Tech Support Forum - View Single Post - Trade-in Question

**qldit** · 08-02-2007, 07:14 PM

Good Morning Baldie559, I would suggest you have accurately described the trade-in process.
Actually purchasing vehicles on the "glad and sorry" (glad you have it, and sorry you have to pay so much) basis is really feeding the loan companies.

I normally suggest using a vehicle until it cannot be economically repaired using minimal sensible maintenance costs as the way to go and purchasing replacement vehicles for cash.

The debt trap is terribly unforgiving because it commonly happens where depreciation on newer vehicles outstrips their value.
This effect tapers off with older vehicles, but dealerships always win financially because of their sliding manipulation of values.

Vehicle financing and insurances add to the predicament, especially if the machine is regularly serviced by the dealerships.

For the best economic motoring, yet still maintaining touch with modern vehicles, the way to go here in Australia is to purchase decent proven reliable vehicles in the 2 year old bracket, especially from government type auctions with proven title, this negates the steep depreciation affect but still allows you to have a near new reliable machine and help to avoid the negative equity circumstance.
But this is cash on the hammer fall.

It is very disconcerting to find your machine is worth substantially less than money owing on it.

Many dealerships offer artificially inflated trade-in quotes or alter real value mark-ups on replacement machines that also include a string of other inflated costs which are in the interest of the finance companies and included in that financing, so the whole thing is geared against a common motorist to produce an ongoing negative equity situation.
As a basic rule of thumb anything borrowed often costs at least twice as much.

My commisserations.

Cheers, qldit.

08-02-2007, 07:14 PM	#2 (permalink)
qldit TSF Gearhead Join Date: Mar 2007 Location: Brisbane Australia. Posts: 592 OS: All Systems, mainly Linux	Re: Trade-in Question Good Morning Baldie559, I would suggest you have accurately described the trade-in process. Actually purchasing vehicles on the "glad and sorry" (glad you have it, and sorry you have to pay so much) basis is really feeding the loan companies. I normally suggest using a vehicle until it cannot be economically repaired using minimal sensible maintenance costs as the way to go and purchasing replacement vehicles for cash. The debt trap is terribly unforgiving because it commonly happens where depreciation on newer vehicles outstrips their value. This effect tapers off with older vehicles, but dealerships always win financially because of their sliding manipulation of values. Vehicle financing and insurances add to the predicament, especially if the machine is regularly serviced by the dealerships. For the best economic motoring, yet still maintaining touch with modern vehicles, the way to go here in Australia is to purchase decent proven reliable vehicles in the 2 year old bracket, especially from government type auctions with proven title, this negates the steep depreciation affect but still allows you to have a near new reliable machine and help to avoid the negative equity circumstance. But this is cash on the hammer fall. It is very disconcerting to find your machine is worth substantially less than money owing on it. Many dealerships offer artificially inflated trade-in quotes or alter real value mark-ups on replacement machines that also include a string of other inflated costs which are in the interest of the finance companies and included in that financing, so the whole thing is geared against a common motorist to produce an ongoing negative equity situation. As a basic rule of thumb anything borrowed often costs at least twice as much. My commisserations. Cheers, qldit.