In Some Cases: Your Trade In Is the Money Maker for a Dealership

October 11, 2020
Posted by: alakra
Categories: Finance & Accounting, Trade in

Car dealers know you have a limited number of options to get rid of your old car. So they will buy it from you for as little as possible and turn it around for a hefty profit.
ALSO, some of us don’t like the idea of strangers coming to their house to view their vehicle, low balling, test drives, and waiting for no-shows.

The Trade-In Process:
Some Dealers never give you fair market value for your vehicle. They offer wholesale value, which is $3,000- $8,000 less than market value. This is done so they can sell your trade-in and make a profit. Dealers make it appear they are giving you a lot for your trade-in, but don’t be fooled. They are shuffling dollars around, charging you MSRP, or higher interest, or piling on wasted extras like rustproofing, paint sealant, and extended warranties. They cry on your shoulder that they’ll get nothing on your trade-in.

As you cry over their “loss,” here’s how they profit from you and the next owner of your trade-in:

Used expedition
Trade-In Value

Even with “book” prices, it’s difficult to determine the value of your trade-in, because each car is different. Mileage and condition are the biggest variables. “Trade-in buyers” concentrate on the trade-in and fall asleep during the rest of the deal blindsided by the cash flow shell game the dealer plays.