Question: You talk about how a dealer would never pay more than "WHOLESALE" value on a trade-in . . . how can I figure out what that wholesale value is?
Nov. 19, 2004
Hello Tony
Love your web site! It has great information!
I've been negotiating on a 2001 RAV 4 with 14,753 miles on it and seemingly in great condition. The sticker price is $17,995, but I was quoted $15,995.
I followed your advice and looked up the trade-in value ($11,630). My question is, you talk about how a dealer would never pay more than "WHOLESALE" value on a trade in...how can I figure out what that wholesale value is?
I certainly experienced "Bumping" and by the whole team! I'm a 50 year old female and this is my first car purchase. I offered them $13,000 and stuck to my guns informing them that I knew they didn't pay $11K on the trade-in, and if they did they probably added on to the other end.
I thought the guy would have a stroke! They swore up and down that this car was in pristine condition, and they didn't even have to put much into it . . . just $200. I replied that if they didn't have to spend money on refurbishing they had even more room to negotiate!
I was not liked very much. Finally, they asked would I buy it for $14,500? I told them $13,000.
I would very much appreciate any further info that could help me negotiate, especially what that elusive "wholesale value" is. At this point I don't know if I'm doing OK or if I'm shooting myself in the foot!
Joanne
Answer:
Hi Joanne,
It sounds like you're giving these guys a real run for their money!
You're faced with two problems:
An 2001 with 14,700 miles is an exceptionally low mileage
vehicle. You don't find these every day. The dealer knows this,
and will probably hold out for as much as they can get. Expect them to make $3,000 gross profit minimum. Possibly more! That's
the amount over what they actually have in the vehicle.
Used car prices, both wholesale and retail, are very subjective. The wholesale price is whatever the dealer is willing to pay for the vehicle. A dealer will pay more for a clean, low mileage vehicle than an average one. There's no way of knowing for sure what they paid for it.
You can make an informed guess however. Go to the following websites:
http://www.nada.com/
http://www.kbb.com/
Follow the links on each and get the Trade-in value from each. Another good website to get trade-in prices is Yahoo! Autos
.
You said you already looked up the trade-in value, so you may have already gone to one of these web sites. Please understand that the trade-in value is usually higher than the wholesale value. At least it gives you something to go on.
Again, you can only guess . . . and remember, a pristine
vehicle may very well cause a dealer to pay more than normal, because they know they can get more for it.
My advice to you is to simply decide how much you're willing to pay for the vehicle; an amount that you won't drive yourself crazy later on second guessing yourself over!
Make an offer to the dealer and see what happens. If they don't take it, it's because they are convinced that they can get more from someone else based on the fact that the vehicle is so clean.
At that point you either raise your offer or walk away.
Good luck, and I hope this helps . . .
All my very best...
Tony Iorio
For 
