Talk Trade-ins

We are told not to “talk trade-in” until the price of the

new car has been set. I have never understood this, and do

not apply it. I would appreciate it if you could enlarge on

the subject.

When all the dealer discounts, the phony, excessive trade-in

allowance, the manufacturer’s rebates, the month-end

allowances, the holdbacks, the loyalty rebates, etc, have

been factored in, there is a certain amount of money that I

have to hand over along with my old car. This is the number

that I take to other dealers, to compare it with theirs. I

don’t care what tricks of the trade were used to arrive at

that final figure, because that’s the only figure that hits

my pocket book.


Peter Vaughan

I understand your point. I think the real message here is not to let the numbers get all jumbled up while negotiating purchase of the car.

Have an idea of what you should get for the trade in (blue book value?) and what you think you should pay for the new car. Check the math when the salesman fills out the yellow sheet.

I also recommend that you have a way to check the carloan payments. I have a laptop computer with excel that I can use to calculate the loan based on the number of months, interest rate and principal.

So, let me put it back to you- how did YOU arrive at the dollar figure you’re willing to “hand over” along with your car in trade for the new one?

If it’s based on what you can afford, rather than an accounting of the worth of your trade in and fair price of the new car, then you’re doing yourself a disservice and potentially giving them more money than they deserve.

The idea behind separating the negotiations is to 1) demystify the numbers game and 2) reduce the propensity to abandon your old car for whatever they will give you once you agree on the new toy.

You should NOT discuss trade-in until you’ve negotiated a price. That way you’ll know what you’re paying for the new vehicle and what they are actually giving you for you trade-in. The dealers LOVE to play with those numbers to make you THINK you’re getting a good deal. The first thing a salesman will ALWAYS ask is are you trading anything in.

If you plan on trading in your vehicle negotiate that seperately. For the car you’re buying do your research on pricing and determine how much over dealer cost you’re paying for the new vehicle. Also find the Blue-Book value (wholesale and retail) for the car you’re trading in. The more information you have the better off you’ll be in making a decision.

The trick is to try and reduce the advantages the dealer has over you in this negotiation. Remember that the dealer is a professional at this and holds all the cards.

Keeping the trade-in out of the picture simplifies the process a little and reduces his advantage. It still means you need to haggle over that piece of the deal, but then it will be only about that and nothing else.

I owned cars since 1965 and I have only traded in one car and I did it that way. I settled on the price of the new car (no financing) then I arranged my own financing (My bank offered a better deal) So how did I know what the deal was? Easy I did not discuss financing until after the sale price was set. Then after than I get a separate price for the trade-in and I liked what was offered and I took it. Each of the three different transactions where conducted separately.

Most of my cars were simple purchases and no financing or trades.

Most people think that their trade-in is worth more than it is. The dealer plays on this by offering more for the trade-in and less of a discount on the car you buy. His hope is that you won’t be able to figure out the couple hundred dollars or more that he adds to his pocket.

The whole thing about buying the car is that if you know what the deal is worth, you can negotiate it any way that works for you. They’ll give you any deal you want if you ask them for it and if you insist on it. The “no trade talk until you have the final price” isn’t really for the experienced, knowledgeable buyer. If you know what you want and what it’s worth, you will get it.