Trade in *mint* 2015 CPO for higher mileage 2014 ?

What is the selling price for 2014 corris grey and what will you get for your 2015 on trade in? You still will have to pay off your car loan of more or less $34,000 first. So, price of your trade in, minus $34,000 on loan balance plus $10,000 is the price for a new car? Something does not add up.
In theory, if your 2015 was $10,000 more than 2014 you want to buy , after paying your loan you still,would have to put over $20,000 to have no car payment. .Could you explain your calculations?

TLB said:

I wouldn't do it just to get a different color.
Is the change worth $10,000 ? Plus more miles on odometer and no CPO.
It just does not make any sense. You asked so I answered.
But,.... it is your money and you can do whatever you want. Do whatever will make you happy.

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Lol maybe you are missing the save 26,000 Plus whatever 1.8% of that is, Plus the added benefit of having the cash to use for other purposes, possibly to make % on investing, so a net overall difference we’ll worth the move even from a pure numbers perspective.

TLB said:

What is the selling price for 2014 corris grey and what will you get for your 2015 on trade in? You still will have to pay off your car loan of more or less $34,000 first. So, price of your trade in, minus $34,000 on loan balance plus $10,000 is the price for a new car? Something does not add up.
In theory, if your 2015 was $10,000 more than 2014 you want to buy , after paying your loan you still,would have to put over $20,000 to have no car payment. .Could you explain your calculations?

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This is super simple looking at it like this, forget what pays for what, it’s just total cost for either choice:

If he does nothing he is committed to spending 36k more from now over time Plus that interest until loan closes.

Or

He can spend 10k total and he is done.

Trade in is almost never the best math though. Private sale, then separate purchase is ideal but most people don’t have that luxury or time commitment.

Frank8 said:

If your interest is 1.8% you can take the 36k and buy ATT (T) and get about 6.5% dividend yield.

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Hmm, I hadn’t realized T was higher than most. Just checked about 300 stocks I watch and found ETP to be 12% and also a compelling chart recently.

Problem w att is it could also lose 10-20% in next several months if it doesn’t turn around soon.

There are also a few others in the 5-6% zone but I’m going to dig into ETP tomorrow.

backcountryLR4 said:

I have a mint (inside and out... like inside is insanely perfect, the leather is brand new and matte still) CPO white 2015 LR4 HSE LUX/HD package/blackpack/Towing with 35k miles and 4 years left on the warranty.

I also have 3.5 years left on a $800 a month payment which is 1.8% APR...

Just drove past my local dealer and saw a Corris Grey (color I always wanted) 2014 LR4 blackpack LUX with all the same options and of course the HD package with 61k miles on the clock and therefor no MF warranty but one owner for a lot less than what I paid and for what I think my current ride is worth.

Would any of you trade in and maybe drop another $10k in cash to downgrade to a higher mileage vehicle without a warranty but then have no more car payment?


I AM TORN....

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Just to be safe here, do you mind saying what you think current car is worth as a trade/sell vs the asking price on the 2014? Be brutally honest, no need to fluff the trade number.

I’m actually now wondering on the math too. How can you owe 36k but have enough equity to cover all but 10k on the other car? Maybe it works.

Let’s say asking on 2014 is 25, then -10 as cash out of pocket means you have cover 15k from equity in yours plus 36k owed, means you bought yours for at least 51k? No I guess something is off. Pls provide specifics... the logic works but the actual numbers don’t yet.

But here’s a little incentive for not having a loan even when it seems “cheap”.

Commuting to parting with $800/month is one thing but even at 1.8% you’re actually giving up that plus the loss of using that $ in something like ATT investment purely for dividend. 1.8 + 6.2 = 8% compounded on the $800 you’re already ok with not having .... over 3 yrs that’s a net difference of $4100 aside from capital retention. About 3000 is actual 6% dividend gain but I’m adding what you’re not losing on the loan which you could also add to the ongoing growth of the investment.

This is a simple deal too, you start with your first ‘payment’ of $800 and add $800 more each month and the dividend gets reinvested as well.

What also awesome, while your purchase of the vehicle is a 100% known depreciation slope, the investment may drop some, but is just as likely, probably more, to go up or at least hold level.

Now, if one is really good at the investment side, you might now want to tie up capital in buying a car with cash if there are 0% or low % loans....but guess what, maybe consider only buying the least expensive version you can justify.

Meaning, why stop at 2014 pricing, why not 12, 10?

Look at what your $800/month $ can do vs just dying on the vine slowly

If your 2015 is worth a great amount, you could actually use that 10k to buy an lr3 outright.

Which leads me to realize, LOL @ myself ... how can you owe 34-36k and have any more than maybe 10k equity? Autotrader shows low mileage ones for 45-52 tops.

Trade in, if you’ve never been down that road, is where you cry cause it’s never what it seems like it should be worth.

I’d dump it immediately and buy a well maintained lr3 for cash outright and stop the $ outflow.

I only used ATT as an example. There are many very conservative stocks/mutual/ETFs that have good yields.

But keep in mind that 1.8% is very cheap money. Interest rates are going up and you’ll not likely ever get a loan at that rate again.

The only way you’re gonna come out of a trade with a *** of cash is if you wind up with a vehicle that is worth a lot less and you’ve taken the difference in cash.

That *** of cash is going to be very expensive money since you’ve given up the equivalent amount in vehicle equity.

With all this sophisticated talk on investments and such - you guys might just be ready for the D5 soon...

Hayseed_LR4 said:

With all this sophisticated talk on investments and such - you guys might just be ready for the D5 soon...

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Naah, it’s too downmarket
By the way, the LR4 depreciates pretty briskly. I wonder how the D5 will do? I think it’s gonna be an “ouch”.

Some additional background:

I may be widely over-estimating the value of my current vehicle, and have not yet taken it in to see what they would offer.

I have however looked at every CPO LR4 for sale across the country. The 15s and 16s with my same options are listed from 59k-68k. Try finding a Lux HD package blackpack with the Land Rover manufacturer warranty right now. Of the ~200 CPOs available right now, we are talking single digits that meet the same criteria (found 4). (again, from my research... still could be way off)

From regular pre-owned vs CPO, seems like I am seeing around 6-7K value there for the CPO.

So my rough math of ~36k owed and (hopefully) ~56k trade-in and a ~36k purchase price(listed at 39k) puts me closer to the $16k cash out of pocket to buy the other car with no loan.

I may be crazy...

I have to drive past the dealer to get to the airport tomorrow and may see what they say, but there is no way I think my current vehicle would be worth less than $50k. (have 65k miles and 4 years left on bumper to bumper, transferable manufacturer's warranty.) I am curious @jwest if the ones you saw on auto trader had that? If not, that would match what I saw on Landrover.com of the difference between vehicles with no warranty vs ones with the warranty. (difference of about $6-7k)