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tortuga Starting Rotation
Joined: 04 Mar 2002 Posts: 644 Location: LAX
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Posted: Tue Jul 18, 2006 4:33 pm Post subject: car depreciation |
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Hey, guys. I got a question regarding car depreciation.
I'm trying to sell a 2 year old Toyota Matrix that I bought new for 18k. I still have about $6000 until I can pay off. But, my friend is telling me that I'm losing money by doing this. He mentions that cars depreciate like crazy the first 3 years.
I understand the first 3 year thing and I think as a buyer, it'd be wise to buy a car that's 3 years old but does this somehow apply to the seller as well?
I would think that the longer I wait, the more I will lose. I still have to pay off the car no matter when I sell it.
Thanks. _________________ "It's just fo' decoration! That's it and that's all, man; we do it fo' decorations." -Lil Sis |
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Money$hot! Star Player
Joined: 18 Dec 2002 Posts: 5911
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Posted: Tue Jul 18, 2006 7:08 pm Post subject: |
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Follow this link to get a True Market Valuation of your 2004 Matrix. This will tell you what the car is selling for (not just the blue book value) in your area.
http://www.edmunds.com/tmv/used/2004/toyota/matrix/index.html
If it's selling for more than $6k, then consider selling it. If not consider keping it. Understand also that it may cost a few dollars to get it sold (listing fees on car selling websites (although craigslist.org is free), cleaning, etc). Also note that different auto finance companies have different methods to transfer a car title when there is still a balance owed. Call in advance to find out this method as sometimes it can be a minor pain in the arse.
Good Luck |
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tortuga Starting Rotation
Joined: 04 Mar 2002 Posts: 644 Location: LAX
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Posted: Tue Jul 18, 2006 8:26 pm Post subject: |
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Money$hot! wrote: | Follow this link to get a True Market Valuation of your 2004 Matrix. This will tell you what the car is selling for (not just the blue book value) in your area.
http://www.edmunds.com/tmv/used/2004/toyota/matrix/index.html
If it's selling for more than $6k, then consider selling it. If not consider keping it. Understand also that it may cost a few dollars to get it sold (listing fees on car selling websites (although craigslist.org is free), cleaning, etc). Also note that different auto finance companies have different methods to transfer a car title when there is still a balance owed. Call in advance to find out this method as sometimes it can be a minor pain in the arse.
Good Luck |
Thanks for the information.
I appraised my car using their appraiser and it came out to be $13,594. Does this mean it's a go?
Damn but it looks like I still lost $4400. haha I guess the mileage had something to do with that and in fact, that's the only thing that's negative about the car according to the appraiser. _________________ "It's just fo' decoration! That's it and that's all, man; we do it fo' decorations." -Lil Sis |
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Money$hot! Star Player
Joined: 18 Dec 2002 Posts: 5911
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Posted: Tue Jul 18, 2006 8:42 pm Post subject: |
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Cars lose about 25% of their value in the first 2 years. A good reason to look for a car that's about 2 years old to buy and negotiate a good price for it (another good general rule is to skip 1st year new models).
OK, Now look at Autotrader.com and see what a similar car is priced for. Dealerships will ask $3-4k over the True Market Value. Private parties will typically be spot on. If you can make $3-5k over the $6k that you still owe then sell the car.
One last note... NEVER trade in your car. It gives another profit center for a dealership to pwn you. Don't be lazy, sell the car independantly. Dealers will typically do everything they can to get you to trade in your car for up to %50 of its actual value. Trade in = get screwed in nearly every scenario. |
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KingKobe20 Franchise Player
Joined: 14 Jul 2006 Posts: 18738 Location: L.A County, 26 miles away from Staples Center
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Posted: Wed Jul 19, 2006 12:38 am Post subject: |
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I was always fishy on the Matrix |
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tortuga Starting Rotation
Joined: 04 Mar 2002 Posts: 644 Location: LAX
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Posted: Thu Jul 20, 2006 1:58 pm Post subject: |
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Thanks, Money$hot!. I'm gonna have to rethink about this since other things came up. I may not be able to sell it just yet. I really appreciate all the advice. I'll keep those in mind when I do end up selling the car.
KingKobe20Dub wrote: | I was always fishy on the Matrix |
haha. What do you mean by that? _________________ "It's just fo' decoration! That's it and that's all, man; we do it fo' decorations." -Lil Sis |
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Bergamotichek Retired Number
Joined: 02 Sep 2007 Posts: 16777206
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Posted: Thu Jul 20, 2006 2:06 pm Post subject: |
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Never buy new.
Buy used. |
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Mike@LG Moderator
Joined: 10 Apr 2001 Posts: 65135 Location: Orange County, CA
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Posted: Thu Jul 20, 2006 2:25 pm Post subject: |
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JD wrote: | Never buy new.
Buy used. |
What's your experience with used cars? Just curious. _________________ Resident Car Nut.
https://lakersdraft.substack.com/
I am not an economic advisor nor do I advise economic strategies or plans. |
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Bergamotichek Retired Number
Joined: 02 Sep 2007 Posts: 16777206
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Posted: Thu Jul 20, 2006 3:58 pm Post subject: |
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Mike@LG wrote: | JD wrote: | Never buy new.
Buy used. |
What's your experience with used cars? Just curious. |
I haven't bought a new car, in probably 16-17 years... and that was the only new one I ever bought. It was probably the worst car out of the bunch, because I had to put aside things I did want (such as the so-called "luxury" items), so I could get a new car.
Every used car I've ever bought... I've kept it, until I wanted something else. I always seem to kind of luck into used cars also, by either finding exactly what I want (year and options)... or I find a hell of a price.
I'm listening to a guy now, named John Cummuta. I downloaded his Debt Into Wealth CDs after hearing some really good things about it. One of the things he talks about, is never buy a new car, as you take a HUGE loss, just driving it off the lot. You can buy a 2-3 year old car (I've often gone older, if I'm looking for something specific) that's already had all its warranty issues taken care of and is still new enough to have relatively low miles on it. Nowadays with cars capable of putting hundreds of thousands of miles on them... You're gonna have that car for a while and its probably a better car than that new one.
Most people buy their cars, because they think it makes them better looking, more likeable or they want to impress/give the impression they're more successful than they really are. But, really... what is a car for? Its to get you from point A to point B. Yeah... I want to do it comfortably and reliably... but after that... what else, do you really need?
P.S. I really suggest Cummuta's CD series. Its NOT a get rich quick scheme, putting ads in newspapers, stuffing envelopes, or some real estate scheme. The guy lays it out for you, on how to get yourself out of debt and build whatever lifestyle you wish for... on the income you currently have. Even my typically skeptical wife, has been absolutely transformed in her money ways, after listening to this guy. |
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Money$hot! Star Player
Joined: 18 Dec 2002 Posts: 5911
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Posted: Thu Jul 20, 2006 5:47 pm Post subject: |
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tortuga wrote: | Thanks, Money$hot!. I'm gonna have to rethink about this since other things came up. I may not be able to sell it just yet. I really appreciate all the advice. I'll keep those in mind when I do end up selling the car. |
No problem mang, best of luck in whatever decision you make. |
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LaLakers999 Star Player
Joined: 10 May 2006 Posts: 1103
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Posted: Thu Jul 20, 2006 6:18 pm Post subject: |
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JD wrote: | Never buy new.
Buy used. |
Correct... new cars are such a waste of money... however cars in general are a waste of money
i bought my 03 bimmer 525i with only 16 thousand miles on it in 04 for 27 Grand!!! it still kept the original warranty
I have pics if anyone cares? |
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