The first and most important thing you must remember is to ALWAYS keep the trade out of the car buying process until after you have negotiated a firm selling price, in writing and signed by the manager, on the vehicle you are purchasing.

One of the first things the salesperson is going to ask you is "Are you trading?"

Now, I don't want to encourage you to lie, so find some way around that question. You could simply tell the salesperson that all you're interested in is negotiating a fair price on the vehicle you want to purchase, and that's what you want to focus on.

Let the salesperson and the Sales Manager wonder! It will keep them off balance! This is a good thing!

Secondly...Never negotiate based on "Price Difference," meaning that you agree to buy their vehicle for so much money difference plus your trade.

If you do, you will end up spending perhaps Thousands of Dollars too much. . . BE WARNED!

Third...Never negotiate a car deal based on payment amount. In other words they might ask you how much you can afford a month, then say to you, "Will you buy this vehicle today if we can get it for you for $250 a month . . . or whatever?"

If you negotiate in this manner you will probably spend Thousands of Dollars too much. So . . . BE WARNED!

Following my suggestions above is the only way you can keep from getting "RIPPED-OFF" on your trade in.

Now understand this; No dealership is going to give you more than wholesale value for your trade. Got that? Wholesale is the maximum you're going to get!

You have to remember that the dealership has to resell your trade after spending some money checking it out mechanically, taking care of any paint or body work it may need, maybe having to put tires on it and then having it detailed. This costs money!

Then after all this, they have to sell it for enough to pay a commission to the sales person, the sales manager and others and still have enough left over to chip away at their overhead and make a profit! If they give you top retail dollar for your trade that dealership will be out of business in no time!

Most customers get highly insulted if the salesperson tells them that all the dealership can give them is wholesale value.

In my own experience I have been cursed at, threatened and had customers storm out on me simply because I was trying to tell them the truth about their trade! This is why so many car salesmen lie to customers. Customers will believe the lies more easily than they they will the truth!

Go Figure. . . it's a Crazy System! What can I tell You!!

If you allow the salesperson to show your trade allowance off of the sticker price on the vehicle you're buying, or off retail if your buying used, he or she can inflate the trade value - on paper - by adding some of the mark-up from the vehicle you're buying to the trade allowance.

This is money the dealership was prepared to give up anyway had you come in without a trade!

Another trick they use is adding the rebate, if any, to the trade allowance. Watch them on this.

Now, are you starting to see why it's so important to negotiate the price of the vehicle you want first? Then subtract the rebate from that...then talk trade?

By using these techniques you will back the dealership into a corner, thereby saving yourself hundreds, if not thousands of dollars.

One last point to remember is that before you take your trade into a dealership, invest in a professional detail job. It will be money well spent.

For additional insights and tips on this topic read Trade-In-Tactics and Tips!