The Best Trade In Value Car Dealership
Are you heading directly to the dealership to trade in your car? Have you ever stopped to ask: How do I get the Best Trade In Value at the Dealership?
Autohitch was started to answer that question!
It's Time To Trade In With Confidence!!
How Does Trading In A Car Work In 2019?
A car dealership is in business to make money on a Trade In, and you should make no mistake- They Will! Even when they take a loss, it’s toward a goal of making money some other way, usually through some incentive or bonus for selling a certain number of cars.
So, the first thing you should understand is how to trade in your car for the best value.
You may have seen or heard ads where a dealership claims to be paying more than retail value for trade-ins (These are called Trade-in Allowances). They say things like:
- Used vehicle prices are soaring
- Used vehicle inventories are low
- Used vehicles are in high demand
- Threats over Tariffs are driving up used car values
Are these dealerships lying about these circumstances? Actually, they usually are not. But where they are misleading you is in the fact that:
You will be paid more than your car is worth.
-What will happen first is that you will receive an inspection where they will tell you that your car isn’t worth what Kelley Blue Book said it was, so they can boost their padding a bit more (Just in case).
-The next step will be to take the remaining amount above WHOLESALE and build it into your purchase somewhere else.
That’s right, I said Wholesale.
Dealers don’t pay retail for your car, they pay wholesale, so when a dealership promises above retail, not only do they have to find a way to get back to retail (The break-even point) but now they have to get back under it so that vehicle can turn a profit on their lot.
If for whatever reason things get hairy the fall back will always be that the advertisement was written if you are purchasing a certain car. Guess what?
That car isn’t going to be in stock.
Trade In Trick/Tip:
At any point if you want to test the legitimacy of a dealership or a car buying services offer (You think it’s too good to be true) for your car/trade-in, tell them you are still considering the purchase but would be happy to take a check and sell your vehicle to them today.
- If they are eager to buy your car at the same amount quoted, they are being honest about their offer and you know your car is actually worth more.
- If you can’t seem to leave that dealership with a check for your car at the amount you were quoted, it’s about time to declare someone has been less than forthcoming with you.
How Do Dealerships Determine Trade In Value?
To make things simple, Dealerships determine trade-in value by:
- Inspecting your vehicle (Condition)
- Comparing its condition against similar makes/models currently for sale
- Checking retail prices (Usually through software programs, but also public listings)
- Checking Auction Data to determine what other dealers are paying (Wholesale)
- Assessing what you intend to buy and how much profit is available
You should take note that the figure they come up with is the absolute last you will ever be provided if you are ever provided that number at all.
Remember: A dealership is a business, businesses require profit or they can’t stay open to sell you more cars.
All of the number crunching and research they do is really to figure out where they will START their negotiation. To properly combat what will inevitably be a low offer you must be equally prepared with your own market research.
Tip: Most dealers don’t actually research the market, they rely on software tools provided by third parties. If you can find specific vehicles in your area to base your figures on, they WILL doubt their original estimates and this puts you in a better position-
The position where they know you are on top of things!
Why Is Trade In Value So Low?
Believe it or not, a lot of people research what their car is selling for online then head to the dealership and assume that is what a dealer is buying their car for.
The Truth Is:
Dealers buy at wholesale and sell at retail. Yes, it’s simple business, but believe me, people just think differently about car dealerships for some reason.
Don’t get down about wholesale prices though, because guess what?
Wholesale prices are no more firm than retail.
Recently we ran an experiment with someone selling a car. They visited two car buying services (These places do not sell cars to the public) and one dealership. From store one to store 3 the price they were offered went up $400.
So, which offer was the wholesale price?
Any offer you get can and will be beaten, but just like in car buying, if you intend to exceed fair and get the maximum amount possible, you have to find the hungriest dealership, the dealer that does well selling your type of vehicle.
Getting The Max For Your Trade
If a “Fair” trade-in price simply doesn’t cut it for you (For whatever reason) and you want to squeeze every last dollar out of your car then my honest advise would be:
Don’t Trade- Sell Private Party!
A trade-in offer is low because you are being provided the ultimate convenience of not having to deal with the public selling your car by yourself. However, as with many things in life, there is a threshold at which your efforts outweigh the benefit.
If you spend days and weeks drilling away and at hundreds of dollars on trade in values while missing out on the thousands available if you simply sold it yourself, what have you saved?