Question:  The car dealer is trying to talk me into buying a "Factory Demo" in order to hide the negative equity I owe on my trade.  Should I trust them?

April 27, 2004

Hi Tony,

Let me first say how informative and helpful your website is.

I am looking to trade my 2000 Grand Cherokee ( or sell it hopefully on autotrader) for a 2004 Mazda 3.  I was not shocked when i was told that I had $2,500 in negative equity in my car, but was told that because of my negative equity I should go with the "factory Demo" at a higher price than the one I was looking at

They said they could offer me a $1,700 discount on it (still making the cost higher than my original choice) thus being able to hide my negative equity from the bank.  I could only assume that with 7,500 miles on the car that there still could be more room to negotiate, however they are not budging. "My question is do you think i am being swindled, and if not do you think there should be a margin for future price negotiating?

Thanks in advance...

Chris

Answer:

Hi Chris,

Thanks for the kind words about my website.

First of all, make every attempt to sell your Grand Cherokee yourself.  You will always come out better financially then you will if you trade it.

If the dealer told you that you have $2,500 in negative equity I wouldn't necessarily believe them.  They are looking at your trade for wholesale value only.  Don't let them convince you otherwise.

As far as buying a demo, I'd be careful.  They could be lying to you about the original price of the car in order to make you think they are giving you a bigger discount.

Tell them you are going to shop around.  Let them know they can't push you into making a premature decision.  If they want your business bad enough they will come back at you with a more attractive offer.  And don't accept that at face value either.

Continue to stall for time and they may very well offer you an even a better deal yet.  Keep them honest by shopping around.

And Chris, if you let them arrange your financing it's going to cost you thousands more yet.

Read the following pages on this website so you have a better understanding of how these guys operate:
Selling your vehicle...
Financing your vehicle...
Trading your vehicle...
The Most Closely Guarded Secret in the Car Business!

All my best...

Tony Iorio