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hzuiel

KBB values plummeting?

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I'm curious if anyone else has noticed this about the fusion specifically, and I'm curious about real world trade in or private party sale experiences, but since buying my fusion it has absolutely plummeted in value on sites like kbb and nada.

 

I purchased the vehicle used at the end of 2015, 2015 model, approximately 1 year old with 5500 miles. It is a 2015 titanium model with extra options that bring the sticker price up to about $33,000. I haggled with the dealership, and even had a coworker of my father's that used to work at the dealership in question, call and try to get them down on price. They waived all fees except for the $875 for the certified ford vehicle program which includes an extension of the bumper to bumper and drive train warranties of 10,000 miles each. Including sales tax I paid about $24,000, and put $2000 down. I believe the financed amount was $22,230 for 66 months at 1.9% interest. I'm paying $365 dollars per month. Considering the price i got the vehicle at, I thought that was an aggressive enough payment to stay out of being upside down on the loan. I checked a few months later and was shocked to find the value had fallen to well below the remaining balance on the loan. I've kept checking periodically thinking that maybe the freefall in value will stop at some point, but it hasn't. It's a 2015 model and it is 2017, with the car's tradein value being listed on kbb at around 13500-14500, private party barely above that. Only 35,000 miles on it, and a little over 2 years old or so and it has lost like 40% of it's value just from when i bought it, and over half total.

 

This seems like insanity to me, does it ever plateau at some point?

 

 

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Demand for used cars is low. Cheap gas means everyone wants a truck, SUV or CUV. I don't blame them.

 

Just pay it off and don't worry about it.

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It seems more aggressive for the fusion in particular though, if you price out something comparable like a v6 camry of the same year and mileage with similar trim it's worth significantly more, about 2,000 dollars more.

 

Of course I can just keep paying on it, but that feels wildly restrictive on my life for quite a few years. If say my wife gets pregnant and I decide i need a van and not a car or something, I am like 3 grand upside down so I'll lose money on the trade and have to finance the other car for thousands more than it's worth, making the situation worse. If I lose my job and need to get a cheaper car, or just get rid of the car payment, i can't. The car probably won't be worth what i owe until some time in 2020 at this rate.

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You can't put less than 10% down and finance anything for 66 months and expect not to be upside down. You need to put at least 20% down and finance for no more than 48 months to be safe. If you can't afford to do that then you spent too much to begin with. Also don't forget that you paid retail but trade-in value is wholesale. You should be able to sell it yourself for more than that. And don't just go by kbb - check local listings on craigslist or autotrader or local classifieds to see what it's work in your area. Can make a significant difference.

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That's kind of the way it goes. You will get more features in a new car for the same money with the Ford vs the Toyota. However, the Camry will hold it's value better due to a reliability gap over the Ford.

 

Even buying a used car, it's easy to get upside down in the first couple of years if you buy one that's not beat up. A good used car commands a premium over the typical beat up crap that's for sale. However, book pricing assumes you bought one that's got curb rashed wheels, swirled paint, damaged bumpers and dried out rubber- since that's what 98% of the used cars out there for sale are like. If you finally manage to find the unicorn, the dealers know a good one when they see it and you have to pay more for it.

 

Cars are huge money pits no matter how you look at it, and buying new is for sure the quickest way to dig that pit deep. There are some upsides to buying new, and I've bought 2 vehicles new- but the last three I've bought have all been used. Let someone else take the $10k to $20K in depreciation for 30 to 50 thousand miles of usage.

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This is exactly the reason why I always buy used and negotiate hard on the sale price.

 

.. of course, it's also one of the reasons I tend to keep cars a while.

 

The one car I have bought new in my life - my 2014 Altima - I put $8000 down, and bought for $50 over invoice. The wife has hinted at wanting a new one, but I told her it's not going anywhere at least until it's paid off (60-months).. and most likely well after that.

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On a brand new car I would agree with the 20% and 48 months, when I do the math that seems to stay safely ahead of the depreciation of the vehicle, but considering the car had already dropped so much within a year of it's original purchase I figured it had taken the steepest chunk of it's depreciation already. Somebody bought it, for no less than probably $30,500 less than a year before i bought it for probably about 22750 before sales tax. I thought close to 8,000 dollars worth of depreciation was enough to stay ahead of the curve.

 

Also I didn't really get a chance to plan or save any money up, someone plowed into my car from behind and totaled it, so I was rushing to find something with only 2000 dollars leftover after paying off the loan on my last car and at the same time was lured in by the fusion's dashing good looks. Obviously hindsight is 20/20 but as I said the fusion also seems to be depreciating faster than other vehicles in it's price range and class even.

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Keep in mind that, even though the car might have had a sticker price of $33,000, after the original buyer negotiated, they might have gotten the dealer down to invoice, or even possibly a bit below invoice, which could have then brought the car down to around $30,000... then add in possible incentives, cashback, rebates, etc.. and the car is now down in the $27,000 range, give or take.. Suddenly, $22,000 used is only $5,000 off the original sale price (including rebates).

 

IMHO, odds are good that that car traded in for under $20,000, which is where you really need to start your baseline. If you paid $22,000 and put $2,000 down, add in tax, doc fees, etc.. , and you're already at least $1000, if not $2000, underwater on that car.

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We're not criticizing what you did, just pointing out that you can't really expect not to be upside down on any vehicle under those terms. That's why you buy gap insurance.

 

You're also going by some severely limited anecdotal evidence. There isn't much you can do at this point (other than get gap insurance if you don't have it).

 

Chances are it won't be an issue so I wouldn't worry too much about it.

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Posted (edited)

Fusion sales were off about 23% in June, year over year. When demand for new ones takes that kind of a hit, resale values plummet. There's substantial incentives for new Fusions right now. That's another factor. When the price of a new one gets closer to that of used ones, there's lower demand for the latter.

 

If it's any consolation, I just got back from a trip where I had a rented Camry for 3 days. What a POS. It can't compare to a Fusion WRT the driving experience. The steering was completely devoid of feel. It felt like a video game. There was so much dead travel in the brake pedal that I almost rear-ended the car in front of me the first time I had to stop. Fun-to-drive factor compared to Fusion=0. The interior was cheap plastic garbage as well. It's a car for people who hate driving. I couldn't wait to get out of it at the airport. Focus on the intangibles.

Edited by drolds1

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This is why your used price has fallen. You could have bought a brand new one for $24K.

 

post-174-0-02807000-1500928553_thumb.jpg

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This isn't news, but on trade-in value you'll always get killed. So unless it's a lemon, hang onto it for a while. Private party sales are much more beneficial. Honestly, drive it until the warranty runs out, then worry about it. If there was a baby in your future the Fusion will do just fine. As previously posted, Gap insurance can help, but then it's just another bill. Your auto insurance &/or loan company may have that option available. Call them to find out.

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Good news is if you drive the car until the wheels fall off resale value hardly matters.

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It's like falling stock prices - you don't lose any money unless you sell it.

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I agree with akirby, you haven't lost anything until you sell it. Also, are you happy with your car? If you love driving your car everyday, can you really put a price on that?

 

I know I am upside down on mine, but I got the car I wanted. It has all the options I wanted and I love getting on the road with it. So I don't worry about it.

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I think he's worried about being forced to sell it or totaling it (which is covered by gap insurance).

 

Your only options are to increase your payments and try to catch up or just deal with it if and when it happens. A few thousand difference isn't insurmountable.

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