Making money when selling or trading a car is one of those things that is totally foreign to me. Honestly, it’s probably not the case for most of us, but are you one of those unlikely so-and-sos who has?
Usually, turning a profit is something that requires luck and, more often than not, much hard work; something I don’t have the time or inclination to do. Our own S.W. Gossin certainly does, putting his endless energy and mad skills into transforming some paperweight of an abused Altima or Dodge into a running, driving, salable car with a minimal investment in used parts. “But what about his labor time?” Shhhhh …
Stephen makes a few bucks, and also provides valuable transportation for families that likely couldn’t afford a typical used car. Thanks to SWG, they get Big Reliable Altima Energy!
Let’s face it; that isn’t most of us. Cars can make us do stupid things. One of those misguided acts is purchasing a car that’s beyond your means that quickly becomes worth less than what you owe on it; a predicament that is commonly described as being “upside down.” Did you ever make such a mistake?
Recently, cars were reportedly being parked in an area that was known for flooding just before the rains set in. Insurance adjusters were quick to investigate the possible fraud from people who likely saw getting their car declared a total flood loss as a solution to their situation.
Personally, I’ve never been upside down on any car – with a bank, that is. I rapidly end up with more invested in a ride than it’s worth. Usually, I purchase depreciated used cars, but I fear that someday our Mercedes Streeter will add up all of the repair and maintenance receipts that I gave her in an inch-thick file when she bought my last car. My guess is that the total sum will be tens of thousands of dollars; an amount that, if divided over the time that I owned it, likely could have been spent on a much newer car. I lost probably thirty grand on depreciation alone over the 12 or so years I had it, which I know is kind of par for the course these days.
Come to think of it, there’s only one time my family made a few bucks when selling a car. We bought a high-mileage six-year-old used vehicle when we moved to the UK for around a year (a 1973 Peugeot 504Ti 4-speed) and then offloaded it when returning to the States at a minor profit. How did we do it? The pound-versus-dollar exchange rate shifted during our time there, and it easily offset the slight transactional loss on the car. Kind of cheating, I know.
Win or lose, it probably doesn’t matter. If I got back all the money I spent on cars, I’d spend it on cars. How about you? What are your biggest losses and gains from selling your rides?
Top graphic image: Depositphotos.com
When you buy your cars with no more than 40,000 miles on them and sell (or “get rid of” might be a better term) them with no less than 200,000 on them, the idea of gaining or losing money on the sale loses all relevance.
Bought my first-ever new car in 2023, a leftover loaded ’22 Jeep Compass (they’re perfectly cromulent big AWD hatchbacks) for a screaming deal. Had it for 11 months and got drilled head-on at an intersection. The insurance payout was for something like 4-5K more than I paid for it.
Not an answer to the question, but: 2000 Taurus (purchased circa 2008)
Purchase price: $1800
Insurance payout: $4000 (totaled after just 7 weeks of ownership)
In 2019 I bought a Jetta Hybrid with an extended warranty for around $9500 out-the-door. I knew they had transmission problems hence the extended warranty. I drove it for a few months and then the transmission went in February of 2020. The warranty company said that they’d cover the transmission to a tune of $11.5k. Then lockdown happened and the Jetta Hybrid has a special transmission that has to come from Germany. No dealership could get a Jetta hybrid transmission, so the warranty company just paid me $11.5k. Easy $2k profit!
I still miss that car though…
When my wife’s family friend ‘Andrew’ passed away, his wife was happy to hear my son had an interest in his old 1977 Chevy truck. We bought for him, as his first car. Lack of air conditioning became a quick problem. We put it up for sale. A collector from Germany ended up buying it. Doubled the cash. He later sent a video of the vehicle driving on German roads, pulling up to a McDonald’s in Germany. How American.
I plead the 5th…
That sounds bad- I just tend to put way too much money into crappy cars and then sell them for slightly more than I initially paid. Better now that I’m on ADHD meds and don’t get distracted by every crap can that comes into my view.
One of the good things out of COVID was…
2017 Lexus IS 200t: lease ended. Purchase price was $28,000. I work at the dealer, so I knew they weren’t inspecting cars and rated everything at a zero. I paid $20,000 for it after letting it go back to the leasing company, and then I sold it to Vroom for $28,000.
2021 Toyota Tacoma TRD Off Road Premium Army Green: kept it for six months exactly so I couldn’t be accused of flipping cars. Bought for $42,500 and put 5000 miles on it and sold for $47,500. I had to get rid of it because I randomly got a…
2022 Toyota 4Runner TRD Pro in Lime Rush, the most superior TRD color (not electric lime!). I paid $52,000. I drove it for a year and put 18,000 miles on it. I only owed like $45-47 on it, but I got almost $60,000 for it from Driveway.
Now I’m about to blow those out of the water with my 24 GX 550 Overtrail. I got the first one in the country, so my three year lease is ending in less than six months. I paid $69,000 after negotiating with my boss because I worked for 2.5 months with no days off from open to close. It’s still worth about $70,000 and I owe $52,000 on it. Technically I made more on other cars, but the differential between what I paid and what I owe and what I’ll get is greatest.
Toyota and Lexus products for the win.
My coworker who always had Audi RS and other German cars and lost her ass on maintenance and resale. She took my advice and got a GX 550. Drive it for a year. Sold it and made $10,000 and just for the same car again because they’re more expensive now.
If I had any advice for a young me, it would’ve been to buy a Tacoma or FJ Cruiser when I was young. Financially would’ve set me up way better.
Lastly, how do I do this? Algorithms. Sites like Carvana and Driveway don’t have humans verifying numbers or appraisals. So if you just put your cars in every week occasionally they will just spit out stupid numbers and you can take advantage of that.
Carvana, Carmax and Driveway’s business model is to give more on trade to acquire cars and then not make money on the cars as much as gouging on financing and insurance. That’s where they make the money. So they’ll give you $28,000 for a car they’re going to sell for $27-28k if they think they’ll make $4-5k on financing.
Best win:
In 2013 I picked up a 2001 Honda Civic LX Sedan with a failing automatic Transmission. I was expecting to pay about a grand for it, the seller asked me how much money I had in my pocket, as I was planning to leave him $100 to hold it until I could arrange towing. Turns out I had $157 in cash, He said sold, handed me the keys and the tile and asked me to get it out of his driveway ASAP. Bought a used trans off of eBay and got the local shop to install it, think it was like $800 total.
I traded it in a year and a half later for $1,500 on my new Chevy Sonic LT Turbo 6MT.
Biggest Loss:
Easily my 2007 Scion tC. I dove into the tuner mod life DEEP. Full suspension, engine bolt-ons, stereo, racing seats, multiple sets of wheels and tires, Dynamat for most of the interior. I never added up all the money I spent, but easily over 102 plus the cost of the car.
Sold it for $7,700 in still owing about 5K on it.
Bought a 1987 Honda Accord for a little over $15,000, put 23,000 miles on it over two years and sold it with bald tires for $23,000. The catch was I was allowed to import it tax free to Costa Rica as part of my employment package.
In the spring of 2018, I decided it was time for my first mid-life crisis and bought my first new car – 2018 Camaro SS 1LE. Paid $40k (not including tax/title/plate, that brought it to about $44k). Wonderful car, did a few track days. But after a couple years I got a bit tired of making payments on something that sat in the garage all winter.
Covid hit, and we all know what that did to car prices. The online car sales were going hard, so I did a few of the online price check things. Vroom offered me almost $43k for it, and I let it go. I was a bit worried about the process and it was a cluster when they sent the carrier to pick it up on a day I told them not to, but I did get the money.
I’m also sure they lost their ass on it. It was trucked down to a Mannheim auction in Colorado, and they had managed to curb 2 of the wheels and dent / scratch the trunk. I do miss it.. if my crystal ball had been working, I may have held on to it. They’re still going for close to the same prices with 2-3x the mileage now.
The Subaru Brat. $8,000 invested and sold it this year for $3,500. Was glad to get rid of it though.
Best I can brag about was I bought my wife a fully loaded 2016 Escape in 2019 for $17,500. Four years and 50,000 miles later, a lady pulls out in front of her and totals it in August 2023. After dealing with the garbage company knows as AllState, we got $15,800 for it. I don’t think that’s a bad ROI. Thanks Covid!
In the early twenty-teens, a buddy and I bought a 1969 Jaguar E-Type coupe that had been flooded in salt water by two (!) hurricanes. We paid $1,000 for it.
We dragged it to his garage and began pulling parts to sell. We sold via word of mouth and eBay and shipped parts from the Alabama gulf coast to buyers in Germany, Italy, UK, Australia and Argentina, as well as the US.
Together, we cleared about $12k on the project. Happy days.
The best that I’ve done is my wife’s Crosstrek that we bought in 2016 and Harvey ruined 10 months later. The insurance cut us a check for just $47 less than we had paid for it.
I bought a Pontiac Vibe for my daughter to be her first car. It was previously owned by the proverbial little old lady who only drove it to church, the grocery store, and her job as a kindergarten teacher. Low miles and nearly perfect condition. I practically ripped my pockets out trying to get my money out to pay her for it. This was in 2019, and I think I paid $2600.
A year later, she rear ended a car, and even though the damage was minor (no airbags deployed or anything), insurance declared it totalled.
Even after paying our deductible, we got $200 MORE than I paid for the car when I bought it!
Ugh this is painful memory.
In the spring of 2013, I bought a brand new 2013 Hyundai Genesis Coupe 3.8GT, 6MT. Pretty cool car, drove well, good power, but a bit soul-less. Drove our 2nd baby home from the hospital in it. The nurses were like “wtf are you doing with a 2 door coupe lol”.
By the winter, we’d decided to go for a third, and take the plunge into minivan life. We also had a 2011 RAV4 at the time, but decided to keep that (for reasons???). I didn’t really love the Hyundai, so maybe that was it. Found a used Honda Odyssey nearby, and traded in the Genesis Coupe.
Iowa winter + RWD manual sports coupe + same year as new cars on the lot = $13k loss.
A more positive story:
I traded basically even on a 2017 Chevy SS. Bought new for 20% off (those sales were awesome), and traded a year later for the same value on a VW GTI.
I think my first Miata was an even buy/sell also. Joys of fully depreciated vehicles.
Best ROI on a project was the ~2k I made on a GX470, needed some minor updating plus a new steering rack, and managed to make a good bit of money even after a local shop screwed me on the rack install they screwed up massively. The sale price and profit rolled nicely into a house down payment with some extra cash for renovations.
Most money lost was probably ~4k on my NA Miata. It was my first fun car I bought for myself, and being just out of college, I went overboard on upgrades. Had a blast with it for a couple years, knew I was throwing away some money, took the loss and moved on, 10/10 no regrets.
Bought a 7.3 Powerstroke F350 XLT off a farm in southern Colorado for $4k. I put $600 into the ALCOA wheels, servicing, and some cleanup, and had buyers get into a bidding war and ended up selling it for $8300. I also bought a 2007 WRX for I think $17K, had it for two years, which included $12K in hail damage repair, and traded it for $18.5K.