I get it they are trying to get rid of the "dealer use" car but why would anyone consider this unless they broke completely even.
They make money this way by 1) selling you the new car and reaping the dealer holdback and 2) buying your used car for less than you'd otherwise get and re-selling it for a profit. A win-win for them.
These are just sales promotions: These are not Toyota specific or to get rid of any particular year. Some dealers send these out to everybody -- at two years on leases and three on finances
I have received these kind of "need-your-used-car" notices from every dealer that I have had business with. Standard operating procedure. In the case of thee OP, I would say he did OK. He got an upgrade of a P II(2) to a P III(3) with less mileage. As to the "extended service" warranty, what is that? Is that the vehicle warranty or thee extended service agreement (oil changes, etc.)? I would call Toyota directly and talk it over with them.
So essentially to trade the cost was about 11.5 cents per mile (34000 miles difference between the two and $3885). That seems pretty darned good to me when you consider that when looking at the US Government allowance for business use of cars they calculate depreciation alone at 23 cents per mile. I know that is a bit of comparing apples to oranges, but as a quick smell test it leads me to believe that you made a good decision.
True True Another way to put it is lose-lose for the customer. The largest depreciation of the car happens the first year of ownership. The consumer eats this depreciation twice when buying the 1st new car, selling it after a year then buying another new car. The dealer makes a lot of profit selling the first car and selling the new car.
