car depreciation

tortuga · Posted: Tue Jul 18, 2006 4:33 pm Post subject: car depreciation

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.
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Money$hot! · Star Player Joined: 18 Dec 2002 Posts: 5911

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

tortuga · Posted: Tue Jul 18, 2006 8:26 pm Post subject:

Money$hot! · Star Player Joined: 18 Dec 2002 Posts: 5911

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.

KingKobe20 · Posted: Wed Jul 19, 2006 12:38 am Post subject:

I was always fishy on the Matrix

tortuga · Posted: Thu Jul 20, 2006 1:58 pm Post subject:

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.

Bergamotichek · Retired Number Joined: 02 Sep 2007 Posts: 16777206

Never buy new.

Buy used.

Mike@LG · Posted: Thu Jul 20, 2006 2:25 pm Post subject:

Bergamotichek · Retired Number Joined: 02 Sep 2007 Posts: 16777206

Money$hot! · Star Player Joined: 18 Dec 2002 Posts: 5911

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