As Jalopnik’s resident car buying expert and professional car shopper, I get emails. Lots of emails. I’ve decided to pick a few questions and try to help out. This week we are talking about low trade in values due to COVID19, the application of tax credits per brand, and will the impact the Bronco will have on Wrangler prices.
“So I have been thinking of purchasing a new car but when I went to take my 2012 Q7 TDI for a trade value, I was offered a fraction of what my car would be worth and a lot less than either KBB (15-16k) or NADA(15-16k) value a good trade-in value. Two local dealers both gave me a price of around 13k. Both stated it was due to the virus and low wholesale values and because it was a diesel gate buyback. However, there are variants of my car with less options and more miles going for 19-23k still. Is this really due to Coronavirus?”
While coronavirus has had an impact a negative impact on used car values, as more people come back to the market those values are starting to stabilize. However, what is important to understand in this case is the prices you are seeing online from KBB, NADA, and other websites are retail prices, most dealers offer trade-in values at wholesale values. Almost every business that buys and sells goods, purchases those items at wholesale and sells them at retail. Often those trade-in values from KBB or wherever is not reflective of the wholesale price, so if they tell you your car is $15,000 and the dealer wants to buy it for $13,000, that gap tracks with what normally happens. Your car is worth what people are willing to pay, if two dealers say they want to pay $13,000 you may be able to find another store or a private buyer willing to pay more.
“With the federal tax credits for EV vehicles does that credit pertain to a certain model or the brand in general? I have been eyeing up a 2020 Prius Prime and have yet to pull the trigger but I know the Rav4 Prime is coming out later this summer and it’s going to sell like hot cakes. So should I make a move on this Prius Prime before then or will the sales and credits for the Rav4 Prime not effect the available credit for the Prius Prime?”
The tax credits impact the brand, so as soon as the brand sells what I believe is over 200,000 EVs or plug-ins the tax credits will scale back. I still think Toyota has a ways to go before it hits that threshold because it only applies to plug-ins and EVs, not regular hybrids. It is likely the RAV4 Prime will still qualify for some substantial tax credit.
“Will the debut of the Ford Bronco affect the market for high demand suvs like Jeep Wranglers? As you can guess, my hope this drives down the prices of Wranglers.”
I don’t think the Bronco is going to impact prices on Wranglers. People are still going to want Wranglers, and while some folks may consider the Ford, the existence of the Bronco isn’t going to dramatically suppress the demand for the Jeep. Think about it this way, the demand for the Camry wouldn’t really impact the price on an Accord.
Got a car buying conundrum that you need some assistance with? Email me at firstname.lastname@example.org!