Question: How should I go about negotiating my trade-in which is worth less than what I owe on it?

November 18, 2005

Hi Tony

First and foremost . . . I love your website. It has taught me some valuable lessons before we go in to purchase our KIA Sorento.

My question is this . . . we have found a Sorento that we really like. It lists for $24,000, and with the rebates the salesman is offering us a price of $21,400. I am still in the mood to talk him down, however, my husband feels that price is pretty accurate.

Here is where it gets sticky: We are trading in a 2001 Chevy Cavalier that has major hail damage. We still owe $2,800 on the car. I am willing to tack on $800 if they will give us $2,000 for it.

How should I go about negotiating this . . . the salesman is unaware that we have such a trade!

Thanks again,

Debbie S.

Answer:

Hi Debbie,

I suggest you beat the salesman up for a lower price on the new vehicle. Tell him you want a better price or you will keep looking. If he and his Sales Manager think you're slipping away they will probably give you a better price. That is if there is anything left in the deal to cut!

After you're sure you've squeezed all you can out of them spring the trade on them, but understand that they will only give you whatever it's worth wholesale. Do it any other way and you will not know for sure what your trade is really worth.

Honestly, from the way you describe your trade I seriously doubt it's worth $2,000. If you deal the way I suggest at least you will find out the true value. By getting them down on the selling price as low as you can they won't have any choice but to tell you the true ACV (actual cash value) of the trade, because they won't have any profit left to in the car deal counter-balance an artificially inflated trade-in value. This is what car dealers usually do.

Don't get mad at the dealer when he offers you less than $2,000. The car is what it is and it's probably not worth much with the hail damage. Just guessing without seeing the car I would say you have a $500 to $1,000 car there. As I said...just guessing!

Let me know how you make out.

All my very best...

Tony Iorio

Hi Tony,

I have to admit that they didn't give us what we wanted for the car! But it was in pretty bad shape with the hail damage. I got a $1,000 out of them. I told them I wouldn't even think about signing any papers unless that is what they gave me since I would have to carry the rest over into the new loan.

I know they didn't want to give me more than $500 for it.

All in all, I don't think we got a bad deal . . . more than I wanted to pay for a car, but hey, I did my research on the Sorento and they are still less expensive than some of the other SUVs out there.

Thanks again for your help!

Sincerely,

Debbie