Help me understand what is the better deal

Ask the Hackrs
1

Option 1: Sell car to CarMax for $63,000. After remaining loan is paid, walk away with a check for $15,500

Option 2: Use car as a trade-in at the dealership where leasing a new vehicle from

New car price: $32550
Residual: $20460 (62%)
Taxes: $1152
Amount offered for trade: $60000
Trade Difference: -$27540
Doc Fee: $125
Title/Misc Fees $1137
Net price: -$26188
Trade payoff: $47500
Balance: $21312
Tax rate: 7.125%

In my simple mind, option 1 is better, because I walk away with a check with $15,500 which is tangible.

2

Indeed (also check other places for buyout quotes). Then evaluate the deal on the new car without worrying about the trade-in to muddy the waters.

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I got about 4 quotes, and CarMax’s offer was the highest by at least $3k

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4

Isn’t it obvious? Option 1 gets you $3000 extra for your car. Why even consider option 2?

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5

You can structure option 2 to walk away with a check, too. That in itself doesn’t make option 1 superior. What makes it superior is that they are offering $3,000 more on your trade.

But this is apples to presumed oranges. What are you going to buy or lease under option 1? And how good of a lease deal is option 2?

6

Did you get a quote from the dealer without a trade involved? If the deal is the same go option 1 obviously.

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I wasn’t sure if I was missing something with the tax savings. The option 2 dealer is touting the tax savings benefits. They are saying the tax savings is $3900, which the tax on the vehicle is only $1152, so I am not sure how the tax savings is $3900

8

The cost of the vehicle is the same either way, $32550

9

I would still lease a vehicle from the dealership involved in Option 2 either way

I asked the dealer involved in Opt 2, if I could use the equity in my trade to just pay taxes and other upfronts and then get a check for the remaining balance, because I really didn’t want to put the remaining equity (about $10k) as a down payment. They said they’d have to check to see if that was possible. If they say the entire amount would need to go towards the new lease, then it’s an easy decision.

10

Dealer of option 2 is full of sh*t. You absolutely can have a check made out to you, for whatever portion of the trade value you wish to see. This makes me think numbers are being manipulated.

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