Snow tires and intelligent driving... not to mention that VDC actually working to your advantage this time!

 

Hey guys,

Ok so I went to the dealer on Saturday.
They were willing to put me into a C. Blue '03 6mt with Nav.. I didn't want to shell out $5,000.00 just yet. Payments would go up to $740.00 give or take on a puchase for 60months with low apr of 2.1% Since I have personal plates, I don't have to register the plates. There would just be a $45 transfer fee. Anyways, I'm going to hold off..I think I'm going to keep it and refinance it. The car was (CAP'd Selling Price) at $40,000 Nov 1, 2002. Payoff is now $35,000.00 and some change. I'm just going to hold onto or find someone to cover the payoff. I double checked my lease contract. It states I can cancel my lease at any time. Only when I leased my car with America Honda Finance (AHFC) for my TL-S did they require a minimum 12 months. I'll see what happens 6 months from now. Was a nice thought!

'03 Sedan / Navi / Desert Platinum / Delphi Sat / 35% Tint

104024-GYAL8Rtintrear.jpeg

 

nwG - I think everyone agrees with Webster's basic definition: to fall in value. Further, we would probably all agree that total depreciation is actually the net end result of multiple components, i.e. age, wear, or market conditions. In real life, that simply translates into the difference in financial position before and after all is ultimately said and done. We get it.

Now what I don't get is how the car in this example is worth 26,300 for the purpose of calculating depreciation. This is simply not correct. The dollar consideration paid by a dealer on trade does NOT represent the market value of the car. It more accurately represents the fair trade-in price paid by a dealer who understands 1.) the seller will benefit from an additional tax break and 2.) their used car department needs to make a profit on resale.

The total value I received from the dealer trade vs. selling outright was 26,300 plus the tax break, which at my county tax rate totals 28,500. Money thrown away? What??! Where? The sales tax benefit is very real. It most certainly effects the total cost of the transaction - it MATTERS. So why shouldn't it be factored into the gain/loss calculation when determining market value and depreciation? To ignore or omit the effect of the trade-in tax benefit in determining the market value of the car results in an inaccurate total when figuring true out-of-pocket cost. I appreciate your perspective but it seems pretty clear - market value vs. trade-in value: an apples to oranges comparison IMO.

But perhaps more importantly, do you really believe the car is worth only 26,300, or that there would have been a serious shortage of buyers if I advertised it for that amount outright? Man, I hope not. That IS serious depreciation! Thankfully, so far there is plenty of hard evidence that the true market value of a slightly used G sedan is significantly higher. Regardless, and it doesn't matter one lick to me how anyone calculates it, I'm just curious how much folks feel is a reasonable/unreasonable amount of total out-of-pocket $ were they to sell their G today.

GSGNG35 - search here (inc Mods forums), FreshAlloy and my350Z forums for info on retrofitting LSD to your sedan if you really feel it's necessary. It's doable with new parts for about $1100-1200, I think, plus install. Gsedan35 has put out lots of details on this. Also, initial traction will be most affected by good snow tires and your sedan's existing brake LSD system, not VDC. The latter will hopefully keep you on the road if you get too agressive in slippery conditions. Knowing your car's limitations is the key to intelligent driving.

 

You’re right. The depreciation hit you took would have been less had you sold your vehicle to a private party, versus letting it go for 26,300. So in the end, you lost even more money.

Now, perhaps you made that up in the dealer trade via saving on taxes, perhaps you didn't. Hard to tell unless you had a buyer and a real number they were willing to pay.

And you didn't throw your money away: What did you put down on the first car? It's no longer in your bank account is it? What did you pay in interest on the first car, it's no longer in your bank account is it? What did you pay in doc fees (twice), no longer in your bank account is it? How much of the principle of the first car did you pay off, no longer in your bank account is it? How much did you pay for service on the first car, no longer in your bank account is it?

See, you're hit not only with depreciation, but your bank account was hit too.

The only thing dumber than trading in your car after five months of ownership is professing it to be a good deal.

 

<blockquote><font class="small">In reply to:</font><hr>

The depreciation hit you took would have been less had you sold your vehicle to a private party, versus letting it go for 26,300. So in the end, you lost even more money.

<hr></blockquote> No. Without a private party transaction value to compare the actual net trade-in value to, you can not possibly conclude this. Obviously, if it sold outright for more than 28,500 the depreciation would have been less when compared to the actual value of the trade plus tax credit. So *sigh* I guess we're right back to whether including the tax credit in the depreciation calculation is valid. Ok by me, I'll just leave everybody here free to make up their own mind on that one.
<blockquote><font class="small">In reply to:</font><hr>

Now, perhaps you made that up in the dealer trade via saving on taxes, perhaps you didn't. Hard to tell unless you had a buyer and a real number they were willing to pay.

<hr></blockquote> Speculate all you want about what a private sale might have generated, but I actually did receive about $2200 in sales tax credit which, together with the cash consideration, gave me a very tangible 28,500 equivalent market value upon disposition of the vehicle. I decided that market was quite reasonable given the age of the car.

So *sigh* I guess we are right back to what constitutes a reasonable amount for the wear and tear portion of depreciation. Since I never professed to offseting all costs associated with car ownership, I GIVE. The deal WAS DUMB. You WIN. Because you will not share either a specific $ figure or range to define your opinion of reasonable depreciation, I will assume you are simply unwilling to absorb any at all. Thank you for your contribution to this thread!

 

Lol, you guys are nuts. Can we call this thread closed, pretty please! [img]/w3timages/icons/wink.gif[/img]

2003 G35 Sedan
Brilliant Silver Auto
Premium, Winter, Wood
35% Tinted Windows
Clear Side Markers
Custom MB Quart / Eclipse Stereo System

 

dholly... what was the odometer reading during time of trade?