buying new car strategy; when to mention trade-in?

I would mention it during the price negotiation. You can then use that as collateral as you negotiate prices on the new vehicle.

Been there, done that wrote:

I would mention it during the price negotiation. You can then use that as collateral as you negotiate prices on the new vehicle.

As the op sounds that would be more of a collateral for the salesperson. Actually I would always first negotiate the car price as much as possible and then mention the car. the seller is then already more commited, which is better for you if you are ready to walk away

Been there, done that wrote:

I would mention it during the price negotiation. You can then use that as collateral as you negotiate prices on the new vehicle.

This is the exact opposite of what you should do. Negotiate a price you are happy w first. Then, and only then, should you bring in other variables. Keep an eye on the price and warranty you agreed to as you negotiate trade in value.

I am sure you know this, but you will come out ahead by selling it yourself on Craigslist...

theJeff wrote:

Been there, done that wrote:

I would mention it during the price negotiation. You can then use that as collateral as you negotiate prices on the new vehicle.

This is the exact opposite of what you should do. Negotiate a price you are happy w first. Then, and only then, should you bring in other variables. Keep an eye on the price and warranty you agreed to as you negotiate trade in value.

I am sure you know this, but you will come out ahead by selling it yourself on Craigslist...

I agree with this Jeff guy, but OP I would suggest from experience to try to find a new-ish car. I’m talking like under 10k miles and a year old or less. You will save more in that alone than your trade in and it’s most certainly the exact same car

It really makes little difference. Especially for a clunker.

If they know you have a trade they might try the old "3-card Monte" bit but as long as you do some homework and come in prepared you'll be fine.

If its really a concern, tell them you have a trade but you want to negotiate separate deals. In this case they'll give you wholesale for your car and thats that. Especially if they are planning to just flip it to another dealer. If its a desirable car that they can put on their lot, you might get more than wholesale but then carmax is probably a better bet anyway in that case.

Donate the car to a church or whatever; take the tax deduction.

hoo-ah wrote:

Donate the car to a church or whatever; take the tax deduction.

Of just plain *give* it to a relative or a buddy or a college kid or like that.

theJeff wrote:

Been there, done that wrote:

I would mention it during the price negotiation. You can then use that as collateral as you negotiate prices on the new vehicle.

This is the exact opposite of what you should do. Negotiate a price you are happy w first. Then, and only then, should you bring in other variables. Keep an eye on the price and warranty you agreed to as you negotiate trade in value.

I am sure you know this, but you will come out ahead by selling it yourself on Craigslist...

To each their own. In my experience, sales people will generally ask if you have a trade in first, so the OP might not have that luxury of withholding the information (unless he lies and then recants after the fact). And he's already said private party selling is not an option.

Go to carmax, get an offer. Then just like everyone else has said, negotiate your price. Then say oh well I might trade it in get an offer from them. You know how much your clunker costs, if they are nowhere near it, then tell them what carmax offered. If they won't come up then just sell it to carmax.

Been there, done that wrote:

theJeff wrote:

This is the exact opposite of what you should do. Negotiate a price you are happy w first. Then, and only then, should you bring in other variables. Keep an eye on the price and warranty you agreed to as you negotiate trade in value.

I am sure you know this, but you will come out ahead by selling it yourself on Craigslist...

To each their own. In my experience, sales people will generally ask if you have a trade in first, so the OP might not have that luxury of withholding the information (unless he lies and then recants after the fact). And he's already said private party selling is not an option.

Then you got suckered. You just say eh, I have a friend who might buy it off me.

sellhighbuyblow wrote:

Been there, done that wrote:

To each their own. In my experience, sales people will generally ask if you have a trade in first, so the OP might not have that luxury of withholding the information (unless he lies and then recants after the fact). And he's already said private party selling is not an option.

Then you got suckered. You just say eh, I have a friend who might buy it off me.

I never got suckered. I have never traded in a car. I'm just speaking from experience of what they generally ask before beginning negotiation. They often use that info for their benefit during the negotiation. Now, OP could say something along the lines of "I might have a trade in, but i'm not sure yet. We'll see how things go with the negotiation." That way he's not laying those cards on the table (basically a more realistic version of what theJeff suggested).

If you are sure you are going to trade it in then it bring it up before you are ready to negotiate on your purchase.

You're both only concerned with the net transaction so why make it harder than it has to be?

You are not going to get a better deal by finalizing a purchase price and then trying to sneak in a deal for a trade-in. Because if you finalized the purchase price, they don't have to buy your stinking car. Then you are left with a take or leave it offer on your trade that you don't want to sell on your own.

It's a lot of work to sell it in your own. List an ad. Talk to multiple people. Bring it out to someone or arrange meetings with people. Negotiate with them. Trust their check.

You should get more but you work for it. Maybe you have tons of free time to do this.

And, if you are getting a loan from a local bank, then yes you are financing. That's not buying with cash.

After agreeing to the sale, ask if they can beat your bank rate.

To recap:

Bring up the trade and negotiate a net price of the purchase less the trade=in.

If they play with the sales price or the trade price to get there, who cares?

Say you have your own loan or cash and then ask their rate AFTER the net price has been agreed to. You are in a position to say no to their rate at this point.

Been there, done that wrote:

sellhighbuyblow wrote:

Then you got suckered. You just say eh, I have a friend who might buy it off me.

I never got suckered. I have never traded in a car. I'm just speaking from experience of what they generally ask before beginning negotiation. They often use that info for their benefit during the negotiation. Now, OP could say something along the lines of "I might have a trade in, but i'm not sure yet. We'll see how things go with the negotiation." That way he's not laying those cards on the table (basically a more realistic version of what theJeff suggested).

“I am planning to sell it myself.”

Then, AFTER the price and warranty are agreed upon:

“By the way, how much WOULD you give me for a trade-in?”

Take control of the negotiation or prepare to be gutted.

A lot of dealers have made the trade in appraisal process very mechanical. They will have the used car manager pull NADA values and offer you exactly what NADA says is the current fair market trade in value for the vehicle in its current condition. It is no longer possible to low ball customers on a trade because people can just go on edmunds or KBB and get an accurate trade value. Low balling a customer is a great way to lose a sale. Many dealers no longer over allow on a trade to try to shoe horn people into a loan. Some of the large dealer groups have even centralized their used vehicle appraisals to keep dealers from playing games with the numbers. So, if you are at an AutoNation or similar large dealer group, odds are that the trade in appraisal is not up for negotiation unless you can really show that the trade in offer is out of line.

Also, there is no benefit in keeping quiet about your trade until the last minute. If you have a trade that is in good condition and is something the dealer needs, that can help you in price negotiations. If it is a total clunker, you will probably just get a flat minimum $1,500.00. But waiting until you have a deal worked out can throw sand into the gears if the dealer has already started working up the sale on their computer system. They will have to go back and change all the documents to reflect the trade. People who work at dealerships are generally busting their butts on weekends and evenings. If you play games with them, they are going to put you at the end of the line and make you wait for hours to get all your documents signed, especially if you have outside financing and won't let the dealer match the offer (that costs the dealer money as they get participation in the interest rate or a flat fee for assigning a retail installment contract).

Finally, when you trade a vehicle, it reduces the taxable value of the vehicle you are purchasing. In most states, you can still get the tax benefit if you sell in a private sale or to a different dealer. But it is a more complicated process with deadlines that can nix the benefit if you are late filing things.

I take it you have never had to spend your own money before.

X-Runner wrote:

If you are sure you are going to trade it in then it bring it up before you are ready to negotiate on your purchase.

You're both only concerned with the net transaction so why make it harder than it has to be?

You are not going to get a better deal by finalizing a purchase price and then trying to sneak in a deal for a trade-in. Because if you finalized the purchase price, they don't have to buy your stinking car. Then you are left with a take or leave it offer on your trade that you don't want to sell on your own.

I'm with the camp of negotiate separately.

I work a car purchase in three steps. 1) new car negotiation 2) trade-in negotiation 3) financing negotiation. I go in knowing exactly where the local market stands on the price of the new car, my current car, and pre-approved loan from my credit union. None of this lump together stuff.

The dealer makes different money on each of those. The sales guy wants to keep the car price high, and offer more on trade in. It earns him more $$. The finance office guy makes money on the percentage agreed on over what the bank offers.

Salesmen always try to make it sound like they are informed. If you know their game (and its easy to read up on with the internet now), you can get them to come close to their cost to keep the car on the lot.

Precious Roy wrote:

A lot of dealers have made the trade in appraisal process very mechanical. They will have the used car manager pull NADA values and offer you exactly what NADA says is the current fair market trade in value for the vehicle in its current condition. It is no longer possible to low ball customers on a trade because people can just go on edmunds or KBB and get an accurate trade value.

THIS. Dealers LOVE NADA. Typically, I've been able to pull a few hundred dollars out of them above NADA. Instead of $5,000 trade-in, I've been able to get $5300.

John Clendon wrote:

I'm with the camp of negotiate separately.

That only works if you are prepared to walk away from each separate transaction.

The OP wants to trade in his old vehicle.

Once he agrees to (1) new car negotiation he has bought that car.

He has now lost leverage in (2) trade-in negotiation. Once you have committed to step 1, the dealer can walk away from step 2.

You better be prepared to take both cars home if you go this route.

If you negotiate a package deal, you can always leave in the car you came in and go somewhere else.

Say you want to buy a new car with a MSRP of $20,000.

And you have a car with a book trade-in value of $5,000.

You'd pay a net of $15,000 going in.

I may say, take my trade-in plus $12,000 for that new car. A $3,000 bargain.

You could say that is $2,000 off of the new car and $1,000 more than your trade is worth.

Or vice versa, who cares.

Now let's view a separate negotiation.

You get them to knock $2,500 off of the new car. Sounds great.

Now try to get them to pay $6,000 for your trade-in.

But with if they won't budge from $5,000 after you have agreed to buy the new car?

That would be a net cost of $12,500. Worse than the combo deal I first explained.

If they go for the $6,000, then you're ahead.

But why would they over pay for your trade-in?

They are making their money from the new car. They don't make much off of trade-ins.

Even if you think you are negotiating one thing at a time, it's really a package deal because you don't sign real paperwork until all parts have been agreed upon.

I have never seen someone sign the paperwork on a new car and do separate paperwork for a trade-in at the same place and same day.