When is the best time to trade a recent car or truck for a new one?

[Nik Habicht]

Has anyone here worked in auto sales at a dealership? Basically my question is this:

Currently a steady car payment and no auto repair bills allow me to funnel more money into retirement, than if I didn't have a car payment (I'd be saving it for next down payment, so paying it anyway) and had to deal with repair bills.

So given that -- when is the best time to trade a vehicle in? 2 years? 5? Less than xx miles? And yes -- I might be able to sell privately for more money, but I'm not sure that's in the cards.

I'm curious what dealerships value....

[Lifeislarge]

Dealers value vehicles with less than average mileage and less than three years old. Easier to certify for their used car program and easier to sell. Don't kid yourself that they'll pay much of a premium on the trade for these cherries, just more profit for them. To get a rough idea go on Edmunds and look up your vehicles trade value at two years and at three years with average miles to see the difference. If you don't drive more than 12k miles a year, want a warranty, easy maintenance, and a low payment consider leasing. Make sure you lease a car with a high residual value.

22 years in the auto industry and former Acura sales.

[EEH]

With today's cars,,they tend to run longer with less trouble than they did before..

I bought a Chrysler Pacifica in 2007 it has 165,000 miles on it,other than tires brakes I have spent about $500.00 on it.

Now it's worth about three thousand to a dealer on a $35,000 trade in which is nothing..

I tend to drive them until they are at least ten years old,my 2013 ford is on it's way only seven more years..

Have never been able to figure out the question you ask so I just drive until it a really used car.

I also own one that's almost 30 years old numbers matching and its a dream to drive.

[GrumpyOne]

Nik, if you are talking about the Tundra, those are always in demand...and they rarely break down. My boss had on that was 4 years old, that he wrecked...bent the frame...they replaced the frame rather than total it...when he wrecked it the second time, they did total it...2x4 Tundra crew cab with almost 200k miles...he got $16k for it, I think it was almost 5 years old.

Keep the Tundra.

[RangerTrace]

Nik, if you are talking about the Tundra, those are always in demand...and they rarely break down. My boss had on that was 4 years old, that he wrecked...bent the frame...they replaced the frame rather than total it...when he wrecked it the second time, they did total it...2x4 Tundra crew cab with almost 200k miles...he got $16k for it, I think it was almost 5 years old.

Keep the Tundra.

I agree, keep the Tundra. That will be my next purchase when the lease is up on the X4.

[sfinney]

New cars take the biggest hit on depreciation in the first 2 years.... still hold reasonable values from 3 to 5 years.

Over 100K miles is a mental penalty on the price despite how nice it is, trade before 100K if possible. Otherwise drive it til the wheels fall off. If its a high demand vehicle in great shape, consider selling it yourself for max value.

I have been in a lease cycle for several vehicles now, $0 down, fixed payment, and my vehicle is always in warranty (unless you keep 5 years plus, and actually pay it off, you don't really "own" a vehicle anyway).

[Tom S.]

Since a fair portion of my retirement depends on people buying cars, I shouldn't post this, but here it is:

Buy used and drive it until the wheels fall off, or it becomes too expensive to justify fixing it. Getting a one or two year old used car will save you considerable money over buying new. If you must buy new, look for last year's models still on dealer's lots. Companies generally don't give dealers cars and wait until they sell them to get their money. Dealers finance them up front through the company and pay a monthly payment. That's why you can often save a few bucks by going in towards the end of the the month when the dealer would like to get out of making next month's payment on the car. Still, you are better off buying a low mileage used car that is a year or two old and let the original owner take the depreciation hit. Many credit unions offer used car financing at the same rate as new cars. Even if the dealer is offering 0% financing, you'll be financing at a low interest rate on a car that costs considerably less than the new car and the interest you do pay will still amount to less than the cost of the new car. When the car gets old, consider the cost of up keep vs the cost of another payment. Even for major repairs, it's cheaper to have them done than it is to make 6 months or a years worth of payments on a new car, so if you replace the transmission at $1500 and drive the car for another 2 years before something else major happens, you are still money ahead. If you can do the simple stuff yourself, it's even better. For example, brakes are so easy I can't understand why anyone pays to have them done. Last of all, the older a car is, the less it is worth and the cheaper the insurance is.

[Edge40]

Hmm. I have an 08 tacoma with 95k on it. Its been paid off for a few years now and I have only sunk 3k at the most into it since I paid it off. Most of that was expected stuff, tires, brakes etc. I really want a new truck and I know that it prob makes sense to keep it and reading this is just driving that idea home. My only concern is that I travel. Not far but several 300 mile or so trips a year. Enough that I don't want to have to worry about my truck breaking down. Should I keep it or trade it in or sell it while it still has some value? What do you all think?

[Sarge]

Since a fair portion of my retirement depends on people buying cars, I shouldn't post this, but here it is:

Buy used and drive it until the wheels fall off, or it becomes too expensive to justify fixing it. Getting a one or two year old used car will save you considerable money over buying new. If you must buy new, look for last year's models still on dealer's lots. Companies generally don't give dealers cars and wait until they sell them to get their money. Dealers finance them up front through the company and pay a monthly payment. That's why you can often save a few bucks by going in towards the end of the the month when the dealer would like to get out of making next month's payment on the car. Still, you are better off buying a low mileage used car that is a year or two old and let the original owner take the depreciation hit. Many credit unions offer used car financing at the same rate as new cars. Even if the dealer is offering 0% financing, you'll be financing at a low interest rate on a car that costs considerably less than the new car and the interest you do pay will still amount to less than the cost of the new car. When the car gets old, consider the cost of up keep vs the cost of another payment. Even for major repairs, it's cheaper to have them done than it is to make 6 months or a years worth of payments on a new car, so if you replace the transmission at $1500 and drive the car for another 2 years before something else major happens, you are still money ahead. If you can do the simple stuff yourself, it's even better. For example, brakes are so easy I can't understand why anyone pays to have them done. Last of all, the older a car is, the less it is worth and the cheaper the insurance is.

You must be talking domestic? I'm a Toyota guy and we will probably get a RAV4 this year. So far we have found 1-2 yo models with 25k miles already on them to be only $1000-$2000 cheaper than a brand new unit. That's just dumb. Plus free financing on new ones.

I don't mind some DIY stuff but brakes are not really what I'd call easy. Especially when some 4wd trucks call for removing the hub to change a rotor. No thanks! Pull it in and drive it out a few hours later with new breaks. Worth every penny. But the logic of driving them a long time is sound. After they are paid off I at least drive them 10 more years.

[Sarge]

Hmm. I have an 08 tacoma with 95k on it. Its been paid off for a few years now and I have only sunk 3k at the most into it since I paid it off. Most of that was expected stuff, tires, brakes etc. I really want a new truck and I know that it prob makes sense to keep it and reading this is just driving that idea home. My only concern is that I travel. Not far but several 300 mile or so trips a year. Enough that I don't want to have to worry about my truck breaking down. Should I keep it or trade it in or sell it while it still has some value? What do you all think?

I drive an 05 Taco and it's just such a good truck. I have a shooting buddy who is a Toyota tech, and a good one. It only has about 125k on it and I plan to drive it to matches far and wide for at least another5-7 years

[SCTaylor]

Edge - I have an 07 Taco with 180k miles, been the owner since 130k. Thus far I've got tires, oil, and filters in the old girl. It runs like a top, hard to beat a 5 speed two wheel drive 4 banger for utility and economy!

Toyotas hold their value very very well down here. My truck is still worth north of $10k on the private market.


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Edited June 10, 2016 by SCTaylor

[Edge40]

Thanks looks like I'll hang on to it for a while longer.

[RJH]

I never buy a car with less than 100,000 miles on it, no way in the world I would get trapped into those payments. I bought a Malibu a while back with 125,000 on it, sold it when it had 295,000 on it. No major repairs ever, just lots of tires. 100,000 on a car now is just getting broken it seems, and with payments as high as they are it takes a lot of repairs to justify a new car to me, but to each his own. Good luck

[GrumpyOne]

Hmm. I have an 08 tacoma with 95k on it. Its been paid off for a few years now and I have only sunk 3k at the most into it since I paid it off. Most of that was expected stuff, tires, brakes etc. I really want a new truck and I know that it prob makes sense to keep it and reading this is just driving that idea home. My only concern is that I travel. Not far but several 300 mile or so trips a year. Enough that I don't want to have to worry about my truck breaking down. Should I keep it or trade it in or sell it while it still has some value? What do you all think?

Again, it's a Toyota...they run forever... keep it.

[GrumpyOne]

I never buy a car with less than 100,000 miles on it, no way in the world I would get trapped into those payments. I bought a Malibu a while back with 125,000 on it, sold it when it had 295,000 on it. No major repairs ever, just lots of tires. 100,000 on a car now is just getting broken it seems, and with payments as high as they are it takes a lot of repairs to justify a new car to me, but to each his own. Good luck

100,00 miles in 5 or 10 years is ok...100,000 miles in 2 years is questionable....

[GrumpyOne]

I have a 2010 Tundra XSP double cab 4x4...65k miles (I drive a company van for work)...It's paid for...Dealership wants me to trade it in on a new model...Said they will give me $28k-$32k for it...I am thinking about it...I could get a brand new Tundra, same model as I have, for about $16k...then i would have a 2 year old paid off truck (after 2 years of payments) vs a 6 year old paid off truck..

Nah, I'll keep my 2010....

[RJH]

Grumpy, 100,000 for a 2 year old car is the best. Depreciation will be great , so it will be better deal for the buyer, and to get that many miles on one that quick , It would have to all be highway miles. And the only thing easier on a car than highway miles is setting in a garage. If the maintenance records, oil changes etc were up to date you could get a steal on a car like that, and it would probably be in excellent shape....

[GrumpyOne]

Grumpy, 100,000 for a 2 year old car is the best. Depreciation will be great , so it will be better deal for the buyer, and to get that many miles on one that quick , It would have to all be highway miles. And the only thing easier on a car than highway miles is setting in a garage. If the maintenance records, oil changes etc were up to date you could get a steal on a car like that, and it would probably be in excellent shape....

Miles are miles...100,000 miles in 2 years is still alot of butt time in the seat...and serious run time (read constant) on the engine. I would suspect very few 50,000 mile a year vehicles are taken care of the way they should be taken care of.

At 50,000 a year, that is 22 drive days a month at approximately 190 miles each day...at 60 miles an hour, that is 3 plus hours everyday of driving...assuming the person doing the driving works a normal 8 hour shift, and drives off the clock, They are "at work" for an extra 3 hours per day, and they won't be getting oil changes on the clock...they are getting an oil change better than once a month (if they use the vehicle for more than just there drive to and from work)...Not saying it's not happening, just saying those people are most likely not doing the upkeep on the vehicle as it should be done...mainly because of time...Now, if it is a company vehicle (company paid or provided), I would bet money that they aren't doing the upkeep as required...or even that the company won't pay to do the upkeep properly.

As an example, I drive a company van...Policy dictates that the oil is only changed every 10,000 miles, that new tires and brakes are required only when you have 2 opinions that they need changed, and virtually all other maintenance is non existent...and our policy is good compared to others...a major telecommunications company's policy is oil change every 15,000 miles, and brakes and such only when absolutely necessary...Never mind that the AC or heater no longer works...

[twodownzero]

Dealerships make more money on used cars than new. They value suckers who want new cars.

[Lifeislarge]

http://www.autoblog.com/2016/05/16/toyota-tundra-million-mile-official/

[Intel6]

07 Taco driver here with 128K on the odometer. Bought it new and will keep driving it for a while, second kid entering college.

[TonytheTiger]

Diesel is the way to go. Both my truck and car are approaching the 300k mark and the rust that eats all vehicles in my corner of the world is the only real problem with them. That same inevitable rust is also the reason I will never consider buying a new vehicle, if you have to drive it in the winter it's going to look like butt in a few years anyways.

[RJH]

Highway miles are easier on the engine, cold starts and stop/start driving will wear and engine and drivetrain faster. I mechaniced for a large chunk of my life so this is not just hearsay. Most newer cars if somewhat properly maintained are good for ~300,000 miles on the original powertrain. To the OP, do what you would like, if you want a new car get one, just don't fool yourself into thinking it is going to save you money.

[Sarge]

Actually car shopping now for a small to mid sized SUV. We were looking at Honda and my adorable wife told the guy we want to stay under 30k. I swear he wanted to laugh as loud as I did.

Looks like we can get into a really nice pilot for about 38

Edited June 10, 2016 by Sarge

[SCTaylor]

Don't overlook the CRV's Sarge! They are a great little rig!