Working with a Trade-In
When a trade gets thrown into the equation it's very easy to lose track of what you're actually getting for a deal. Most people easily overlook the bottom line number and focus on the trade-in figure or the sale price of the vehicle. Every car that gets traded in has an ACV (actual cash value). This is the true worth of the vehicle that the dealer will assign to your car. If they chose to resell the vehicle, the dealer cost will be the ACV plus whatever it costs the dealership to put it through the shop. If they choose to send it to the auction or sell it wholesale this is the number where they will base their profit from.
When numbers are presented to a customer they will show you what is known as a trade-in allowance. This gives the dealership the advantage to be able to get you to a sale price that is "below" their cost, or show you a trade-in number that is substantially higher than the vehicles true worth.
If the dealership sells you the vehicle for $25,000 and gives you $5,000 for your trade, your bottom like is $20,000. They can also take the car and sell it to you for $30,000 with $10,000 for your trade, showing the same $20,000 bottom line. As you can see both deals are in fact exactly the same. One deal is taking more money off the sale price of the vehicle and the other is simply giving you more for your trade-in. When negotiating a price with a trade don't get caught up in the numbers game, know your bottom line. Research the dealer invoice and your wholesale value before you step foot in the dealership. This way you'll know what your target bottom line should be.
Let an auto broker car buying service negotiate your trade-in.
Looking to trade-in a vehicle? Let Cahpow handle your trade-in. Working with a trade can be a lot simpler then you think. All we need from you is the year, make, model, miles and equipment on the vehicle. Depending on the year and miles we may also require a couple photos of your vehicle so we can gauge the condition of the car. From there we do all the heavy lifting and get you the best possible trade-in value. It's that simple! Let your car buying agent work for you to get the best deal.