Question: Should I bring the trade-in into the car buying negotiating process before or after negotiating a car price?

November 09, 2005

Hi Tony

First of all, I want to say how much I enjoyed your website. You are truly doing mankind (and womenkind) a great service. I have two questions:

1. I have read books and websites on car buying, and some advise that the price of the trade-in be negotiated prior to the price of the new car, others advise the opposite (new car price first, then the trade-in) . . . why the different schools of thought?

2. The reason that I am so avidly reading all car buying advice is because soon, my son and I are going to purchase a new car (in other words, 2 cars).

   I was just wondering, at what point in the negotiations should we mention that to the Salesman in order to get the best deal possible? Should we mention it from the start, or wait after we have hammered out a good deal for one car before asking what they would do if we were to "double" that order?

Thank you very much.

Patricia C.

Answer:

Hi Patricia,

Wow! I'm doing a great service for mankind (and womankind)! How many people can say that? My life is complete! Thank you for enjoying my website.

Now, as to your questions . . .

1. I say don't even bring up the trade-in until after you have negotiated a firm price on the car you want to buy. Car dealers have a bad habit of telling you they're giving you more for your trade-in then they actually are. They do this by artificially inflating the price of the car you're purchasing and 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 than they can buy a similar used car from a car 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 does, they have to buy at wholesale and sell at retail in order to make a profit . . . which, assuming their business is being run efficiently . . . allows them to stay in business.

   If you keep the trade-in out of the picture until you know what you can buy the new vehicle for the car dealer will be forced to tell you the actual value of your trade. In other words what they would actually pay for a similar used car at a dealer auction. They refer to this as the "ACV" which means "actual cash value." A little insider car lingo there!

   You don't want to give the car dealer the opportunity to start playing games with the numbers. Once that happens you are going to lose! So, negotiate for the new car or cars as if you don't have a trade-in. Spring it on them only after you have a firm price negotiated.

2. Now, in the case of buying two cars at once you should tell car salesman this up front. This will get them excited and possibly cause them to go easier on you.

   I know from experience that if a customer told me they were buying two cars I would go all out to get the deals put together. It gives the salesman an extra incentive to work on your behalf.

   But remember . . . you still must stay in control of the car buying process. Negotiate one car deal at a time, and don't let them get the upper hand on you. If they get stupid with you simply say "See Ya" and go to another car dealer. There are plenty of dealers out there who will appreciate your business.

Good luck!

All my very best...

Tony Iorio