Many of you know that my wife and I purchased a 2008 VW Beetle just a few weeks ago. We found it while searching Auto Trader and we had just enough cash to make the purchase without getting the banks or the dealership involved. The only question at the time was, “What do we do with our Jeep?” We obviously didn’t need it anymore (I don’t think there’s ever a time when 2 people really need 3 vehicles), but should we trade it in and keep our bank account stocked up? Or, do we try to sell the Jeep ourselves to get more money out of it?
While I know that trading a car in is almost always the worst financial move (because obviously the dealership needs to make money), I figured that I would at least ask the salesman what he would give me for it. His price: $4,000. Based on Kelley Blue Book, this Jeep was worth $6,400 in good condition, so I just couldn’t let him take it for $4,000.
So, we drove the VW Beetle AND the Jeep back home. The next day, my wife and I cleaned up the Jeep and took it to the shop to get looked over. Unfortunately for us, our SUV needed some new Control Arms that would cost $750 in repairs. Rather than try to sell a busted vehicle, I decided to just go ahead and get it fixed.
We soon had another surprise. There were a ton of Jeeps for sale and not a huge market for them since they only get an average of 16mpg. Within the first 2 weeks, I think I only had one phone call. Let me tell you, I was starting to get nervous!
After 2 more weeks, I had 3 parties take it for a test spin. There didn’t seem to be a whole lot of interest until that 3rd person took it for a drive. I could tell that she wanted it, and I couldn’t let her get away. It took a few days and a trip to her mechanic, but we finally settled on a price and made the transaction yesterday!
Since the tires and brakes were worn, we agreed to come down from the $6,400 Kelley Blue Book price and settled on $5,850. Even with my $750 repair, I still came out ahead by $1,100 compared to the trade-in price!
Those With Money Make Money
I think it’s true that those who have money are often able to capitalize on more opportunities than those who do not. This situation with my Jeep is the perfect example! If I would have been strapped for cash and really needed some money from my Jeep immediately, I would have only received $4,000 for it. But, since we had enough money in our savings to pay cash for the car, we were able to make an additional $1,100 by avoiding the trade-in! As we continue to build up our savings, I believe that there will be even greater opportunities available in the future!
Do you trade your vehicles in or do you sell them yourself? What is your reasoning?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.