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Question on new car trade ins.

SEPATOPTEN

Well-Known Member
Aug 21, 2010
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I am in the process of shopping for a new vehicle and have a question on what dealers do with trade in cars like my 2005 Hyundai Sonata that has 235,000 miles on it. A Kia dealer in their mystical world of shell games claims they are giving me $5,000 for my old trade in that's worth $300 bucks on Kellys blue book. I know that's their game but when they get my car that's worth 300 bucks what the heck are they going to do with it? Do they sell it for parts? Do they donate it for a tax break? I can't see them selling my car. The A/C is not working, tires are worn out and my engine light is on. Oxzy sensor. Oh wise board members what do you say?
 
Your trade goes DIRECTLY to auction. A used car dealer will buy it for $20, put on decent second hand tires, fix the A/C leak and do the minimum work needed to pass inspection, and then try to sell it for $600. Alternatively it will go for export, or it will go for scrap.

The new car dealer is playing a (common) shell game. Your car has no value - they are merely knocking five grand off the sticker. Rest assured they are still making money, which is fine, the dealer MUST make a profit on every car they sell.
 
Dealers have regular wholesalers that buy cars like yours weekly for either resale or auction like Foxy wrote. When you do a trade-in you can negotiate either wholesale to wholesale or retail to retail. The latter is the simplest and takes the bullshit out of the negotiation. I think it’s best to get the lowest quote you can on the new car and then the highest quote you can get on the trade-in. Or just tell them you don’t have a trade-in until you get your new car quote. Regardless, dealers have seen it all as far as settling on a price.

A lot of the bigger SUVs used to be shipped to South America where the demand was great. I don’t know if that’s still the case.
 
Yep, if you have a relative or friend that would be interested in fixing up your old car you likely could give it to them, and then get the same deal on the new car...... A relative or friend might want to do that because even though there are repairs required, they know the level of care you took while driving it to over 200K miles. And the engine and transmission may still have another 50K miles in the tank!!
 
Negotiate the purchase in two or three separate transactions to help reduce the shell game. Negotiate the price of the new car by itself and be noncommittal when asked if there is a trade in or if you plan to finance. Get that price as low as possible and then move to the next part of the transaction.
 
Good advice so far.

Also, take your time and go to at least three different dealers. Check out similar vehicles at each, and do the same negotiating as suggested above at each. I then work the phone with the sales people trying to get the best deal possible. But I'm not married to an auto brand. If you are you will be stuck with whatever best offer you can get from one dealer.
 
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My advice is to do your homework and find out the best prices people have been paying for the car you want. Then, find the realistic value of your car and remember, it's always worth more to the person who owns it! Tell the dealership you'll give them your car plus the difference for their car; if they go for it, great, if not, move on. Just don't fool yourself into believing you're ever going to out deal the dealers!
 
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Your trade goes DIRECTLY to auction. A used car dealer will buy it for $20, put on decent second hand tires, fix the A/C leak and do the minimum work needed to pass inspection, and then try to sell it for $600. Alternatively it will go for export, or it will go for scrap.

The new car dealer is playing a (common) shell game. Your car has no value - they are merely knocking five grand off the sticker. Rest assured they are still making money, which is fine, the dealer MUST make a profit on every car they sell.

That last line isn’t always true. Dealers get incentives back from the manufacturer for certain salesmilestones. They’ll sell at a loss if it means they hit one of these incentives that they may miss out on otherwise. Likewise they’ll take a hit on a car that has been sitting on their lot an extraordinary amount of time in order to clean room for fresh inventory, that would likely mean purchasing something most people consider undesirable, or it wouldn’t have languished.
 
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That last line isn’t always true. Dealers get incentives back from the manufacturer for certain salesmilestones. They’ll sell at a loss if it means they hit one of these incentives that they may miss out on otherwise. Likewise they’ll take a hit on a car that has been sitting on their lot an extraordinary amount of time in order to clean room for fresh inventory, that would likely mean purchasing something most people consider undesirable, or it wouldn’t have languished.
There is truth there. I knew about the factory holdback that gets paid at the end of the year. That money is completely untouchable - they will never give you a dime of that. That is where the dealership ownership makes their return.

You're right, I forgot about various sales incentives. If you walk in on the last day and they need a sale to hit the quota, yes, they will take a $1000 loss on a single vehicle to hit a $25k bonus.
 
Your trade goes DIRECTLY to auction. A used car dealer will buy it for $20, put on decent second hand tires, fix the A/C leak and do the minimum work needed to pass inspection, and then try to sell it for $600. Alternatively it will go for export, or it will go for scrap.

The new car dealer is playing a (common) shell game. Your car has no value - they are merely knocking five grand off the sticker. Rest assured they are still making money, which is fine, the dealer MUST make a profit on every car they sell.

Your last statement is incorrect. Dealers do sell NEW vehicles under cost. The margin on new cars is minimal. Their primary source of car sales income is the incentives from the OEMs which kick in when they achieve sales numbers. So a dealer will sell a car at a loss if that loss is exceeded by the value of the incentive he achieved from the sale. If you disagree I suggest you read “Like I see it” by Dale Pollak.
 
.....another thing to consider is looking at dealers within a 150 - 200 mile radius. I did this last year when we decided on the make and model we liked and then I looked for a very lightly used 2017.....bought a 2017 in Oct that was used and found 3 in that 15 mile radius...The dealer in our home state of Va had 2 cars that had 3000 more miles and were asking $3000 more for each car than the one we ended up getting in NC. We had to drive an extra hundred miles, but saved $3000 and got what I feel is a very good deal. Drove off the lot with a sticker price 40K car for 25K.
 
Ditched my 97 Ford truck recently for an 05 Chevy with 117K on it. Looks good, motor looks good, paid cash, frame looks good. Fingers crossed for three years out of it.
The local slogan regarding 10 year old American trucks with over 100k is: "Run it! Drive it like you stole it! Beat the hell out of it!"

I can recommend a book by John Jerome called Truck.

The memorable line for me in the author's tale of using and restoring a 1950 Dodge Truck is "I used to think a truck either ran or needed fixing. Now I know that a truck both runs and needs fixing." https://www.upne.com/963911.html
 
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