When you’re trading in your car at a dealership, there’s a lot going on behind the scenes that salespeople won’t openly tell you. It might seem straightforward, but the process is often designed to benefit the dealer more than you. Understanding what’s really happening can help you avoid getting shortchanged.
Knowing the things car salesmen never admit about trade-ins puts you in a stronger position during negotiations. This article will shed light on some common tactics and facts that usually stay hidden when you’re at the dealership. Being aware of these can help you make smarter decisions and keep more money in your pocket.
They lowball your trade-in value by $2,000-$5,000 on average
When you trade in your car, dealers often offer you much less than what your vehicle is really worth. It’s common to see offers $2,000 to $5,000 below fair market value.
They do this because they plan to resell the car at auction or to another buyer for a higher price. You might not realize this, but dealers count on you accepting less to protect their profit margin.
Being aware helps you push back or explore selling your car elsewhere for a better deal.
Dealers mark up the price of the new car to hide trade-in losses
When you trade in your car, dealers often lowball its value. But they make up for this by adding extra markup to the price of the new vehicle. This way, it looks like you’re getting a decent deal, but they’re actually covering their losses elsewhere.
You might think you’re saving money, but the higher price on the new car balances out the low trade-in offer. Always check the true market value of your trade-in and the new car to spot this tactic.
Most trade-ins end up at auctions without repairs
When you trade in your car, chances are it won’t get fixed up before leaving the lot. Dealers often send trade-ins straight to auctions where other dealers or buyers get to pick them up “as is.”
This means your old car might not get any repairs or improvements. Instead, it’s a quick way for dealers to clear inventory and make a profit without spending on fixes. So, don’t expect your trade-in to get a makeover before it’s sold again.
They bury trade-in math in monthly payments to confuse you
When you trade in your car, dealers often mix that value into your monthly payment instead of showing it clearly. This can make the deal look better than it really is.
You might think your trade-in lowers the total price, but sometimes it just reduces your monthly cost slightly, hiding the real numbers.
Understanding the exact trade-in value and how it affects your loan is key. Otherwise, it’s easy to get lost in the confusing math dealers use.
Telling them you have a trade-in upfront weakens your negotiation
If you tell the dealer about your trade-in right away, they’ll mix that value into the price of your new car. This can make it harder to see the true cost and negotiate a good deal on either.
Keeping your trade-in under wraps lets you focus on getting the best price for the new vehicle first. Once that’s settled, you can bring in the trade-in and negotiate its value separately.
This approach makes it easier to spot when a dealer is lowballing your trade-in or padding the new car price.
They don’t want you to shop your trade-in separately
When you trade in your car at the dealership, they often encourage keeping it part of the deal. That’s because selling your trade-in separately usually gets you more money. Dealers prefer bundling everything to control the numbers and offer less for your old car.
If you start by negotiating the new car price without mentioning your trade-in, you get a clearer sense of each cost. Dealers don’t want you to see the true value of your trade-in upfront because it weakens their leverage.
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