Negative Equity

[Northeast16SS]

Holy cow!! That can't be, can it? I paid several multiples of that for my current tow vehicle (2014 Mercedes GL) and the Ram dealer offered me $21k for the trade. I declined and figure that on a good day I'll get $30k for it to a private party. Even at that, depreciation is nothing short of brutal on the Merc. Can Toyotas be that much better? Sure as heck the depreciation on my shiny new Ram will also be brutal but the current Tundra dates to about 2008, as I understand it, so wasn't really a serious consideration.

I think I partially caught lightning in a bottle because the truck market in general has seen huge appreciation since 2009. The same truck today sells for ~$40K. That being said, Tacomas, Tundras and 4Runners have some of the best resale value in the industry and actually make a decent investment as far as automobiles go. We also flipped a 4-runner and Sienna, all with positive equity. They are also easy to sell private party because of the reputation for reliability. To your point though, the Tundra is outdated and you don't get as much for your money as far as options and amenities. Tacoma is tops for mid-size at 70% resale at 36 mths and 60% at 60 months.

Sorry OP......didn't mean to hijack your thread. Just my long way of saying, pay off your equity. Look at resale value of your truck but only a year older (to see where your will be in a year) to get a feel for whether or not it will be better to part with it now or later.

 

[Gman]

It's a Tacoma thing. It's pretty crazy what those go for used.

I just got out of a 2016 Mercedes GL 450, and depreciation on that was brutal. I bought it to keep it forever, just never fell in love with it. Still got out of it $2K more than book value due to competitive bids on a great build sheet and condition.

 

[19RamLimited]

Brother got 32 for an FJ cruiser he paid 28 for. Certain Toyota’s bring the rain

 

[JoeRam]

as mentioned not to hack the thread, but I too years ago beat the system if you will with a toyota. Leasing a 4runner and when I called for the pay-off to purchase it, the women on the other end of the phone said "If you don't pay this off now and own it, your nuts" She could not believe my payoff vs what they were selling for and the payoff was less than the remaining payments owed only to give it back. Toyota's do bring the Rain as @19RamLimited stated.

 

[Dog Hauler]

as mentioned not to hack the thread, but I too years ago beat the system if you will with a toyota. Leasing a 4runner and when I called for the pay-off to purchase it, the women on the other end of the phone said "If you don't pay this off now and own it, your nuts" She could not believe my payoff vs what they were selling for and the payoff was less than the remaining payments owed only to give it back. Toyota's do bring the Rain as @19RamLimited stated.

Savor it, for sure. Depreciation on the Ram will more than make up for it.

 

[Kamikaze6780]

Yeah you only live once but you should be careful also, least you want this one life to be nothing but negative, paranoia, and always scrounging for money. Use your head and just be responsible. Sometimes you can't always have the toys you really want.

 

[kevin1914]

Me personally, I would wait a year and pay off the truck before I bought a new one. The price of the new ones is only going to keep going down and you will give RAM another year to work out all the kinks in the manufacturing process. As far as equity in cars go, that's why I always bought Toyotas up until recently. They allowed me to gain substantial positive equity and use it to step up into a more expensive vehicle. I paid $27K for my brand new 2009 Tacoma and just sold it for $18,500

I drive a Lexus currently and it’s unbelievable how fast it has depreciated. Almost 15k in just under 2 years. I drive a lot but cars are a terrible investment for they all depreciate. If I didn’t have such a long commute I’d always lease.


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[Stasek]

I was wondering what kind of car you had that has you under water so much after only couple years. Surprised that it’s a Lexus, but if you put a lot of miles on, there’s no magic bullet. At least it’s not one of the German cars - talk about taking a hit on depreciation! You’re probably better off keeping the Lexus for a while - while not they used to be, they are still some of the more reliable cars out there. I purchased an ‘08 LS460 for my wife couple years ago (with 89k miles), and besides O2 sensor and regular maintenance, it’s been very reliable (32k miles later).

 

[Old Ray]

I am / was the King of being under water, huge negative equality, and then my grown kids for different reasons needed financial help, the only way to make the numbers work for the bank was to get a debt reduction loan with some extra against my paid for house. So more debt spread over a longer term with lower payment, being retired I asked the loan officer how they ever expected me to live long enough to pay it back and he said " IT DOESN'T MATTER, the estate will pay it or we will take the house". Well if they weren't going to worry about it, why should I, paid off all my car loans, credit cards. etc got a good credit rating and bought two new cars with dealer financing. Not smart but happy, ......................buy it!

 

[lambone]

If you pull the trigger, it’s probably wise to purchase gap insurance.

I’d say go for it if it makes you happy. Just know that as soon as you drive it off the lot you are going way deeper underwater.

The wise decision would be to wait a while and buy a low miles used ‘19 and let someone else eat the new car depreciation.

I’m too impulsive to follow my own advice.

 

[Cannonball]

I’m currently Looking at a 2019 Laramie priced at 55k MSRP. The dealer is offering 13k off via combined dealer discount and rebates. My trade has about 8K negative equity. This would put the OTD at about 51k after doc + ad fee.

Is this a wise purchase considering I’m carrying so much negative equity?


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IMO you'll get everyone's opinion but opinion is created from their own specific experiences. Know that History tends to repeat itself. It first is wise to understand why you are still 8k underwater with one vehical yet own another free and clear.

 

[Chris]

The wise decision would be to wait a while and buy a low miles used ‘19 and let someone else eat the new car depreciation.

I’m too impulsive to follow my own advice.

Scary advice, considering the amount of posts with people that traded back 6 month old trucks due to major issues they couldn’t get fixed.

Anyone selling a vehicle less then a year old is usually doing it for the same reason you shouldn’t buy it.

 

[harleyrae]

$8,000 is a lot to just roll down a window and throw onto the freeway. Think long and hard. How do you justify an $8,000 loss?

Do you plan on writing a check for the difference or rolling it into the financing package? If you plan on writing the check then the impact is less severe BUT if you plan on rolling it into the financing package then that $8,000 got a whole lot bigger. Can you at least use a zero% interest card to cover it? Does the taxes you pay lower the $8,000 loss?

What are you gaining by purchasing a new Ram?

Want vs common financial sense.

Personally at this stage of my life with (hopefully) only 5 working years left to retirement I would pull the trigger. I did just buy my rebel and also plan on keeping for at least 10 years. Yes I could have used good financial common sense (financial advisor said invest for retirement) and put it in savings BUT I have more years behind me than I will ever have in front of me so the saying goes "enjoy life while you can"....

 

[lambone]

Scary advice, considering the amount of posts with people that traded back 6 month old trucks due to major issues they couldn’t get fixed.

Anyone selling a vehicle less then a year old is usually doing it for the same reason you shouldn’t buy it.

Fair enough but not nescisarily the case. People trade in new cars for all sorts of silly reasons. Many people buy new cars because loans are so easy to get and then realize they can’t afford the payments. Some people just realize they don’t want to drive a full size truck around town every day.

 

[kevin1914]

$8,000 is a lot to just roll down a window and throw onto the freeway. Think long and hard. How do you justify an $8,000 loss?

Do you plan on writing a check for the difference or rolling it into the financing package? If you plan on writing the check then the impact is less severe BUT if you plan on rolling it into the financing package then that $8,000 got a whole lot bigger. Can you at least use a zero% interest card to cover it? Does the taxes you pay lower the $8,000 loss?

What are you gaining by purchasing a new Ram?

Want vs common financial sense.

Personally at this stage of my life with (hopefully) only 5 working years left to retirement I would pull the trigger. I did just buy my rebel and also plan on keeping for at least 10 years. Yes I could have used good financial common sense (financial advisor said invest for retirement) and put it in savings BUT I have more years behind me than I will ever have in front of me so the saying goes "enjoy life while you can"....

I’m just looking to trade out of a car earlier than I expected. I may be undervaluing my car based on what local dealers have offered me. Kbb shows that the retail value is 2k more than what I owe and average trade is actually 4500 less than what I owe. These dealers have low balled me offering 8-9k less.

Talking to a friend, he’s telling me that the dealership that I’ve worked with are basically trying to steal my trade to make up for heavy discounts offered. The less the discounts the fair the offer for your trade.

I have a 4 yr old Lexus with about 62k miles which NADA is saying -675 is being deducted from the overall value for. Probably best to keep the car or sale it out right


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[Chris]

I’m just looking to trade out of a car earlier than I expected. I may be undervaluing my car based on what local dealers have offered me. Kbb shows that the retail value is 2k more than what I owe and average trade is actually 4500 less than what I owe. These dealers have low balled me offering 8-9k less.

What is the Kbb instant cash offer? If it is close to what you owe, then take that offer to the dealership, and if they don’t match it (or get close enough to break even with taxes), sell it to the kbb affiliated dealer. I got $4k more for my trade doing that.

 

[Stasek]

I’m not sure if you tried it, but give vroom or carvana a shot. From what I’m reading, most people have good luck selling to either one of them.

 

[dutchman187]

I’m just looking to trade out of a car earlier than I expected. I may be undervaluing my car based on what local dealers have offered me. Kbb shows that the retail value is 2k more than what I owe and average trade is actually 4500 less than what I owe. These dealers have low balled me offering 8-9k less.

Talking to a friend, he’s telling me that the dealership that I’ve worked with are basically trying to steal my trade to make up for heavy discounts offered. The less the discounts the fair the offer for your trade.

I have a 4 yr old Lexus with about 62k miles which NADA is saying -675 is being deducted from the overall value for. Probably best to keep the car or sale it out right


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You can also get a free estimate from Carmax to see what they are offering. If it is more palatable, take it to your dealer and see if they match it.

 

[kbUSMC2012]

Sell that **** to Carmax. They usually give more than KBB. And most dealers will match a CarMax appraisal if that works better for you with the tax reduction for a trade.

 

[SpeedyV]

Sell that **** to Carmax. They usually give more than KBB. And most dealers will match a CarMax appraisal if that works better for you with the tax reduction for a trade.

Carmax giving more than KBB? Hahhhaahahhhahahahahaha...