What's going on with value on my 1500 Ltd?

[Cueva del Osos]

OK, some of you will shake your heads and wonder how I got so OCD...

BUT...

I keep track of our financial picture, which includes adjusting the asset value of our automobiles on a monthly basis. Until June 2020, that meant devaluing every car I've owned since 2000. I use kbb.com and take the average of the trade-in value and the private party value. It's always been pretty close to reality and then when I trade in or sell a vehicle, I've digested small, manageable value declines and not thought about the vehicle in terms of what I originally paid. This method is still pretty accurate on our Subaru...but the RAM 1500 has gone off the rails in the direction of APPRECIATION???

I've got the 2019 1500 Ltd Crew, Etorque, NO pano, hard tonneau, e-locker in Steel metallic with Indico/Frost leather. My valuations have been (again, I take the avg of trade-in and private party from kbb.com):

3/31/20: $44,700
4/30/20: $43,070 (moved in the direction I'd expect)
5/31/20: $43,070 (not uncommon for price to stay static for 2 or 3 months)
6/30/20: $47,150 (this freaked me, but I figured it would correct in July)
7/31/20: $50,890 (no correction...I'm REALLY getting freaked)
Today: $51,385 (Seriously? We're within $1k of my out of pocket to BUY the truck in May, 2019)

I have NEVER considered a vehicle an appreciating asset, but can't figure out what's happening here. Did I hit the sweet spot on my configuration? Have COVID supply chain deficiencies made 5th gen vehicles worth more (in the short term)?

I intend to trade this truck for a 2021 Ram 2500 after they complete the 5th gen conversion (the 2020 was 5th gen lipstick on a 4th gen pig) so I can boost my tow rating. If my 2019 1500 is almost worth what I paid, I'll push that trade-in as soon as possible for the truck I want, but I'm just totally perplexed by the value movement.

Anyone have thoughts on what's happening?

 

[jdefoe0424]

I saw the same thing on the value of my Laramie...made me think twice about the same exact thing as a 2500 would make pulling my trailer more comfortable. But right now I just don't have the cash to do it and I really don't want to go to a tradesman trim truck

Sent from my Moto Z (2) using Tapatalk

 

[piening2150]

COVID shutdown craziness. There is a severe lack of new vehicles available, so prospective buyers turn to used ones. More people buying used makes the value go up as desirable vehicles/options become harder to find. Used car values are bonkers right now. It won't last. Auto makers are working hard to resupply dealers and those dealers are doing their best to buy/sell more used vehicles in the meantime. Eventually the market will return to normal.

 

[Finn5033]

I’ve been checking value of mine for trade in all year. Currently contemplating trading in on an ecodiesel because the trade in values are so high right now I can get out of my lease after only 13 months for 1k negative equity. A month ago at the same dealer it was 4K negative.

 

[piening2150]

- Pre-Covid the lease buyout (and approximate trade in value) for my Charger was about 30k.
- During the shutdown the bank didn't want it back, so my son bought it for 26k.
- Now Carvana shows they'd buy it for 35k!

 

[Condor757]

My 2019 Bighorn is the same. Paid $38.7k before TTL brand new last October... today, Private party value is up past $41k, trade in value around $38k. Those numbers were all about $5k lower a few months ago. Crazy!

 

[Pyleketerson]

Yep, just traded in my 2019 Laramie for a 2020 BTS today and the sales guy couldn’t believe what they were taking my trade-in value for. Demand is exceeding supply currently.

 

[Rammit]

You honestly cannot use KBB or any other publication to determine the value. It’s an indicator, but there are many factors than affect it. Literally, every dealer will give you a different trade in number. They also typically go after what they can sell it at auction for. The Ram truck resale values have been very good, just like all trucks. The worse decline is always in the first few years. The more expensive the vehicle, the greater the initial hit. That is the same across all automotive lines for the most part. The longer you keep it, the better off you will be. It’s also why the 84 month loans are such a bad idea unless you keep it for 10 years. I have a friend who is a financial advisor. He always says to keep a car 7-10 years. I did the math and it’s pretty staggering how much ahead you get over buying or leasing a new car every 3 years. As a result I kept my last Ram 9.5 years and about 130k miles. Sold the truck for 16k and my initial cost of truck was around 38k. That resale was fantastic and much better than any sedan or SUV ( besides a wrangler). I love vehicles and always am looking into my next one, but I can’t ignore the facts. As a result, I plan on keeping this one at lest 7-8 yrs.

 

[Moparian]

If you are trying to trade up then now is the time while new inventory is low. While the trucks have appreciated what is crazy to me is how much the used Scat Pack Chargers and Challengers have skyrocketed, I see dealers selling 1-3 MY year old ones for almost MSRP.

 

[Granite2WD]

Won't you just get a great deal on your trade-in and a bad deal on your new purchase right now?

 

[jdefoe0424]

Won't you just get a great deal on your trade-in and a bad deal on your new purchase right now?

Depends, but in some of our cases we drove a truck for a year for almost nothing. Of course you lose out on tax, registration etc. Restarting the warranty or getting 0% interest can be worth it to some people in some situations.
HD's don't get much discount usually anyways and with less businesses buying them I'm sure the pricing is slightly better to get them moved.

 

[Moparian]

I'm actually in talks with my brother(GSM at a dealer) to swap my truck for a fully loaded BTS in ceramic gray. Would lower my payment/interest rate while gaining the 12" screen, Alpine, pano roof and 4x4.

 

[Condor757]

I went out to look at a 2020 Patriot Blue BTS today. Here are the numbers:

MSRP $55300
Dealer price $42000
OTD price $47000 (Freight, Processing, TTL)

My 2019 Bighorn OTD price last October was $42000.
Today the trade in value is between $36000-$39000.
Private party between $40000-$43000

So if I did the deal with them giving me, say $37000 I’d have to basically pay right around $10000 to walk away with basically the same truck except the BTS comes with Alpine, 12in screen (meh), special seats (awesome) and the blacked out package (I’m already doing that on mine). While it doesn’t sound like much it’s just not justifiable for me today, especially since my truck is paid off and now I’d have to finance $10000 and have a payment all over again.

And that sucks because I absolutely love the BTS edition!

 

[mikeru82]

I went out to look at a 2020 Patriot Blue BTS today. Here are the numbers:

MSRP $55300
Dealer price $42000
OTD price $47000 (Freight, Processing, TTL)

My 2019 Bighorn OTD price last October was $42000.
Today the trade in value is between $36000-$39000.
Private party between $40000-$43000

So if I did the deal with them giving me, say $37000 I’d have to basically pay right around $10000 to walk away with basically the same truck except the BTS comes with Alpine, 12in screen (meh), special seats (awesome) and the blacked out package (I’m already doing that on mine). While it doesn’t sound like much it’s just not justifiable for me today, especially since my truck is paid off and now I’d have to finance $10000 and have a payment all over again.

And that sucks because I absolutely love the BTS edition!

I'd say you're making a wise choice here. $10000 is a lot to pay for the small upgrades you mentioned.

 

[1Zach1]

Interesting thread. I went and did a quick check at Carvana for my Jeep Grand Cherokee that I was/am planning on trading in when my 2021 build comes in. I'm half tempted to just sell it now based on the price as I don't know if the dealership would offer that much or if prices will fall back down by the time 2021 orders start actually coming in.

 

[Condor757]

Interesting thread. I went and did a quick check at Carvana for my Jeep Grand Cherokee that I was/am planning on trading in when my 2021 build comes in. I'm half tempted to just sell it now based on the price as I don't know if the dealership would offer that much or if prices will fall back down by the time 2021 orders start actually coming in.

Good question. My brother in law is the used car sales manager at a busy airport Enterprise location, he moves massive amounts of used cars for them. He told me yesterday that, while used car values are through the roof today, they will swing back and swing back hard, in the near future. Basically the used car market will massively and quickly correct itself once new manufacturing supply catches up again. So yes today is a golden opportunity for used car values that just will not last long. Enjoy / take advantage of it while you can.

 

[Grape_Ape]

I know it's not 100% accurate and is a guide but I was blown away that after 3 months of ownership in today's market I could basically walk away from my truck without owing anything.

Crazy times we're living in right now.

 

[Justbry]

Last Friday I went to Carvana checked my 19 Rebel, they came in at just under 43k, I paid just over 44k June 2019, when rebates on RAM’s were huge, WOW , love my truck will not change it. Then checked my wife’s Lexus, they offered me 5k over what I still owe on her lease, that I will do this weekend. These are crazy times and we have to take advantage of it if we can.

 

[jdmartin]

You honestly cannot use KBB or any other publication to determine the value. It’s an indicator, but there are many factors than affect it. Literally, every dealer will give you a different trade in number. They also typically go after what they can sell it at auction for. The Ram truck resale values have been very good, just like all trucks. The worse decline is always in the first few years. The more expensive the vehicle, the greater the initial hit. That is the same across all automotive lines for the most part. The longer you keep it, the better off you will be. It’s also why the 84 month loans are such a bad idea unless you keep it for 10 years. I have a friend who is a financial advisor. He always says to keep a car 7-10 years. I did the math and it’s pretty staggering how much ahead you get over buying or leasing a new car every 3 years. As a result I kept my last Ram 9.5 years and about 130k miles. Sold the truck for 16k and my initial cost of truck was around 38k. That resale was fantastic and much better than any sedan or SUV ( besides a wrangler). I love vehicles and always am looking into my next one, but I can’t ignore the facts. As a result, I plan on keeping this one at lest 7-8 yrs.

I've always had a lot of driving in my life due to commuting. I always aimed to have my cost of ownership (outside of consumables like gasoline and oil changes) 5 cents or less per mile. So if I got 100k miles out of a car, I wanted to own it for $5k or less - i.e., buy it for 10 and sell it for 5. I've had a couple of vehicles I made money on - had a small Mazda truck I put about 60k on commuting and sold it for a grand more than I had in it - but most of my stuff has ended up in 3-4 cents range. The trick is not to keep it until the wheels fall off, but to sell it *just before* the wheels fall off when you can still get a return. I've had the best luck in the past buying at 50-70k and selling at 160 or so, but my current (and last) commuter before I retire I bought new so I could limit the buy/sell cycle at this point in life. I paid $12700 brand new for it and am almost at 160k, which is just under 8 cents /mile right now. But if I get $4k for it after I retire, and I put another 5k on it in miles, I will be right at 5 cents. BUT, in reality I'm actually way ahead of that because I own one of the Kias that they were scamming the EPA numbers and so I get rebates back every so often based on my miles. So far I've gotten back about 1500 on this vehicle. I always said that eventually I'll make this car be free

 

[Sergeant Jim]

check out the Youtube channel "yourautoadvocate" it is a father and son. The father had been in the car business for 40 years rising to the GSM of a mini dealer. They post daily and have had several videos talking about this very thing. Used car supply is WAY down and places like carvana and carmax are putting out inflated numbers to get the inventory to sell.