An experienced car salesman once told a youngster just starting out in the business that he could “steal” virtually anyone’s trade-in. What did he mean by that? Look closely at the simple process of “trade difference,” and you’ll see. Since the dollar value of the trade difference is the product of new car price, minus trade-in value being offered for your old car, there are hundreds of ways for a dealer to reach the same value of trade difference, because the new car’s price and the used car’s value are mathematical variables.
(Find out the value of your trade-in now by using this site, or another like it.)
Competing dealerships trying to sell you essentially the same car – let’s say, the Chevrolet dealer in your town and two more dealerships 30 miles away in either direction – might reach identical trade difference values in very different ways. Perhaps your hometown dealership is offering you a $24,000 new vehicle at full sticker price, minus a $4,000 trade-in value, for a “trade difference” of $20,000. One of the other dealers is discounting their vehicle to $22,000, but only offering you $2,000 on your trade, for the same net “trade difference” of $20,000. And the third has discounted the new car considerably, all the way to $20,000, meaning they really are investing $0 in acquiring your preowned vehicle for resale on their used car lot.
Which is the best deal? … None of them is, and the third dealer, as the grizzled old salesman suggested, is “stealing” your trade.
There’s little reason you shouldn’t be able to get both the lowest cash price for the new car and a higher trade-in value on your old one But you have to stop talking to the dealer about “trade difference,” to clear up the negotiations.
A smart buyer deals with the two transactions separately. He negotiates a bottom-line price on the new car, regardless of whether his used car will be traded-in at all. If one dealership can discount that new car to $20,000, the others can come close to that price, as well, for a vehicle of the same model and features.
Either before or after discussing the new car price, the buyer works with a used car manager at the dealership to establish a cash value for the trade-in, bargaining for every dollar the customer can get.
It helps to know what your used car is worth before you ever walk onto the dealership floor. Use online resources such as this site, or a similar one, to get an online quote for the value of your used car. Then go to the dealership prepared to get at least that much for your trade-in, and ready to negotiate the price of the new car separately.
If you’re aggressive and successful in these negotiations, you might drive away with $24,000 new car for just $16,000 – the “trade difference” that remains after haggling down to the fully discounted price of the new car ($20,000 rock-bottom) and getting full market value for your trade ($4,000).
Tags: Car trade-in