "9 months ago" (correction: I got it for 14 months) and sell it today in one of the toughest seller's market because I couldn't afford the payment or don't want the car anymore, then I will take a big hit. But I am also buying a new car in this buyer's market, so I figure there will be a wash in term of the depreciation on my 400h because there are so many good deals right now...if not...outrageous deals on new models.

Thanks the others for your great advice!

[Jim Clark]

HUH?

That is not the Carmax business model, at least not the one near us. I took our 2001 Audi S6 to them for an estimate. The car was nearly perfect and had very reasonable miles. They offered me $9k below what Lexus dealer gave me as a trade-in. The Lexus dealer used car guy called some of his friends at Audi dealerships in Colorado and he got me a reasonable offer. The S6 is a rare car but they're reasonably well known and appreciated in CO.

Carmax often has some of the best prices on good used cars. The reason? Because they paid so little for them.

I think that Carmax has changed its model over the years. I have heard of Carmax giving almost private party money for cars, and then I have heard of them doing like you say and low-balling like crazy.

The guy who gave me the super low-ball quote said it was a car they wouldn't sell off their lot, they would send it to auction. Again, this was a near perfect 2001 Audi S6 Avant with very reasonable miles. Carmax offered me $12.5k (original sticker in 2001 was $64k). The dealer from CO offered $21k and they would have to pay for shipping from VA.

When we were looking at 400h's, I originally looked at used ones, Carmax had a nice one on their lot for a much better price than the local Lexus dealers were asking.

I think the problem with the S6 was that almost nobody knows what they are (except Audi enthusiasts). But the CO Audi dealer who bought it knew what it was and wanted it for a reasonable price. They are basically a 340hp race car disguised as a soccer-mom transport.

[firewire]

Keep us informed! I would hope you could get $35-$37K at Lexus in trade and $38-$40K selling on your own. A dealer other than Lexus I would expect probably $31-33K :( . I also have an '08 400h, (but 2wd) and premium pkg and love the car, but not the payment (starting to think it is more car than I need), so I am curious as to what you get for yours.

By the way, my local dealer has this GS 450h Hybrid that may or may not interest you:

http://www.eskridgelexus.com/VehicleDetails/329722663

[ilovelexus2007]

Keep us informed! I would hope you could get $35-$37K at Lexus in trade and $38-$40K selling on your own. A dealer other than Lexus I would expect probably $31-33K :( . I also have an '08 400h, (but 2wd) and premium pkg and love the car, but not the payment (starting to think it is more car than I need), so I am curious as to what you get for yours.

By the way, my local dealer has this GS 450h Hybrid that may or may not interest you:

http://www.eskridgelexus.com/VehicleDetails/329722663

Per your request, here is the update:

Long story short, I've decided to keep my '08 RX400h for another year or two and sell it dirt cheap to my in-law (I think they wanted this vehicle but their nest egg got beaten badly so they hold off on purchasing a new car).

Here is the story: I went to the dealer to get the appraisal, and they offered me $35,500 with 15K on it. I knew dealer trade-ins are usually a rip off, but this is about $2K below the trade-in value given by KBB. I walked away and checked out on auto-trader, unfortunately in my area only 2006 RX400h were sold, not a single '08 was sold by individual seller. So I call them back and ask for a trade-in of $38,500 (average between KBB trade in of $37,300 and private party of $39,500). They agreed to give me a price of $37.700 (which I think it's reasonable consider they have another '08 RX400h in stock with 9,000 miles on it and put it up for $40,900). A week later I came back for a test drive of the LS, and they retracted the offer, staying that Lexus is currently giving more cash incentive rebates for '08 models, and they reduced the offer to $35,650. After endless conversations, I walked away embracing my 400h knowing that I will have her for another year or two and not have to take a $10K hit on depreciation.

By the way, anyone knows anybody or have they recently purchased a new or used 400h? How much did you pay for? I saw on the RX350 board, and some of them got deals as great as $36,000 for '09 RX350 with Nav. I guess the currently RX models got hit pretty hard knowing that the redesigned will coming out in a month. I didn't see this steep drop in the LS or the ES line up. Just the RX.

[SW03ES]

What you're experiencing is that as hard hit as the new car market is, the used high end market is worse. People are not buying luxury cars, and they aren't buying used luxury cars either. If the dealer has a car on their lot for $40k that is similar to yours, I think $35.5k is a very reasonable price. What do you think they will sell that $40k RX for? $36k? Maybe.

If they let you walk away they couldn't do the deal.

[ilovelexus2007]

What you're experiencing is that as hard hit as the new car market is, the used high end market is worse. People are not buying luxury cars, and they aren't buying used luxury cars either. If the dealer has a car on their lot for $40k that is similar to yours, I think $35.5k is a very reasonable price. What do you think they will sell that $40k RX for? $36k? Maybe.

If they let you walk away they couldn't do the deal.

You're right, their '08 400h with 9K will probably sell between $36-37K...about $4-5K off asking price. But the reason why I got such an "ok" deal because I'm planning to buy an LS, so they probably thought they would get something back for the LS from me.

Btw, I see that they still have ocean of RX350s on their lot, wonder why on the RX350 board, people get outrageous deals: 09' Pebble Peach with Nav for $35.5K. WOW

[RX400h]

The $4.00+/gallon gas prices are still fresh in most people's minds and few are foolish enough to think that $2.00/gallon prices are here to stay. That being the case, I am not surprised that RX350s, with their 16-18 average MPG are selling at tremendous discounts.

[ilovelexus2007]

The $4.00+/gallon gas prices are still fresh in most people's minds and few are foolish enough to think that $2.00/gallon prices are here to stay. That being the case, I am not surprised that RX350s, with their 16-18 average MPG are selling at tremendous discounts.

I agree, the market has yet to go back up, oil demand drops, inventory increases, cruel is still at $42 a barrel, and gasoline had already creep up in the last few weeks in anticipate of the spring, unbelievable! I don't think we will see $4 (average) in 2009 *knock on woods*, but $3 is a definite and $4 again in 2010. Still, I'm so glad that all of us 400h owner having the distinction of owning a hybrid rarity. I always get a kick when I park my car next to a 350 and the owner got off his car and start staring at my car wondering what the 400h means (sorry, but a lot of people are not aware of hybrids, heck...some of them I know were just buying a base 350 just to say they owning a Lexus)

[Jim Clark]

Keep us informed! I would hope you could get $35-$37K at Lexus in trade and $38-$40K selling on your own. A dealer other than Lexus I would expect probably $31-33K :( . I also have an '08 400h, (but 2wd) and premium pkg and love the car, but not the payment (starting to think it is more car than I need), so I am curious as to what you get for yours.

By the way, my local dealer has this GS 450h Hybrid that may or may not interest you:

http://www.eskridgelexus.com/VehicleDetails/329722663

Per your request, here is the update:

Long story short, I've decided to keep my '08 RX400h for another year or two and sell it dirt cheap to my in-law (I think they wanted this vehicle but their nest egg got beaten badly so they hold off on purchasing a new car).

Here is the story: I went to the dealer to get the appraisal, and they offered me $35,500 with 15K on it. I knew dealer trade-ins are usually a rip off, but this is about $2K below the trade-in value given by KBB. I walked away and checked out on auto-trader, unfortunately in my area only 2006 RX400h were sold, not a single '08 was sold by individual seller. So I call them back and ask for a trade-in of $38,500 (average between KBB trade in of $37,300 and private party of $39,500). They agreed to give me a price of $37.700 (which I think it's reasonable consider they have another '08 RX400h in stock with 9,000 miles on it and put it up for $40,900). A week later I came back for a test drive of the LS, and they retracted the offer, staying that Lexus is currently giving more cash incentive rebates for '08 models, and they reduced the offer to $35,650. After endless conversations, I walked away embracing my 400h knowing that I will have her for another year or two and not have to take a $10K hit on depreciation.

By the way, anyone knows anybody or have they recently purchased a new or used 400h? How much did you pay for? I saw on the RX350 board, and some of them got deals as great as $36,000 for '09 RX350 with Nav. I guess the currently RX models got hit pretty hard knowing that the redesigned will coming out in a month. I didn't see this steep drop in the LS or the ES line up. Just the RX.

IIRC, the dealer was offering you a huge discount on the new LS, well below dealer invoice. And you want them to also give you top dollar for the RX? No wonder they let you walk. I doubt they were making any money on the LS, they just wanted it off the lot. They have to make some profit somewhere if they want to stay in business. Their profit on the repair/maintenance shop is probably well below most other manufacturers, Toyotas/Lexuses typically only require routine maintenance, they just don't break as much as German and American cars.

Enjoy the 400h for a while and then sell it to your in-laws for a fair price, it's a great vehicle. It will take a little hit in value when the 2010 450h comes out but I don't think it will be that big, the 450h is only marginally better than the 400h. We plan to keep our 2008 400h for a long time.