Trade 05 QC for 06 Mega should I?
11-13-2006, 01:16 PM
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Trade 05 QC for 06 Mega should I?
I appreciate any and all opinions. The dealership I bought my 05 from called on the weekend and I went to see them today. They are offering to put me in a new 06 Mega Cab that is very similarily equipped to my 05 Quad Cab and switch over the front receiver, programmer, intake, capper, brake controller etc to the new truck and payments would be the same just have to restart the clock for another 60 months. My 05 has served me well and I wasn't even looking but I have racked up 56,000+ miles in the last year and a half and will need new tires and brakes within the next couple of months which I figure will run $2000 with some other maintenance. Is there any reason I should not go for this deal? Thanks for your opinions.
11-13-2006, 01:25 PM
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Advice:
1. Never look at a deal in terms of payments. There are three relevant numbers you must consider: (1) The OTD price of the new truck, (2) The trade-in amount they will give you for your old truck, and (3) The interest rate you can secure for your loan if you need one.
2. I doubt they're giving you a fair deal.
3. Don't let those nutbags take you for a ride.
4. You bought the truck partially because of its longevity, which you'll never experience with this trade.
5. $2K in maintenance will be cheaper than the trade, I guarantee.
1. Never look at a deal in terms of payments. There are three relevant numbers you must consider: (1) The OTD price of the new truck, (2) The trade-in amount they will give you for your old truck, and (3) The interest rate you can secure for your loan if you need one.
2. I doubt they're giving you a fair deal.
3. Don't let those nutbags take you for a ride.
4. You bought the truck partially because of its longevity, which you'll never experience with this trade.
5. $2K in maintenance will be cheaper than the trade, I guarantee.
11-14-2006, 11:03 AM
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I wouldn't but I think the megacabs are hideous... now, if they offered it in a long bed, that would be a different story. If you are set on getting an 06 mega, then sell your truck on your own, and walk into the dealer on your own terms.
Scott
Scott
11-14-2006, 11:17 AM
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Depends on how much you want to lose vs. what you think you might gain.
Get a piece of paper and pencil out and do the numbers. Guarantee you the dealer is the one making the money. BUT, if you really want a MC then what the heck go for it.
Trading your truck in is a cash-cow for the dealer. Good advice to sell it yourself.
Get a piece of paper and pencil out and do the numbers. Guarantee you the dealer is the one making the money. BUT, if you really want a MC then what the heck go for it.
Trading your truck in is a cash-cow for the dealer. Good advice to sell it yourself.
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11-14-2006, 06:17 PM
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If you've got 56K miles on yours already, and they're going to get you into a new MegaCab for an additional year of payments...
Sheesh - depending on what your payments are - let's say $500 a month - that's a $6K difference between the two.
I'd have to imagine the difference between a year old QC with 56K miles and a brand new MegaCab is probably a bit more than $6K.
I'd say go for it.
Personally, I'm going to wait a couple of more years and look at the Megas with the 6 spd auto in them at a later time. But I also don't drive the number of miles you do per year.
Good Luck !
Sheesh - depending on what your payments are - let's say $500 a month - that's a $6K difference between the two.
I'd have to imagine the difference between a year old QC with 56K miles and a brand new MegaCab is probably a bit more than $6K.
I'd say go for it.
Personally, I'm going to wait a couple of more years and look at the Megas with the 6 spd auto in them at a later time. But I also don't drive the number of miles you do per year.
Good Luck !
11-15-2006, 09:17 AM
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Thanks to all who replied and offered advice. I have had the 05 for 1 1/2 years but the dealer sweetened the pot a bit as they have someone interested in my truck already so should be picking up the Mega Cab tomorrow. Thanks again for all the replies.
11-15-2006, 12:53 PM
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I ran some numbers for you, and here's my conclusion:
You're giving away $3-5,000 dollars.
I will run you through the method I used and the assumptions I made.
METHOD
1. Calculate loan parameters for current vehicle
2. Calculate amortization schedule to see how much equity you have in your current truck at month 18
3. Calculate what kind of numbers it would take on the new vehicle price and trade value to match old payment
ASSUMPTIONS
1. You started out the loan on your original vehicle with a loan for $35,000 @ 5.9% interest for 60 months
2. You paid 18 months of payments
3. New loan is also @ 5.9% interest for 60 months
RESULTS OF ANALYSIS
1. At month 18, you owed $25,559 on your vehicle.
2. Your equity in the vehicle was $9441.
3. To keep the payments the same for the next 60 months with the same loan parameters, the balance has to be $35,000 - same as your original balance.
4. That means they just pay off your old truck and sell you the new truck for $35,000.
5. You lose whatever difference there was between the true market value of your old truck, and the equity listed in #2 of $9,441. I estimate that to be around $3-5,000 dollars, depending on the trade-in value of your truck. (I say $4K in depreciation for the first 18 months... the rest is you throwing money out the window.)
HOW THE DEALER HAS MADE MONEY ON YOU
1. They made money on your original trade for your current truck ($2,000-$7,000)
2. They made money on the negotiated price of your current truck ($1000-3,000)
3. They made money on BS administrative fees on the sale of your current truck ($250-$500)
4. They will make money on your current truck through resale ($3,000-$5,000)
5. They will make money on the sale of the new truck ($1000-$3000)
6. They will make money on the BS administrative fees for your new truck ($250-$500)
7. They may get a kickback from the finance company if they arranged the financing.
Overall, the dealer is stealing your $9441 in equity, giving you $3,000-$5,000 less than your trade is really worth, making money on the sale of the new truck, and living fat off the profit from your original trade and old truck.
How is giving the dealer all that money over 18 months a good deal?
You're giving away $3-5,000 dollars.
I will run you through the method I used and the assumptions I made.
METHOD
1. Calculate loan parameters for current vehicle
2. Calculate amortization schedule to see how much equity you have in your current truck at month 18
3. Calculate what kind of numbers it would take on the new vehicle price and trade value to match old payment
ASSUMPTIONS
1. You started out the loan on your original vehicle with a loan for $35,000 @ 5.9% interest for 60 months
2. You paid 18 months of payments
3. New loan is also @ 5.9% interest for 60 months
RESULTS OF ANALYSIS
1. At month 18, you owed $25,559 on your vehicle.
2. Your equity in the vehicle was $9441.
3. To keep the payments the same for the next 60 months with the same loan parameters, the balance has to be $35,000 - same as your original balance.
4. That means they just pay off your old truck and sell you the new truck for $35,000.
5. You lose whatever difference there was between the true market value of your old truck, and the equity listed in #2 of $9,441. I estimate that to be around $3-5,000 dollars, depending on the trade-in value of your truck. (I say $4K in depreciation for the first 18 months... the rest is you throwing money out the window.)
HOW THE DEALER HAS MADE MONEY ON YOU
1. They made money on your original trade for your current truck ($2,000-$7,000)
2. They made money on the negotiated price of your current truck ($1000-3,000)
3. They made money on BS administrative fees on the sale of your current truck ($250-$500)
4. They will make money on your current truck through resale ($3,000-$5,000)
5. They will make money on the sale of the new truck ($1000-$3000)
6. They will make money on the BS administrative fees for your new truck ($250-$500)
7. They may get a kickback from the finance company if they arranged the financing.
Overall, the dealer is stealing your $9441 in equity, giving you $3,000-$5,000 less than your trade is really worth, making money on the sale of the new truck, and living fat off the profit from your original trade and old truck.
How is giving the dealer all that money over 18 months a good deal?
11-15-2006, 01:05 PM
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To trade or not to trade
Went to the dealer for some service. They wanted my truck on trade for a 2007 6.7 cab and chassis. The farmers around here are begging for used Dodge diesel trucks. My 03 has 43900 on it. 
Not on your life will I trade it in. 
If I get ready to trade, I will sell it out right to the farmer myself.d
d
11-15-2006, 03:28 PM
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HOV thanks for the time you took to figure out the numbers as I did do a spreadsheet as well to look at it in a similar view.
The trade in they gave me is comparable to what Auto Trader had listed for 4 other similarily equipped Dodge's when factoring in the mileage and that was asking price for Auto Trader so I thought that was about fair. (Right or Wrong on my part) I got the 06 at employee pricing plus rebates as well as new 285/70/17 BFG AT's new Bully Dog Chip and Tint as well as my front receiver, intake, brake controller etc transferred from old truck.
The 05 needed new tires ($1200), brakes ($800), windshield ($300), front fender repair ($600) so figure escaped approx. $2900 worth of expenses in next 2 months as well as some additional maintenance around that 60,000 mile range.
I start the clock ticking on 60 months of payments but at 2.9% interest vs 3.9% on the 05 as well a new warranty and since I have had good service so far from this dealership that has a value to me as well.
Overall I can't change points 1-3 of how they made money on me that is in the past and today feel justified that I am being treated fairly on this trade now. I do certainly appreciate the time you have taken to give me some valuable advice and points to consider. Thanks again.
The trade in they gave me is comparable to what Auto Trader had listed for 4 other similarily equipped Dodge's when factoring in the mileage and that was asking price for Auto Trader so I thought that was about fair. (Right or Wrong on my part) I got the 06 at employee pricing plus rebates as well as new 285/70/17 BFG AT's new Bully Dog Chip and Tint as well as my front receiver, intake, brake controller etc transferred from old truck.
The 05 needed new tires ($1200), brakes ($800), windshield ($300), front fender repair ($600) so figure escaped approx. $2900 worth of expenses in next 2 months as well as some additional maintenance around that 60,000 mile range.
I start the clock ticking on 60 months of payments but at 2.9% interest vs 3.9% on the 05 as well a new warranty and since I have had good service so far from this dealership that has a value to me as well.
Overall I can't change points 1-3 of how they made money on me that is in the past and today feel justified that I am being treated fairly on this trade now. I do certainly appreciate the time you have taken to give me some valuable advice and points to consider. Thanks again.
11-15-2006, 03:43 PM
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Congradulations on the new truck.
Sounds like you made out O.K. to me. Trading off a truck is always a hard choice, but if they gave you a decent dollar, and you save the GST on the difference, sometimes it makes sense just to trade instead of trying to sell.
Sounds like you made out O.K. to me. Trading off a truck is always a hard choice, but if they gave you a decent dollar, and you save the GST on the difference, sometimes it makes sense just to trade instead of trying to sell.