When I bought my '05 Civic Hybrid last April, I just showed up at the dealership and picked one out. There were only two to choose from, of course, but at least they were in stock. Today, I went to a local dealer to see about test driving an '06, because I'm also considering a Prius. The sales manager basically said fat chance... There's a waiting list through March.

What the hell. "Put me on the list for April, then," I told him. I've already made arrangements to sell my '05 to a coworker in April, so the timing is perfect. Good thing I went in today rather than waiting until April.

The sales manager suggested that rather than selling my '05 directly to my coworker, that I trade it in, and bring the buyer with me when I pick up my '06. That way, I will only pay sales tax on the difference between the cost of the '06 and my selling price of the '05. I will save around ~1,100 to ~1,200 depending on my asking price. He also said that since my coworker and I use the same credit union, and that credit union is one of the dealership has a relationship with, that this trade-in thing was a no-brainer and would actually be simpler for all parties involved, since the dealership would handle all the paperwork and title stuff. What do y'all think? Does that sound like the way to go?

 

Yeah, if the dealer agrees to sell it to your coworker for the same amount he gives you for the tradein, and the price is set by you and your coworker.

 

One thing I would worry about is added costs to the coworker or yourself for the paper work. They may sell the car at the price you agreed to but then charge extra fees for "handling the no-brainer" paperwork.

 

He said it's $100 for the paperwork voodoo. Seems worth it, considering it saves me over $1K in taxes.

 

Actually, another question occurred to me. I know I will get the '06 federal tax credit for my purchase of a new hybrid. I wonder if my coworker will be eligible for the same tax credit for purchasing a used hybrid. My guess would be that the tax credit only applies to purchases of new cars.

 

I think it only applies to the first purchaser of a hybrid so used cars don't get it.

 

Would also depend on what value they give your trade versus what you would sell it to your friend. The dealer will only give you wholesale value. You can sell it to your friend for retail. Odds are there may be 2k difference in those two prices. So you could have 2K more to put down on the car. What they're telling you about the tax is true, but you may put more $ in your pocket by selling the car to your friend. One thing guaranteed - a dealer will not give you what you want for your 05, and I doubt they'd commit to a price now. Also, your friend will likely pay a higher price for the 05 than you may sell it to them for. They may not want it for what the dealer will offer it to them for.

You can give the dealer a chance, but I'd run the numbers both ways. You may want to pull the plug on that and do the deal yourself. Yeah, it would actually be easier to do it through the dealer - that $100 for paperwork would actually be worth it on a transaction like that. I'm always suspicious of car dealers (having sold cars before) - they may make it sound like everyone is going to win, but in the end they'll do what's in their best interest. If it sounds to good to be true, that ought to be a huge red flag. Car dealers are not known for random acts of generocity.

One more add: You may already know this so I apologize if you do. Car dealers will burry all kind of profit in your deal when you focus on payments - I only mention it because the dealer emphasized dealing with the same lender. You go in wanting X payment, and your friend Y payement, you'll both taken. Very important to focus on sales prices first, and bring a calculator that can compute loan payments to make sure they're telling you the truth.

 

This sort of in-out deal is fairly common in car dealerships.The dealer will sell it for what you are selling it for-you will get the full sales tax break.
Tim-dealers aren't constrained to give just wholesale prices on trade ins.They commonly give folks more than wholesale.Of course,they make it up by charging full MSRP,or on the financing.They know there are folks out there that are so bent on not getting cheated on the trade in,that they ignore everything else.
If your dealer will do this for $100 doc fees-it is a great deal.Luck,Charlie
PS I have been on both ends of in-outs.Absolutely the only downside is on the used car buyers side-the doc fees are usually more-maybe $50-$100 more than the local Title transfer places will charge.If the used buyer has no objection,go for it(you could make up the difference if he does)

 

I am trying to sell my 05 also. What is your asking price, so know what i can expect? Also, how many miles are on yours?

 

Since I'm selling to good friends, both coworkers (a mother-daughter pair), I'm being generous and not asking anywhere near blue book. If I were to sell it to an unknow 3rd pary, I might ask $21,000, which includes the transfer of the 7 year extended warranty that cost me nearly $1,400.

The car will have just over 10k miles on it when we do the deal in April.