Piston Slap: Going Commander, Losing Your Shirt
Michal writes:
Normally I can find answers for my friends, however this one has me baffled and Google is no help, maybe Piston Slap can help.
My friend is selling/getting rid of a 2006 Jeep Commander, 4.7L, towing package and ~43k miles. Normally a fairly easy thing to price, however the thing has a buyback note on the title, because of some issue or another, he says it was something to do with a starter, but given that info was probably from a dealer, I take it with a huge grain of salt.
Using the normal ‘quoting’ sources (Edmunds/KBB/etc) a clean title car is in the 14k price range. However this has that buyback/lemon not on it, and I have not found any guidelines as to how to price it. (just advice as to how to avoid getting one) He was given a CarMax quote of 8k. But that’s not enough to cover the note. I told him to be honest & put it up on Craiglist & eBay to see what happens, anything over 8k is extra money in the pocket. But after doing some research that really didn’t pan out, I’m not so sure the 8k was a bad offer.
Sajeev Answers:
Though I believe CarMax has a place in our society, I don’t enjoy their modus operandi: low ball offers when there’s blood in the water. And I suspect that, if the owner is upside down on the note and the note in my inbox uses words like “dump,” “getting rid of” and “buyback.”
Then again, can’t blame CarMax for avoiding risky transactions, unless their offer came at gunpoint. I say this with a modicum of confidence thanks to my friendship with Mr. Steven Lang, my partner in crime with the “New or Used” series. I took a peek at the MMR values for comparable Jeep Commanders. And the actual auction prices in the lowest condition ranges from a high/med/low of $9700/8000/6225. Odds are a buyback vehicle, no matter what the condition, is gonna be a low-grade turd at auction. And don’t even think about selling this vehicle whenever gas prices spike.
So your advice to your friend is reasonable: put it on Craigslist, be honest, and sell it for more than 8 large. But what’s the wiser move?
Tough love, homie: pay off the damn thing, no matter how much they may hate it. Now’s the time to reduce debt, buy something else when Commanders are so old that a buyback concern fails to stand the test of time. Think fully depreciated, a la 1990s Ford Explorer: who’s gonna ask for a CarFax on a vehicle that’s only worth something when the government comes up with Cash for Clunkers incentives? This, even if your friend begs to differ, is the only win-win situation.
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Was the buy-back nature of this vehicle disclosed to the current owner when they bought it? A mark like that on the title undermines the value of the vehicle and, in most states at least, has to be disclosed to the buyer. Ah, I now read all the comments. I should do that before posting. The friend is lucky the dealer was willing to help sweep that problem back under the rug. Of course, said dealer is going to turn around and sell the Commanded at a $2k-$4k profit and once again will disclose the title problem at the very last moment!
Re: the question of how to determine potential value, my past two credit unions would issue loans for prior salvage branded vehicles for 80% of the unbranded vehicle. I dabble in prior salvage cars, it is always a fun ride. Never(ever ever!) pay good money for them, no one else will.