You’ve driven your old car down to the dealership in hopes of trading up to a new one.
Hopefully you’ve prepared the car well – washing and detailing it, and fixing minor problems that could turn off an appraiser and cause him to lower the car’s value. And hopefully you’ve prepared yourself for the experience by determining your used car’s worth in its current condition, so you know what trade-in value is fair to expect.
Now it’s time to negotiate the most for your trade.
Most dealerships are going to prefer working your trade-in and new car purchase as one deal, with a resulting value known as the “trade difference.” Step 1 to getting the most for your trade-in is to separate these transactions, because they are not one and the same.
Reaching a fair trade-in value for your used car must be kept independent of the price of the new car, so that you can accurately determine what you’re really being offered for your trade-in. You might already have negotiated the price of the new car, or that negotiation might follow the trade-in talks, but you don’t want to deal with these two values at the same time. It just confuses matters for you, to the advantage of the dealer.
The trade-in negotiation will begin with an evaluation of your car by the used vehicle sales manager at the dealership. He will check for functionality of lights, horn and signals. He’ll probably take the car for a very short drive to see if it has readily apparent power, ride or handling problems. And he’ll look at the car’s paint and body lines to see if there are telltale signs of a prior accident. Then, he will refer to a publication – usually the NADA guide, Kelly Blue Book or the “Black Book” to nail down his initial offer.
Your job is to know all of these values prior to driving into the dealership. If you have pre-assessed your own car – its mileage, features, condition, etc. – and compared that to these sources before you visit the new car store, then you should have a very good idea of what the sales manager is about to offer you. Have those figures (from each book and from online resources) written down and in your pocket or purse for quick reference.
If the sales manager makes you an offer that is right in line with these figures, congratulations, maybe this negotiation won’t be that difficult after all. You probably can’t expect to get more than Blue Book trade-in value for your car, so if the dealership has made an offer equal or very close to that, and if you’re comfortable with the price of the new car, don’t feel like you have to fight the dealer for more money on your trade-in.
However, if they “lowball” the trade, stand your ground. You’ve done your research. You know what your old car is worth, and if you can’t get that price here, you can probably get it somewhere else.
There’s no need to be rude, but tell the sales manager that you’ve studied the value of your trade-in, and you won’t be trading this car today if you don’t get that fair market value.
It usually doesn’t feel like it, because buyers are much more uncomfortable with the process than sellers. But in this game, you hold all the good cards – you have both the money being spent for the new car (either in cash or probably via loan) and you have the used car that the dealer might be able to resell at an additional profit. If you are uncomfortable with any aspect of the transaction, then it’s no sale. Tell the used car manager in no uncertain terms that you’re willing to shop around at different dealerships until you get the deal you want; not only a good price for the new car , but fair market value for your trade.
The sales manager might give you numerous reasons why the car isn’t worth what you want for it. From his perspective – maybe he has too many SUVs already, or in his neighborhood Saabs are hard to sell – he might even be right. Be willing to listen. But that doesn’t mean you need to let him have the car for what he wants to pay for it, especially if you’ve used these sites to do your homework and know the full value.
Be prepared to take that used car home and drive it a few more weeks or months, if need be. Or to buy the new car without a trade-in and sell the used one yourself – it’s usually worth more in a private sale than it is in trade, anyway, although there’s some hassle involved in selling.
You should never feel like the dealer has you “over a barrel.” You can always drive away in the car you drove in with, and with your new car-buying money safely tucked in your pocket.
And that’s negotiating power.
Tags: Car trade-in