Recently I've been deluged with offers to trade in my 2012 v for a 2014 with O downpayment, but paying $25 more per month for 60 months (3.9% financing). In other words, I add two more years plus $1500 to get a car with two years of service and two years younger. Any advice?
I would wait for the 2015s at least, since they are making a model update. You did not say what your current payment is but most people would end up paying more than $10,000 extra for those two more years of payments. You get a new car, you get a new warranty period, but functionally you get the same car. If you still have the option I would extend my factory warranty for two more years and save at least $9,000.
What trim do you have, and what trim are you looking at buying? Without knowing that two, I would say there is no reason at all to trade in your current v for the same model with 42k less miles and extend your payments by two years.
Its unlikely the v will be updated in 2015, just the hatchback. I expect the v will get a redesign in 2016 or even later, but you might see hybrid system updates in the mean time. I'd expect you to come out better by waiting for the next 0% financing offer and sell your 2012 privately, then negotiate a better price on a new one. Bottom line: no deal that the dealer offers will be beneficial to you.
2012 v2 for a 2014 v2 will net you day time running lights, but everything else the same. I would not do it. After only 2 years, you likely still have no equity with a 60 mo loan, plus they want you pay more. Do you need to come out of pocket the $1,500? IMO definitely no.
They don't really want your existing car. They make their money on the transactions, and are just trying to generate more transactions. They are fishing for people who do, or can be induced to, trade cars frequently. My first Prius is still bringing tradein offers two years after it was swapped away. My previous Honda pulled in a few such offers until it was about 15 years old. Next up will be notices that your warranty is expiring soon, or may have already expired. These are often more generic, showing no indication of what car you may have, or that its warranty may have expired more than a decade ago. Ignore them. Do any trading on your own schedule, not their schedule.
The reason the dealer wants to the do the trade is because they make more money with clean trade-in's than on new cars. Not that they don't make anything on new cars, but margins on used cars are much higher. If you are intent on upgrading, try selling it yourself so you'll net more out of your current car. Edmunds states for my area a 2012 Prius v2 with 42k miles, in "clean" condition, is about $18,900 for private party sale, $17,400 for trade-in, and $21,500 for dealer certified. I think at most if you trade in, the dealer will detail the car and throw some new tires on it, leaving them with a potential profit of over $3,000. If you're good at negotiating and know what your car is worth and how much you can buy the 2014 v2 for, the dealer may net about $200-$300 on the sale. So a total profit over $3,200 for you to come in and "upgrade" is very profitable for the dealer. I'm all for dealers making profits - they're entitled to it like anyone else. Just know if you do this, what their motive is and how much they stand to make. If you sell yourself, you can capture some of that profit for your own benefit. I still think it's not worth doing.
You also net zero-time ToyotaCare service and warranty on the 2014. On an approaching three-year old 2012, you are out the ToyotaCare and soon will be out the 36 month warranty.
The dealer may try to use "you're out of warranty" line, but that's no reason to trade up to a new model. The OP is already past the 3 yr/36k mile warranty at 42k miles. $1,500 out of pocket and $25/mo will buy tires and maintenance for a long time to come. Now if he wants to trade up to get additional features - that's another story, but to go from a 2012 v2 to a 2014 v2, you're only gaining more $'s out of pocket and a higher payment. Doesn't make sense.
Reading comprehension.... BIG difference: "Recently I've been deluged with offers to trade in my 2012 v for a 2014 with O downpayment, but paying $25 more per month for 60 months (3.9% financing). In other words, I add two more years plus $1500 to get a car with two years of service and two years younger."
It wasn't that clear if the $1500 was upfront or cumulative of the $25 per mo in the original post - thanks for clarifying. I saw the $o down but assumed taxes, tags and fees. If to get a new car is only based on monthly payment, then it's not a big deal. That's why many people like to lease and get a new car every few years. But if it's based on the whole financial transaction, it's still not a good idea since it's not just $25 per month, but 24 months of additional payments. At 2 yrs into a 5 yr loan, you're just starting to make a sizable dent in the loan amount and yet likely not in an equity position. If the trade-up is based on an emotional desire to have a new car, all the numbers in the world won't mean anything. But if serious consideration is given to the entire transaction, it really doesn't make sense.
A car depreciates the most in the first few years, after that it slows down. You have a car that will run 200k miles, most likely trouble free. Generally, the cheapest car to run is the one you keep for a long time. Now why would you want to trade a car that is 40% paid off? Especially for one that looks the same and runs the same. I don't see any compelling improvements. In 3 years you can have no payments and still have a car that looks nice and runs well and should be generally dead on reliable for still another 5 years after that during which you are saving to buy the next car but with cash for a down payment enough to make the payments smaller or shorter..
