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I never trade in a car to a dealership -- ever. That is just introducing a variable into the equation that the dealership can exploit. It is a no-win situation for the individual looking to buy a new car.
The best you can possibly do is sell it yourself to an individual (e.g., Craig's list). I would imagine selling it to Carmax would be a better option than trading it in to the dealership. I don't know for sure. But I do know not to trade it in to the dealership. Yes, trading it in to the dealership is convenient -- that is why people do it -- but it is also costly to you. YMMV.
Well, it's just two sock puppets in the dark here, but I suspect most of your transactions would show... points that could have been improved in your favor, no matter how good a deal you are convinced you got.
One of the things the system fosters is the idea that Joe Q. Carbuyer can walk in and wrassle that alligator for the win... which is hilariously nonsensical. Most people buy a car no more often than every two or three years; these guys sell a dozen, fifty, a hundred a day. Every single factor is loaded in their favor, and when someone walks in armed with the latest Consumer Reports "How to buy a car" article in hand, they have layers and layers of backup tactics to deal with them.
You have a better chance of stepping into a back-alley craps game and being allowed to walk away with any winnings. That Freddy Friendly lets you 'win' a few small rounds doesn't mean you didn't get cleaned out.
The entire dealership system needs Congressional-level examination, review and overhaul, but in an era when the CFPB has been gutted on their landmark credit card and loan sharking protections, it ain't gonna happen.
Go to a reputable auto broker when you need a new or CPO car.
Or find the loss leader advertised... have done this several times and sometimes it meant first finding the car on the lot and asking is this one is available and then saying OK I take it... then they start writing it up and I say there is a mistake... pull out the ad and said this is the price and I am paying cash...
Often it creates a stir but I also have in my pocket a complaint form from the County District Attorney on False Advertising and Bait and Switch that I start filling out asking for their Salesman License numbers... etc.
As far as leaving something on the table... of course this is always a possibility but the buyer needs to decide when a deal is good enough...
The father of my high school friend was buying a new Porsche for cash... they spent most of the day haggling price... never did make the deal... the Dad said at this price you have a buyer... anymore you do not.
I never trade in a car to a dealership -- ever. That is just introducing a variable into the equation that the dealership can exploit. It is a no-win situation for the individual looking to buy a new car.
The best you can possibly do is sell it yourself to an individual (e.g., Craig's list). I would imagine selling it to Carmax would be a better option than trading it in to the dealership. I don't know for sure. But I do know not to trade it in to the dealership. Yes, trading it in to the dealership is convenient -- that is why people do it -- but it is also costly to you. YMMV.
It is convenient but it works both ways. If the dealership would have given you say $15,000 for the trade in but you were only able to sell it for say $14,500 after having is for sale for a few weeks. You have lost $500 plus the sales tax reduction on the trade in. What I did was get a price for the trade in and found a buyer for that amount. Went to the dealership with the buyer and did a courtesy trade in meaning the dealership takes the car on a trade in and sells it to your buyer for the same amount of trade in. The trade in is deducted from the amount of the cost of the new vehicle and you save the sales tax on the amount of the trade in.
It is convenient but it works both ways. If the dealership would have given you say $15,000 for the trade in but you were only able to sell it for say $14,500 after having is for sale for a few weeks. You have lost $500 plus the sales tax reduction on the trade in. What I did was get a price for the trade in and found a buyer for that amount. Went to the dealership with the buyer and did a courtesy trade in meaning the dealership takes the car on a trade in and sells it to your buyer for the same amount of trade in. The trade in is deducted from the amount of the cost of the new vehicle and you save the sales tax on the amount of the trade in.
But how do you know that you couldn't have sold it for more than what the dealership was offering you? My assumption reflects the point made in the video -- the dealer will low ball you on the trade-in, refuse to budge on the price of the new car, and then high ball you on the cost of the loan.
However that may be, I do like your plan of saving on the sales tax on the amount of the trade-in. Good point.
Well, we've never traded in a car and we pay cash for every new car we ever bought. We've also shopped multiple dealers and pitted them against each other until we were satisfied that we got the best possible deal. We bought a new Forester last year and we both liked it over the Rav 4 which was cheaper. I talked up the Toyota and the dealer came out with a Forester with a lot more extras than the basic model they were trying to sell us for the same price. I wasn't convinced and they lowered the price and came pretty close to matching the Rav 4. I then called another Subaru dealer and asked if they could do better on the price and they said no. We wrote a check and drove home with the Forester that day. We had a pick up and sold it on Craigs List before we went shopping for the Forester. That truck was an 04 and we still got more than what we would have on a trade in. We paid 15,000 for the truck new and sold it for around 5 grand. I think we paid 21 grand for the Forester. That meant we had to come up with around 16 grand to pay cash for the Forester after selling the truck. No problem. That's pretty close to the money we paid for the pick up new in 04. We haven't had a car payment for over 30 years and never will.
I worked at a dealer that used the 4 square and it was easy to understand buyers objections, the car is too much, not enough for the trade, my payment is too much etc...
The bottom line is to cut through all the garbage and tactics that dealers use and concentrate on the bottom line of how much they are giving you for your trade, how much the new car is being discounted and how much it is all going to cost me per month and for how long.
It is a pretty easy concept and fun to negotiate but don't lose sight of the bottom line.
But how do you know that you couldn't have sold it for more than what the dealership was offering you?
You look on NADA or many other sites that tell you the high-low for your specific car in your area...good ones have you list all oprions and mileage. Unless you can offer financing the dealer will almost always be able to sell your car for more than you can...unless you get lucky.
Quote:
Originally Posted by townshend
My assumption reflects the point made in the video -- the dealer will low ball you on the trade-in,
The dealers know you have access to all the info they do...they no longer try to anger you...most anyway. The dealer offered me exactly what I thought they would, based on my research.
Quote:
Originally Posted by townshend
refuse to budge on the price of the new car,
With absolutely no hassle, I started with invoice, took a percentage off for going through COSTCO to order the car, then they gave me all applicable rebates. Dealers all make about the same for each new car...their big money is in the used cars and financing.
Quote:
Originally Posted by townshend
and then high ball you on the cost of the loan.
Not if you only do 0%! For me that meant 36 payments...no problem. When you use their money expect it to cost you...you may qualify for 3% but they'll offer you 4.5%...that means more money for them. Either go to your bank and get a loan or get the 0%.
Too many of you are making this more complicated than it needs to be...this isn't the 70's...
Too many of you think that businesses shouldn't make a profit...they need to.
You just need to be smart, prepared and have YOUR finances in a position where they are at your mercy and not you at theirs...that means being fully able to afford what you go in there for. The riskier you are as a buyer the more they're going to pad things in their favor to offset losses from people like you that wind up not fulfilling their end of the deal down the road.
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