Trade in Process?
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Joined: Feb 2005
Posts: 65
From: SF | Martinez | San Jose
Trade in Process?
Ok, So I did a quick search with "Trading in tC's" but have had no luck. I currently own a 2005 tC and I want to trade it for the RS3.0 really badly. Someone said in another post that its not a hard process as long as the sales person is easy to work with or something along those lines....
Basically my dad is helping me out with the current tC I own, everything is in his name (this was when I was young, 18 and no credit), and basically I wanted to do a trade but since things are in his name, it makes sense he should be there when I trade. We are currently financing thru TFS and I am just curious about this whole process and how it works?? I mean I hear some lose money doing a trade and some say you don't....I just basically want to start building on top of my current credit because credit card "credit" and Car Buying "credit" I was told is good to have on your credit report/history. I hope that makes sense and I hope i can get some help on this stuff. Any info or tips on trade-in help too. Thanks!
Basically my dad is helping me out with the current tC I own, everything is in his name (this was when I was young, 18 and no credit), and basically I wanted to do a trade but since things are in his name, it makes sense he should be there when I trade. We are currently financing thru TFS and I am just curious about this whole process and how it works?? I mean I hear some lose money doing a trade and some say you don't....I just basically want to start building on top of my current credit because credit card "credit" and Car Buying "credit" I was told is good to have on your credit report/history. I hope that makes sense and I hope i can get some help on this stuff. Any info or tips on trade-in help too. Thanks!
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Team ScioNRG
Joined: Sep 2006
Posts: 949
Yeah their trade in offer will be pretty firm I'm sure, but it's not a hard process at all. You will need your dad there since it's not technically yours. Take off all the A/M stuff as it won't increase the trade in value, but if you have an intake, go ahead and sell it since it doesn't work on 07+.
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SL Member
Joined: Mar 2006
Posts: 180
From: Orlando, Florida
i had the same problem.. but im trading in my xb.. i purchased the xb under my dad's name..and i think when i buy my tc next week..i'll keep it under my dad's name since his credit is lower and i'll keep those low monthly payments.. but the process isnt hard.. they just total up the new car with your down payment and trade in... then take that total plus what u owe on the new car and thats what u pay.. well atleast that is how i was told.. well good luck to you on getting your rs.3.. i cant wait for my nautica blue!!
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Joined: Mar 2007
Posts: 9
Lose money versus make money: this all depends on a) how much you owe on the car and b) how much they offer. In general, you'll always "lose" money, as no dealer in his right mind is going to give you more for the car than you could get in a private party sale. Dealers often advertise that they'll "pay off your car no matter how much you owe" but in reality they just roll all that negative equity (you owe more than the car is worth) into your new loan, giving you a BUNCH MORE negative equity.
Financing: you are really selling yourself short by financing thru Toyota, and probably even one of the dealerships other banks. I get 4.4% thru my credit union; if you aren't a member of one, nows the time to join! Anyone old enough to drive/own a car should have the financing in their name. It's an excellent way to build credit and, assuming you pay on time and all that, will save you thousands of dollars in interest rates down the road when you're buying more cars, a house, etc.
Trade-in Process: the dealer gives you a value for your car. That number is deducted from the amount you pay for the new Scion. Usually, dealers will try to screw you one of two ways, a) give you a low value on the trade-in or b) give you an okay value on the trade-in but a high price on the new purchase. Or they'll use the trade-in value to try and persuade you to add on worthless extras such as undercoating, "protective finishes", extended warranties, etc. Since you're buying at Scion's "no haggle price" I would expect to get a fairly low offer on the trade-in. That's conjecture though. Whatever they offer, remember that is is a negotiation; a smart person will go to the dealership armed with Blue Book, Edmunds, values, etc. An even smarter person will also take the car to CarMax for a free estimate (they buy cars too.) You never know, they may offer you more than the dealer.
There is a tax advantage to trading at the time of sale though so keep in mind that you only pay tax on the balance of the new vehicle. Example:
20,000 for new car
-14,0000 for old car
=6,000 you pay tax on!
At least, that's how it works in every state I've lived in. If your state's vehicle sales tax is high that might make a big difference.
Your current loan: don't worry about the old loan; your dad will sign a power of attorney that lets the dealership take care of all the paperwork regarding the old loan. You'll literally leave the car with them and be done with it. Again, if the trade-in offer is less than what you owe on the car, you'll have to make up the difference, either by cutting them a check for the difference or letting them roll over the negative equity into your new loan. Negative equity is a bad thing with cars considering how quickly and unpredictably they depreciate.
Financing: you are really selling yourself short by financing thru Toyota, and probably even one of the dealerships other banks. I get 4.4% thru my credit union; if you aren't a member of one, nows the time to join! Anyone old enough to drive/own a car should have the financing in their name. It's an excellent way to build credit and, assuming you pay on time and all that, will save you thousands of dollars in interest rates down the road when you're buying more cars, a house, etc.
Trade-in Process: the dealer gives you a value for your car. That number is deducted from the amount you pay for the new Scion. Usually, dealers will try to screw you one of two ways, a) give you a low value on the trade-in or b) give you an okay value on the trade-in but a high price on the new purchase. Or they'll use the trade-in value to try and persuade you to add on worthless extras such as undercoating, "protective finishes", extended warranties, etc. Since you're buying at Scion's "no haggle price" I would expect to get a fairly low offer on the trade-in. That's conjecture though. Whatever they offer, remember that is is a negotiation; a smart person will go to the dealership armed with Blue Book, Edmunds, values, etc. An even smarter person will also take the car to CarMax for a free estimate (they buy cars too.) You never know, they may offer you more than the dealer.
There is a tax advantage to trading at the time of sale though so keep in mind that you only pay tax on the balance of the new vehicle. Example:
20,000 for new car
-14,0000 for old car
=6,000 you pay tax on!
At least, that's how it works in every state I've lived in. If your state's vehicle sales tax is high that might make a big difference.
Your current loan: don't worry about the old loan; your dad will sign a power of attorney that lets the dealership take care of all the paperwork regarding the old loan. You'll literally leave the car with them and be done with it. Again, if the trade-in offer is less than what you owe on the car, you'll have to make up the difference, either by cutting them a check for the difference or letting them roll over the negative equity into your new loan. Negative equity is a bad thing with cars considering how quickly and unpredictably they depreciate.
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