[bryanlarsen]

From what I understand, a car dealer makes the bulk of its profit from its maintenance department. Most of the time they make very little profit from your used car, it's usually just resold to a wholesaler. The dealer is usually only interested in reselling relatively new cars of the same make. The biggest reason they take trade-ins is because it makes it easier to make a sale and it makes it easier to play with the numbers.

So yes, you shouldn't sell to a dealer, but if you don't know why you can be conned when you're surprised by how much they actually offer for your trade-in.

A BMW 3-series costs about twice as much new as a Camry, so that seems like equivalent depreciation to me.

[sixQuarks]

Used cars are actually a huge profit center for dealers. They will wholesale older cars that they can't sell on their lots, but for a good late-model used car, they can easily make a few thousand dollars profit.

[sliverstorm]

I don't know if anything is a huge profit center for dealers these days.

I mean, they will certainly have big revenue centers, but their business model is like a snake's eating habits- big meals occasionally.

[stouset]

Sorry, but bleeding out $7,000 a year instead of $3,500 a year is still an extra $3,500 a year, regardless of how much you paid for the damn thing.

[sliverstorm]

Are you arguing that dollar value of depreciation is more important than rate?

[stouset]

When comparing two alternatives? Absolutely.

Let me ask you: would you rather have owned one share of ENE (Enron) before the collapse, or ten thousand shares of MSFT in 1999?