The Real Truth About Your Car's Trade-in Value!

Car dealers have a bad habit of telling you they're giving you more for your trade than they actually are. They do this by artificially inflating the price of the car you're purchasing and then artificially inflating the trade in allowance.

In reality, all they are going to give you is wholesale value. Why should they buy a car from a customer for more money than they can buy a similar car for at a dealer auction? A car dealer is no different than any other merchant in that they have to buy inventory to resell. Just like the grocery store owner, they have to buy at wholesale and sell at retail in order to make a profit.

The problem is that I've never met a customer who is satisfied with wholesale for their trade. They always think their car is worth retail. It doesn't help when Blue Book and some others list unrealistic values for most cars. The only way to get more than wholesale is to sell the vehicle privately.

Dealers even have terms to differentiate between the real amount they are putting in a trade (ACV) and the fake number that they list on your sales order (Over Allowance). ACV stands for "Actual Cash Value." They have these two terms so that when they are discussing the deal between management and salesman, and when they are calculating their profit after a deal is complete they can differentiate between the real number for the trade and the false, inflated one.

So what happens when you trade a car to a car dealer is that they will inflate the selling price of the vehicle you're buying and then artificially inflate the trade allowance so you think you're getting a high trade allowance. It's all "Smoke and Mirrors!"

This is why I recommend on www.InsiderCarSecrets.com to always negotiate the selling price without the trade. Spring the trade on them after you have agreed to a price on the vehicle you're buying. This is the only way you can know for sure how much they are actually giving you for your trade. The car sales person won't like it, but so what. No one says you have to do a car deal their way. Their way will usually cost you more money!

If you tell them up front that you have a trade they will always hold back some money in the selling price so they can show you - on paper - an inflated trade allowance. The "price difference" will be the same in both scenarios, but the latter always looks better on paper to the customer even though it's all BS!

Doing car deals in this convoluted way is not all the car dealer's fault. As I mentioned earlier, most customers have an inflated opinion of what their trade is worth, so in order not to make the customer mad the dealer will show them on paper what they want to see...a high trade-in allowance, even though there is absolutely no way a dealer could or would pay that amount for the trade.

What a crazy system!

Until next time...

Tony Iorio
www.InsiderCarSecrets.com
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