Originally Posted by Splurg
so in other words if im understanding you correctly ....your saying that selling to a place like car max will always pay you more than the dealers would on a trade in?
Not quite; there's no such thing as "always." As JR pointed out, there are any number of players in the used car market. CarMax and your local Lexus dealer are just two of them. My point was that, ALL ELSE BEING EQUAL, the trade-in dealer generally has a tax advantage over other used car buyers. As JR showed however, real world experience in different business conditions can have a huge effect on prices offered for used cars by both trade-in dealers and other potential buyers.
Any used car dealer may be overextended in general inventory and thus may not be able to offer a decent price AT THE MOMENT. Lexus dealers are particularly vulnerable to having too may, say, LS models on hand due to trade-ins they were "forced" to accept from price-unconscious buyers or lease returns. On the other hand, some dealers know they can flip a given vehicle in no time, so they are willing to pay top dollar for it. Some even use a high-end model as a draw to their lots so they can sell higher profit, lower priced vehicles.
The fundamental reality is that markets are ever-changing, complicated networks of many individual estimates of value. That said, there ARE some structural factors that generally lead to predictable pricing differentials. I was simply attempting to point out one of these. Good luck with your LS transaction.