Strong Trade-In Value
#1
Strong Trade-In Value
Well the time behind the wheel of my 2014 XLT was quite short-lived. I purchased in May and traded it in this last weekend for a luxury sedan.
Over the past 10 years I've now owned 40 vehicles, and I only tend to keep them for 3-4 months. I drive about 40k miles per years so I've worked out a system where I am able to essentially drive 8-12k miles for free on each car.
The system is quite easy:
1) By a car that is popular
2) By a car at the right price and one that is usually heavily discounted, typically used, although the F150 always seems to be a "flipable" vehicle due to heavy discounts
3) Have no emotional attachment and realize it is just a car
4) Sell before the depreciation can hit
So the numbers on this one came out quite well. I bought a $41,165 stickered truck new in May for $29,100, put roughly 9,000 miles on it, and sold/traded to the dealer for $28,800. The dealer I sold/traded to offers to buy or trade for the same price, so the trade-in did not matter to my buy price on the other vehicle whatsoever.
Technically I "lost" $300 on the deal, plus the state registration fee and license (about $100 here in TX), but in reality I consider it a successful flip. After all, 90% of those miles were reimbursed tax free through work at 56 cents per mile.
The truck was great. One of the quietest cars I've owned and with the 3.5 Eco I averaged 20.0 MPG over those 9k miles, and I also have a lot of idling in parking lots with the AC blasting between meetings. I made a few easy mods, Substage Sub, Bestop Tri-Fold Tonneau, and spray-in liner (the sub and tonneau can be found in the classifieds for a pretty good deal...).
I'm sure I will be back within the next couple years and I'm intrigued to see what the 2015's look like when they start popping up on the roads. As far as "flipability", I'm guessing it will be 2-3 years before the discounts are heavy enough to make them a strong contender.
So what did I replace it with? Well, about as far on the other end of the spectrum as possible. I purchased a 2 year-old Mercedes E350. I may have to borrow one of your trucks next time I need to hall a couple sheets of plywood!
Enjoy those trucks and keep 'em clean!
Over the past 10 years I've now owned 40 vehicles, and I only tend to keep them for 3-4 months. I drive about 40k miles per years so I've worked out a system where I am able to essentially drive 8-12k miles for free on each car.
The system is quite easy:
1) By a car that is popular
2) By a car at the right price and one that is usually heavily discounted, typically used, although the F150 always seems to be a "flipable" vehicle due to heavy discounts
3) Have no emotional attachment and realize it is just a car
4) Sell before the depreciation can hit
So the numbers on this one came out quite well. I bought a $41,165 stickered truck new in May for $29,100, put roughly 9,000 miles on it, and sold/traded to the dealer for $28,800. The dealer I sold/traded to offers to buy or trade for the same price, so the trade-in did not matter to my buy price on the other vehicle whatsoever.
Technically I "lost" $300 on the deal, plus the state registration fee and license (about $100 here in TX), but in reality I consider it a successful flip. After all, 90% of those miles were reimbursed tax free through work at 56 cents per mile.
The truck was great. One of the quietest cars I've owned and with the 3.5 Eco I averaged 20.0 MPG over those 9k miles, and I also have a lot of idling in parking lots with the AC blasting between meetings. I made a few easy mods, Substage Sub, Bestop Tri-Fold Tonneau, and spray-in liner (the sub and tonneau can be found in the classifieds for a pretty good deal...).
I'm sure I will be back within the next couple years and I'm intrigued to see what the 2015's look like when they start popping up on the roads. As far as "flipability", I'm guessing it will be 2-3 years before the discounts are heavy enough to make them a strong contender.
So what did I replace it with? Well, about as far on the other end of the spectrum as possible. I purchased a 2 year-old Mercedes E350. I may have to borrow one of your trucks next time I need to hall a couple sheets of plywood!
Enjoy those trucks and keep 'em clean!
#5
Coked monkey
#6
The F150 is a bit out of the norm for my strategy as it isn't real practical for a 3-state territory in outside sales, but the strong resale numbers allow it to work. A more typical example would be a 2-4 year old BMW, Mercedes, Jaguar, etc. My typical flips are cars that sold for $40-$60k new, but have now been traded in and are sitting on the wrong lot.
For example, in 2009 I picked up a 2006 Jaguar XJR (an $80k MSRP car) for $17,995 with 42k miles. It was on a Volkswagen lot. The car was also Jaguar Select Edition, which means it had the warranty extended to 6yr 100k miles, huge selling point. Needless to say I came out well on that flip. Drove for 6k miles and then traded it in for $23k on a 2010 Ford Escape for my wife. what made this work? How many people coming in to look at a $17k VW Jetta are going to buy a Jag?
For any of you that like luxury cars, BMW, Jaguar, and LandRover are unique in the fact that if they have been previously certified the warranty transfers automatically to all subsequent owners while within 6yr 100k miles. In other words, the warranty follow the VIN, not the owner 90% of dealers I come across don't know this, and/or don't believe it. This makes a 3-4 year old previously certified BMW/Jag/LR sitting on a Hyundai lot the true "diamond in the rough".
Last edited by LantanaTXF150; 09-22-2014 at 07:52 PM.
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#8
So...if you average a lost of 300 dollars a vehicle over 10 years......40 times 300 equals 12000 dollars. Or in essence you lose money on every car. But you don't seem to lose a lot and you have reimbursements that are tax free......hmmmm ...doesn't seem too bad.
#9
Subtract out roughly 30% of each $1 of reimbursement for gas and insurance = $15,680 per year. So if I average 4 vehicles per year that is $15,680 - (4x$300)= $14,480 of profit....not too shabby....and tax free.
What you are missing is that many of the vehicles actually result in a true gain on purchase price vs trade-in/sell price. I had a bid of $29,600 on the truck from a different dealer, but I would have lost the 6.25% tax shelter on trade-in, so it made more sense to sell to the dealer I was buying the replacement from.
My friends and family think I'm crazy, and my insurance agent hates me, but I'd think there are worse vices out there!
#10
On down the highway
iTrader: (4)
nice strategy ..just curious where you found discounts like that in May.. I was looking late may into june and couldnt get more than 10 off a loaded fx4... xlt's were less discount.. only wondering cause my next time around it would be worth the cash to fly in and drive home
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LantanaTXF150 (09-24-2014)