FAIL – Trading-In the Sonata

During New Years last week, I attempted to get an appraisal on my Sonata to see if I would have the same luck I did with my Infiniti G37. Back in 2011, I was able to get about $1129.80 after trading-in the G37. This time around, I was hoping to break even. What I got was a much more disappointing result. Early in the month of December, I got an appraisal offer from my local Chevy dealer. Using an “automated system”, they offered me approximately $14500. The dealer then told me that they could “probably” bump it up to about $15000, but that is the best they could do. At that time, my payoff from Hyundai was about $19300. That figure was ridiculous because my Residual was supposed to be in the $16000 range. How do you go from $19300 down to $16000 with only 4 monthly payments at $362 per month??? My thinking was that Hyundai was adding sales taxes to that number and a possible “buyout” fee, which has become ever so popular these days (just look at your lease contract closely next time and you might see it. I saw mine on my Volt’s US Bank lease). If I took taxes into consideration (which I really shouldn’t have to pay on a trade-in) I get somewhere in the vicinity of $17000, which is closer to my residual, but still on the higher side. One has to wonder how Hyundai calculates their residual values. Personally, I blame the popularity of the car. Hyundai seems to have cranked out one too many of them and it’s starting to drive down resale values.

Moving on, I clearly didn’t want to pay nearly $5000 of negative equity so I went home, detailed my car, took it to CarMax and was offered $15500. The reason why CarMax offers a slightly better trade-in is mainly due to the fact that they go by Auction pricing instead of all the KBB nonsense.  Attached in this post are some of the “estimates” I got via the Edmunds and KBB websites. I also included my CarMax offer for your reference. The dealer offered me $14500-$15000. CarMax $15500, Edmunds estimated my trade-in (in good condition) to be $15947 and KBB thought my car was worth $14321. As you can see KBB gives you a good idea as to what the dealer would give you. Edmunds seems to overvalue your trade-in.

Overall, I think using online tools to estimate trade-in values can be hit and miss. It is always a good idea to get an actual offer so you know exactly how much your car is worth. However, I think based of this experience, it’s likely safe to anticipate your “real” trade-in offer to be somewhere between what KBB & Edmunds estimates your car is worth. Ideally, you probably want to have access to Manheim Auction information to get an idea as to how much your car fetches in the wholesale market.

So after all this craziness, I have decided to finish off my Sonata lease which matures in April. It’s an okay car. I still find it irritating to pump gas, but whatever. I won’t be visiting the gas station too much in the next three years so I will get over it. 🙂



Trading-In Your Lease

Despite being a base model coupe, my ’08 G37 has been by far, the finest vehicle I have ever leased. As I detailed and prepared it for an appraisal last night, I found myself wanting to keep it just a little longer. However, the needs of the family supersede my desire for a “fun-car”, so what needed to be done, had to be done.

This afternoon, I took some time out during my lunch break to get my car appraised at Carmax and to my surprise, I am getting a sizable chunk of change in return. Before I break down the numbers, I would like to point out key reasons as to why I was able to do this.

  1. My car is in pristine condition. Not even a scratch (not since that little bumper incident anyway) and the paint is silky smooth.
  2. I am almost 5,000 miles under my mileage allowance (at 31,000 when I should be at around 36000).
  3. I detailed my car the night before. No, not just a car wash. I mean DETAIL! Every nook and cranny.
  4. I rotate my tires every 6000 miles to wear out the tires evenly.
  5. I still have over 3-months left on my lease.
  6. I suspect that the value of Infinitis has probably gone up a slightly due to disaster in Japan.

Bundle these six reasons together and here’s how the numbers look like:

IFS Payoff Quote: $23,370.20
CarMax Offer:  $24,500.00

Difference: $1129.80

Other than my need to get into a more “practical” car, I felt the urgency to do something because by May 17th I would have to pay my DMV registration again. I wanted to avoid paying a full year’s registration to drive my car another three months, so the most logical choice was to trade it in.

What I am getting into next is still up in the air, but it is nice to know that I can sell this car soon in order to get some nice equity out of it. Further proof that if you take care of your car and don’t put too many miles on it, you can get some money by selling a leased vehicle.