Paying off vs trading-in car

[ElFenix]

you lose 20% just driving the car off the lot. KBB thinks trade on a camry LE with typical equipment in exceptional condition is worth 15k - that's a car that gets advertised on autotrader for $22k or 23k new. so your volvo's depreciation may not be out of line with that at all.

 

[NutBucket]

Volvo does have pretty poor depreciation...similar to most European brands.

 

[Midwayman]

So I have a 2015 Volvo S60 that I'm not really digging anymore. I owe around 14k on it and I think it has depreciated to around 20K (trade-in) or so. I bought it for 26k so it's lame that this European car has depreciated so much within 8 months. (I'm used to Hondas and Toyotas which kept their value for much longer.

I'm wondering what I should do if I know that I won't keep the car long-term. I could trade it in so that I can get more for it while it's still worth more, or pay off the car and essentially just wait until the warranty gets close to running out. Not sure if there is even any benefit to paying off the car so I'll have the title in hand before going in for a trade-in. Any ideas on maximizing the $ I could salvage from any transaction?

I think the optimum thing to do it probably hold on to it until just before the warranty is up and then sell. That'll minimize your depreciation per mile and those sort of cars are always way easy to sell still under warranty. No sense in paying it off before trading in. The dealer is used to cutting checks to the right places. Paying it off just means you're taking a lot of money that could probably be earning more interest than your loan cost and tying it up until you sell.

Of course if you just want to be rid of the car, you just want to be rid of the car.

 

[Pacfanweb]

Trade it in. A $20k trade in is worth more than $20k from a private party and then buying a car. Most states don't charge sales tax on the trade-in amount.

NEVER trade. ALWAYS sell it and if there's a difference, pay it off. You will always lose big money on a trade.

It's so easy to sell a car, makes absolutely no sense to lose thousands for a little bit of convenience.

And I don't know of any state that charges sales tax on the trade. Only difference is whether they charge you tax on the full price of the new vehicle, or the price you pay minus the trade.

 

[BurnItDwn]

from the "makes financial sense" to "that is a stupid terrible idea" ranked
1.) Keep the car for another 5-10 years. If you fit in it and it works. then it can still serve its purpose as transportation.
2.) Keep the car until you at least pay off the loan, sell it private party as you will get disemboweled with trade in
3.) Other

 

[dainthomas]

Once you break the cardinal rule of not letting your wife make car decisions you're screwed.

My truck is paid off this month and the only thing that will make me get a new one are if it completely falls apart or gets totaled. Car payments suck.

 

[Ketchup]

While keeping a car you don't like could make more financial sense, you have to ask yourself if it's worth the emotional pain? You already don't like it, how's it going to feel when you have to put money into it (or just leaving it at the dealer) for services needed?

Cars depreciate. All of them. Yeah, some more than others, and at different times, but cars aren't an investment. And if you can afford to put a couple grand into getting into something you like, especially if its something your in every day, it might just be worth it for your overall well-being.

And as others have stated, don't just assume you are going to get screwed trading it in. Know what the car is going for (not just what one site says it's valued at). You can use that when haggling with a dealership. And the tax savings may be more noticeable than you would think.

 

[Subyman]

from the "makes financial sense" to "that is a stupid terrible idea" ranked
1.) Keep the car for another 5-10 years. If you fit in it and it works. then it can still serve its purpose as transportation.
2.) Keep the car until you at least pay off the loan, sell it private party as you will get disemboweled with trade in
3.) Other

All those depend on the situation and the individual's numbers. There is no hard line correct answer here. Trade in isn't always about getting screwed. Some states do not tax the trade in value when applied to a car purchase. This a lot of times narrows the gap between the trade in value and the private party value. For a lot of people the time saved is well worth the price difference.

 

[BurnItDwn]

All those depend on the situation and the individual's numbers. There is no hard line correct answer here. Trade in isn't always about getting screwed. Some states do not tax the trade in value when applied to a car purchase. This a lot of times narrows the gap between the trade in value and the private party value. For a lot of people the time saved is well worth the price difference.

He is talking about a 2015 volvo.
Euro car
High depreciation
almost new

I think that that kind of car especially trade in will screw you.

 

[xSkyDrAx]

I'm amazed at how a 30k+ car is down to 20k in less than 1 year wtf

 

[jlee]

I'm amazed at how a 30k+ car is down to 20k in less than 1 year wtf

That's trade-in value (and new-car depreciation) for you. You could buy it brand new and then drive a mile down the road to another dealer and get a trade-in offer for thousands less than you just paid.

 

[Ketchup]

I'm amazed at how a 30k+ car is down to 20k in less than 1 year wtf

Really? Have you ever bought a new card before?

 

[xSkyDrAx]

Really? Have you ever bought a new card before?

Yup but I never tried to trade it in in less than 1 year.

I know there's depreciation but that offer sounds crazy (to me) for something less than 1 year old. I'm assuming a used one for less than 1 year will still sell for closer to 30k off a used dealer/private party.

 

[dave_the_nerd]

Yup but I never tried to trade it in in less than 1 year.

I know there's depreciation but that offer sounds crazy (to me) for something less than 1 year old. I'm assuming a used one for less than 1 year will still sell for closer to 30k off a used dealer/private party.

You'd be surprised.

Run some theoretical cars through kbb.com and see what you come up with.

I mean, it's horrifying, and should be crazy, but it is what it is. :'(

 

[michal1980]

check with CarMax for their trade in offer before going to another dealer.

 

[dave_the_nerd]

check with CarMax for their trade in offer before going to another dealer.

This place opened up near here recently:

http://owner2ownerdirect.com/

Seems like some kind of consignment gallery for used cars.

 

[thomsbrain]

If you trade this car for a theoretical different car that will depreciate even faster than this one will going forward, then you are actually losing money by trading now versus waiting longer. While your Volvo has already taken a huge value hit, it will slow down from here on out (the worst is over). If you trade for a brand-new car, you're just going to take that off-the-lot value depreciation hit all over again.

I'm not sure why the lack of physical dipstick is preventing you from changing your own oil. The oil capacity should be in the owner's manual. Put in the specified amount of oil; done.