I used to see it all the time when I worked as a car salesperson – an excited customer would walk through the door ready to buy a new car… but they had a trade-in they had to get rid of first – I instantly knew that I could use this as leverage to get them to pay more for their new car. Negotiating with car salespeople can be stressful and nerve-wracking, we’re specifically trained in sales techniques and tactics to get more money from customers when they buy a car. Salespeople do this every day, you don’t need to make it any harder on yourself than it already is, and one way you can really help yourself is to sell your car instead of trading it in. Here’s three reasons why:
1) When you sell your car instead of trading you increase your negotiating power.
Most dealers do not want to give you the highest cash trade-in value for your car. Many dealers pull an insider trick to show you “more” for the trade instead of a discounting the new car that you want to buy. It’s a classic sales technique, and for the dealers, it usually works. By removing your trade-in it clears the air and you can negotiate the best price on the car you are buying, free of any smoke and mirror tricks.
If the dealer you’re negotiating with is the kind that does not negotiate on the price at all, it’s even more important to sell your old car instead of trading. The reason? If the price is “set” then the dealer is going to try even harder to reduce the value or “shave” the price of your trade to increase the profit on the car they’re selling you. “Shaving” a trade is a sales technique that sales departments use to further reduce the trade-in value even further past their own appraisal. For example, if they “appraise” your cars value at $5,000 then later in negotiations they’ll return and try to reduce the amount from $5,000 even more.
2) When you have cash to put down without a trade-in you are taken more seriously.
Trade-in values are one of the major reasons many new car deals fall apart, because they really muddy the waters. For example, the salesperson has no idea how much you want for the car (reasonable in their eyes or not) or what mood the appraiser is in. Without a trade-in the salesperson can focus on the car you want to buy and you both can focus on the price of that car only. When you have a trade-in, not only do you have to negotiate the price of a car, you have to negotiate the price of two cars and include the appraisal department (whose job is to buy cars cheap as possible!). If you sell your car before sitting down, it makes the process a lot smoother for both sides if there’s no trade.
3) Without a trade-in you can easily shop your new car to get the best price.
Different models and price ranges have different amount of mark up to work with. By removing the trade you will be able to compare prices easily because you’ve removed a huge variable that will not only change depending upon which dealer you’re at, but even which car you’re looking at.