Whether you are buying, selling, or repairing your car, it’s hard to know whether the dealership is telling you the truth about their prices and services. For the most part, dealerships and the people who work there are honest and straightforward with their clients. Unfortunately, however, there are some ways that clients can be easily misled by the complicated system of car sales.
Trade-ins are one such subject. Though this option can seem appealing, there is a lot more to trade-ins than most dealerships will let on. They may be eager to help you with the process, but the ultimate truth is that trade-ins are not always in your best interest. Dealerships are businesses, after all, so they will always look out for their bottom line first.
It is worth noting that sometimes a trade-in is a truly preferable option. At CarVIO, we can work with you to discuss your situation and give you the resources you need to make an empowered, informed decision about your car sale.
Of course, you hope that your car has some trade-in value, but usually, this isn’t a significant amount. The dealership will still have to make money from reselling your car, so they can’t offer you too much, which drives the sale price up for their customers.
What’s more, dealerships have access to special deals from manufacturers, invitations to car auctions, and teams of expert mechanics. They know that they can buy cars at the lowest rates and earn higher profit margins elsewhere, so they will try to avoid paying you more than necessary. After all, they can always get a cheaper car somewhere else if you decide to walk.
This may seem like a positive, but it isn’t. Though their inflated offer on your current car may seem like a dream, you have to remember that your new car’s price is inflated even more. You are still going to have to supplement your trade-in amount with a significant amount of money. In the end, the dealership gets the same amount of money from you as if you were to buy the car outright.
Plus, dealerships are counting on you not knowing the car’s worth and not wanting to deal with the hassle of finding a buyer.
The only way to mitigate the discrepancy between your car’s true value and its trade-in value is to negotiate a lower price on the new car. Unfortunately, this is not always successful. In some cases, you are better off selling your car and taking the higher sum of money back to the dealership to buy the car you want.
Another thing to consider is the condition of your car. Many dealerships will take advantage of a trade-in if the car is too damaged, too old, or simply not desirable. Though they may lead you to believe that your car isn’t worth more than they’re offering or that their offer is the best you’ll get, our team at CarVIO frequently offers our clients much more than the dealership trade-in value for their cars.
As mentioned above, one of the ways to make up for a low trade-in value is to negotiate a lower price for the new car. However, taxes and fees make up a substantial chunk of what you’ll be paying. When you buy a car outright, the taxes will be a percentage of the price of the car. However, when you trade-in, the trade-in value is applied before tax, so the overall taxes and fees will be much lower after a trade-in.
The dealership may disclose this information, or they may not. In some cases, they will justify the trade-in value by pointing out the lower tax rate. Be sure to do the math yourself before committing, as the loss you take on the trade-in vs. selling the car is probably not worth the tax percentage.
Dealerships often claim that a trade-in is the best option because it saves significant time and effort. That may have been true in the past, but today, selling your used car has never been easier. Though you may have to move money around a bit more than with a trade-in, ultimately, the process is still much simpler. Plus, you are receiving a higher amount for your used car.
When you trade-in your car, your timing is incredibly important. There are a lot of factors that go into determining a trade-in price, and many of them are changeable. New car releases, for example, can be a large determining factor. Let’s say that the new Subaru Outback 2022 hits the market. Around that same time, Subaru enthusiasts will be trading in their old models for a new one. If you also have a Subaru, your trade-in value is going to be lower during this time because of high supply and low demand.
This doesn’t mean that the dealership won’t get their full asking price for your vehicle. It simply means that they aren’t as desperate to stock Subarus because their market is saturated with them. If you were to return in six months when all the other trade-ins have been sold, your same car may be worth much more.
The time of the month and year can matter too. If you go to the dealership when the month, quarter, or year is ending, lots of employees will be trying to meet their quotas. Because of this, they will be more motivated to give you a better trade-in deal or a lower price on the new car simply because they want to cross their quota threshold.
It’s normal to feel uneasy about some of these trade-in tactics. Unfortunately, they are effective on thousands of customers per year. In many ways, this is how the dealership culture operates. At CarVIO, we are proud to offer our customers an alternative option.
When you use our free service, you can easily and quickly sell your car from the comfort of your own home. We give you a quote immediately, so you know right away what your car is worth. We buy cars in all conditions and of all makes and models, so you don’t have to worry about making any repairs or replacements before you sell.
If you want to avoid the manipulative and dishonest tactics you’re likely to encounter at a dealership, our team is here to help you. Submit our online form today to get started.