How to trade a vehicle, for a vehicle, for trade in.
December 31, 2012 10:14 AM   Subscribe

Should I trade my rebuilt title vehicle for any other vehicle, just to get an increased trade in value?

I am in the market for a 2003+ Toyota Sequoia. Currently Mrs. NotSoSimple and I have a strict budget we would like to adhere to, so we have a hard limit as to what we will spend on a vehicle. We also want only one car payment. We owe $7k on our current vehicle. The plan is to sell/trade our other two vehicles we owe free and clear: 2002 Subaru WRX w/ Rebuilt Title and 1990 Isuzu Trooper w Clear Title. Problem is the WRX. Rebuilt title, no one will take it for anywhere near the $7k I need. I keep getting people offering to trade vehicles, which I shrugged off. 1 month later, still no traction, still getting offers so I began thinking outside the box.

What if I take a trade private party with someone who had a vehicle that would give me the $7k or more I needed. Then turn around and trade that vehicle in to a dealer, pay off my current loan, and purchase their car. Stupid? Genius? Any other tips on how to get out of the bind. Note to self and others: DOnt get a rebuilt unless you are FOR SURE never going to sell it. I was not forecasting 5 years down the road when we purchased it...
posted by NotSoSimple to Work & Money (10 answers total) 1 user marked this as a favorite
Are people offering trades of cars that are actually worth that much more than the WRX? If they had a $7k car and wanted a rebuilt WRX couldn't they just sell their car, buy a WRX, and pocket the difference? I would be very suspicious that someone offering you such a deal is trying to rip you off and the car is, for some reason, not worth as much as they want you to think.
posted by ghharr at 10:52 AM on December 31, 2012

Response by poster: Unknown, as I was not open to trades until I thought about it. I would be pulling up values and talking to the dealer(s) to see what they would give me to make sure I wasn't stuck with something with less value.
posted by NotSoSimple at 10:54 AM on December 31, 2012

are you asking if this is ethical? Sure, as long as you are upfront about the rebuilt title. I'm not sure any 2002 Subaru is worth $7,000, unless you have some crazy options, and low miles.
posted by kellyblah at 11:11 AM on December 31, 2012

Response by poster: Not if it is ethical, but is it worth the hassle? Anyone who is interested in my WRX, the first thing I tell them is rebuilt title. I am not out to take advantage of anyone. I am selling in portland, OR so prices for Subarus are already inflated.
posted by NotSoSimple at 11:15 AM on December 31, 2012

The WRX is going to be a tough sell, no matter how well it was rebuilt (you don't say how extensive the rebuild was). You'll be extremely lucky to get half of that $7k you want. I'll bet you'll be letting it go for no more than $2k.
posted by Thorzdad at 12:01 PM on December 31, 2012

So you're asking if you can trade your car, worth less than $7k, for a car worth $7k?

I think you'll have difficulty on two fronts. Why would someone trade you a more valuable car for your WRX? And when you trade cars, you still need to give them the title during the transaction. If you owe money on the car, the bank has the title, and you'd need to pay off your loan to get it back.
posted by hwyengr at 12:37 PM on December 31, 2012

Oh, and one more thing, in my experience a car dealer will try to make at least $3k on every used car transaction. So, if you want to clear $7k on a trade-in, you'll need to give them a car worth $9-10k on the street. Trading a car in is only for convenience, never for making money.
posted by hwyengr at 12:40 PM on December 31, 2012

Response by poster: The WRX is paid off, title in my hand. Loan is on our other car. Most offers are coming from younger kids who want to get out of their truck and into a WRX. Ive been offered 3 different Ford pickups, a Dodge, and a Toyota. The whole point is to get rid of the rebuilt title vehicle (My wrx) and get something with a clear title. Sounding like more PITA than it is worth.
posted by NotSoSimple at 2:41 PM on December 31, 2012

Don't you have to pay taxes on that sort of exchange in the USA? Here in Australia I'm pretty sure you'd be paying stamp duty on the value of the car you are trading for. The stamp duty here is on the value OR the purchase price, whichever is higher, so even though you technically are paying nothing for the car (by trading) you would still be on the hook for its value (presumably $7000-10,000 if your plan works out).
posted by lollusc at 6:04 PM on December 31, 2012

Response by poster: No sales tax in OR which also applies to cars. I would be on the hook for $80 title transfer with the DMV.

Might not need to go that route. Found a private party SUV I am interested in for a good price. At that price point, it will allow me to sell my WRX for pretty low and still pay off my other loan.
posted by NotSoSimple at 10:29 AM on January 2, 2013

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