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.
Send your queries to mehta@ttac.com
pay off the damn thing, no matter how much they may hate it. Now’s the time to reduce debt
Now, I know someone who did that and in 2 years they gave their local independent shop $8k to keep it on the road. How likely is that given it’s a Chrysler with a buyback title?
You have to at least entertain the idea that keeping it could be financially ruinous.
Quite possible. I’d be more inclined to agree if the vehicle wasn’t already 4 years old, but we need to know more about its service/buyback history. If it was a BMW X5 in the same scenario, I’d agree wholeheartedly.
A Chrysler product, not so much. They may be junk, but they are usually cheap to set right.
Has our “caller” tried running an “Auto Check” instead of a CarFax on the vehicle in question? I’ve found Auto Check reports to be more detailed, which is both good and bad.
“They may be junk, but they are usually cheap to set right.”
I’ve heard that conventional wisdom – it would be interesting to see a TTAC post that compared the cost of repairs on similar priced vehicles. Say a new AC compressor in a SRX vs an X5. Or a new water pump in a Camry vs. a Malibu.
I do remember that the parts for my 1987 Oldsmobile were cheaper than the parts for my 1997 Mazda-engineered Ford Escort. But then the Olds had a 307V8 that had been in production since the late 70s.
$8k in 2 years is an extreme outlier, most car maintenance will be less.
Park it and rent it out to a homeless unemployed person for a place to sleep at night.
Keep it on private property so no insurance cost overhead.
Be selective as to the renter to avoid damage.
Proximity to fast-food joint dumpsters should increase rent received.
Let the growing economic turmoil work for YOU!!!!!!!
“a buyback note on the title”
What is that?
Robert,
It’s like a salvage title. There is note on the title indicating that the car was bought back under tsome provision of the lemon law.
Thank You.
brutal depreciation on a Jeep. What was it new like $40k? In 4 years, that’s 65% depreciation at 14k resales, ouch
Is that MSRP or actual transaction price? I doubt anyone ever paid sticker on a sales stinker like the Commander.
Thanks Sajeev Mehta for the response.
I do have an update as I ran into my friend this past weekend.
He went back to the orginal dealer where he bought the Commander (used not new, woo). And the orginal dealer agreed to give him right around KBB for the car. There must have been some shady stuff going on at that dealer if he so quickly offered cash for the truck.
My orginal advice to him, (and he was leaning this way if not for the dealer buying it back), was craiglist or ebay. Because any amount over 8grand that carmax was offering would be better.
The title on the car has a lemon note on it. I forgot the reason for it, but the commaders had some issue or another that kept comming back, and the orginal owner had it lemon lawed. My friend never had any issues with the truck.
Getting more than 8k is not too shabby, so if they pulled the trigger on that deal, try to get them to not be upside down in their next car. That kind of debt (i.e. not school loans or a mortgage) is a terrible thing to have in this economy, especially for something as fun-sucking as a crappy car.
Why does he want to get rid of the Commander?
Sajeev & Dan,
So, just as a test I looked at the price of an AC compressor for a 2000 Sebring and a 2000 Camry. The Camry was $248 and the Sebring was $405.
Obviously that’s just one data point….but…as always I sometimes question the conventional wisdom.
Conventional wisdom should be questioned…always.
Toyota parts will usually be cheap, because so many of their products use the same parts (exterior door handles, for one) and they sell so many of them.
Just a guess, but cross shopping Lexus LX/Land Cruiser parts to a Jeep Commander might show the opposite.
I think to some degree the assumption is that the Domestic will be cheaper to fix as there should be a healthy supply of cheap parts from the pick-and-pull to swap out. I think as time goes on this is becoming less and less true, especially when the model you’re trying to keep on the road may not have sold in numbers sufficient to build up that healthy ecosystem of junk parts.
Right, that’s why some people still buy GM and Ford vehicles with certain engine/transmission combos cause they know the supply of used and re-manufactured parts is nearly limitless. (3800V6+4speed FWD auto & Ford 3.0V6 I’m looking at you.)
Not that this is a bad thing, but it is where the conventional wisdom comes from. If I buy a 1970s GM product with a Chevy 350 and a TH350 or TH400 I’m not going to sweat finding mechanical parts.
“but cross shopping Lexus LX/Land Cruiser parts to a Jeep Commander ”
Yes, but a LX/Land Cruiser is almost 2x the price of a Commander. Obviously, one would expect a new rear diff on a Range Rover or shocks for an S-Class shocks to cost more than a rear diff on a RAV4 or shocks on a Sonata. But, for a given class of vehicle are parts for a RX350 or MDX more expensive than parts for a Enclave or SRX?
Absolutely. I just picked Toyota/Chrysler products with similar engine/size/performance constraints. Or perhaps a V8 4Runner instead, but it doesn’t have a third row.
I’d be pretty surprised if any modern FWD vehicle from Japan has significantly more expensive moving parts than their Detroit counterpart. Maybe Mitsubishis and Nissans, but maybe not.
I dunno, I thought it was the opposite: Mitsu was damn cheap. I had a money pit 96 Galant. On that, a set of remanufactured driveshafts was $100. When I had a boot leak, my mechanic said it would be more expensive to take the boot off, repack the CV, and put the boot back than to install a new half-axle (at $80/hr labor rates in California). So we did. Then, I had a rear wheel bearing replaced for something like $120+labor (new OEM part). What really was expensive on it, was a transmission failure. That hurt to the tune of $3k all told, new solenoids and ring gear.
The Commander shares the same parts pin with the 05-10 Grand Cherokee, so most stuff should be available at the wreckers yard. For a real parts bin special get a 99-04 Grand.
Dan and Sajeev,
So, I just checked fuel pumps for a 2000 Sebring and a 2000 Camry. Sebring is $51.16 and the Camry is $52.65.
Common cars all seem to be around the same price for common parts.
Now, I know someone who did that and in 2 years they gave their local independent shop $8k to keep it on the road.
By keeping my car for the last 5 years after payoff, I’ve saved $28,800 in car payments. Count in maybe <$2000 in non-regular maintenance issues, and I'm still way the hell ahead of the game. I can't imagine someone who wouldn't be.
Dave,
After 28k in car payments your vehicle would be worth $0?
Option A – You sell your car for 8k to pay off the note. You buy a new Civic for 16k – after 3 years you have a 3 yo Civic worth $12.5.
Option B – You continue to pay 8k for the Jeep and spend another 8k to keep it on the road. You spend 16k and have a 7yo jeep worth 7k.
Option A – you spend 16k and have 12.5 left over.
Option B – You spend 16k and have 7k left over.
Seems option A is better.
jmo- I think Dave M is saying that his current car cost him $28800 over 5 years. If he doesn’t buy a new car for another 5 years (10 years total) and his maintenance costs are under $2000 like he wrote he would save considerably over buying a new car after 5 years.
The other variable here is miles driven. The Civic looks a lot better when you have a long commute.
I think there’s something that’s not completely clear from Michal’s post, and that is who owned the car when it received the buyback title. If Michal owned the car when it received the buyback title, then in theory, he/she got the fruits of the buyback – either the insurance check for the loss or a manufacturer cash offer in a lemon-law case. If Michal did not own the car, then the brand should have already been included when Michel purchased the vehicle, and the vehicle should have been low-priced accordingly. If Michel received a vehicle that should have had a buy-back title but didn’t, then it’s time to see a consumer lawyer. You can find one through the National Association of Consumer Advocates at http://www.naca.net.
Note: if the dealer failed to disclose a buy-back title, and if the dealer helped arrange the financing, then the consumer might have a defense against the finance company under the FTC Holder Rule. That’s something to talk to a consumer lawyer about.
IMHO, my friend got very lucky with this car. He was told about the title issues as he was signing the note. IMHO thats shady, and I would have walked away.
I think that if he would have known about title issues from the start the price he paid would have been drastically lower. (as he found out when they planned to get rid of the commander).
The dealer he bought the car from, must have sensed trouble, and like I posted before, bought the commander back as if it had a clean title. It seems like this one dealer sells alot of these ‘lemon’ cars, and rarely gets caught because he does everything to the ‘letter’ of the law, but traps people in, gets them excited about the purchase, then when they hook, line and sinker sold on the car, springs them the ‘bad’ news.
Overall, my friend was out a few hunderd bucks between what he owed, vs what he got from the shady dealer.
It could have been a very expensive lesson otherwise.
I did want to say something about CarMax. I found their written offer to be very useful when I was trading my 2003 Honda. I used it to goose another $500 out of the dealer.
Note: I meant $500, not Five Thousand.
A buyback is a branded title, period. It is exactly the same (e.g. as bad) as a salvage title, or in some states an indication of flood damage or other similar indicators. The states put this on the title as a giant red flag to prospective buyers. Saying it has “a lemon note” is exactly the same thing. In all professional and legal circles the correct term is “branded title,” end of story.
There are NO reference sources, whether it’s MMR or public stuff like Edmunds, that can or will give you any clue about what a branded title vehicle is worth, because most people won’t touch them, and because there are only a few types of title “marks” and a wide array of possible root causes. Everybody who has a branded title vehicle will swear that their specific vehicle is the one-in-a-million special case that isn’t actually a big problem. Apply the “too good to be true” rule.
There are dealers which specialize in these vehicles (because they go for dirt cheap at auction, and they’re often bought back while fairly new, giving them lots of awesome-looking Benzes and Audis for the front row of their lot), and in my opinion they should be regarded with healthy skepticism. They will always have a reassuring story about how the buyback was just the dealer’s trick to help a good customer cope with his crabby wife’s shifting preferences, or some similar innocent-sounding excuse. But the fact is that a buyback is always a serious decision of last resort for the manufacturer. They hate them, and with good reason, and that reason is because they have near-zero resale value.
By the way, when anyone lists a branded title vehicle for sale, whether it’s through Craigslist or anything else, the seller is required by law to disclose that it’s a branded title. Failure to disclose a branded title is a serious offense.
I bought an 02 Suburban buyback with an 8100. The original engine apparently burned oil like crazy and the replacement was even worse. They put a second engine in it. I’ve put over 100k on this vehicle and it’s been flawless engine wise. The large amount of savings made it well worth while.
that jeep will end up in a container headed for a south american country before long. They don’t care if it even has a title, just 4wd that works.
Jeeps are also popular in Russia as are good in bad weather and hold up well to their awful roads.
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.