Question: How do car dealers get away with advertising huge minimum trade-in allowances?

February 28, 2003

I constantly hear a car add that goes like this:

"$8,000 MINIMUM trade on ANY NEW OR USED vehicle on the lot! THATS $8,000 MINIMUM trade for your vehicle. PUSH, PULL OR DRAG it in! And if just ANY OLD vehicle is worth $8,000 JUST IMMAGINE WHAT YOUR GOOD CAR IS WORTH!"

Any help on what that might ACTUALLY mean?!

Dan

Answer:

Hi Dan,

If it sounds too good to be true, it probably is!

This is the first time I've heard this scam used with $8,000 minimum trade-in. Usually it's $2,000 or $2,500. I've even seen $3,000, but $8,000? These guys have totally gone off the deep end!

First of all, no dealer can risk giving you $8000 for a worthless piece of junk. For that matter a car dealer can't just give away $2,000, or any amount! Just think about it. Would you buy a $100 piece of junk for $2,000 or $8,000?

Usually these ads are on specific vehicles, and you have to read the microscopic fine print at the bottom of the ad in order to know which cars are a part of this deal.

I once worked for a Ford dealer who ran one of these ads. It said $2,000 minimum trade-in; "Push, pull or tow . . . how much more can your good trade be worth" and so on!

The sale only applied to used vehicles with selling prices of $5,000 or more...Hmmm!

Anyway, the night before the ad hit they had all of us sales people putting price tags on all the eligible cars. Everything got marked up an extra $2,000!

Surprise!

The bottom line is that it's all about getting people in the door so the sales force can then go to work on them and sell them something. But believe me, there's no way you're going to get $8,000 for a trade unless it's actually worth $8,000 wholesale!

There's always a catch!

Interestingly enough, people fall for this crap all the time. It's amazing!

Take care,

Tony Iorio