to all, i've been reading a lot of threads about people trading in or "can't" trade up for different trucks because of price or whatever. i have read "seems a little high for that truck" and other statements like that. i reckon there are guys out there more aggressive than me on dealing with dealers but it seems there are a lot of timid guys who don't deal. this is what i do: on my trade in, i look at KBB.com for what my trade is worth. both trade in value AND retail. then i look at NADA.com and look at the same thing. (heard NADA is mainly for California?) anyways, if my trade is worth $3,000 and they can retail it for $5,000, guess what? i'll split the difference-cut into their profit margin and take $4,000 for it on a trade. see what i'm getting at for their vehicle? spec their vehicle out! they want $10,000 for it-it trades for $6,000, offer them $7500-8000. then you'll start getting deals. the trick is to have "their" numbers readily available for bargaining. hey! this has worked for me for 15 yrs. tell me what you think!!

 

NADA is National Auto Dealers Association.

The NADA book is based on reports from member dealers of what they actually purchased and sold that particular vehicle for--the wholesale (trade-in) and the selling price. The NADA book is updated monthly and by region, and makes it the most accurate and up-to-date.

The Kelly Blue Book, on the other hand, is a listing of Suggested Prices--not reality. It is not based on actual purchase and sales.

This difference between actual (NADA) and suggested (KBB) prices is why dealers are willing to show you the NADA wholesale/trade-in value of your vehicle. The dealer then switches to the KBB to show you the retail price.

This gives the dealer the largest spread/profit margin. When showing you the book price of your trade-in, the dealer will tell that the value indicated is only price they can go with.

To receive the lowest price, it is best to not even mention that you plan on trading your vehicle.

Do your homework. Invoice prices of new vehicles, motorcycles, quads, are available on the internet. Compute the "hold-back" (usually 1-2% of msrp) and deduct that from the invoice, and you will arrive at what the dealer actually pays the manufacturer for the vehicle. Subtract any rebates.

Tell the dealer you plan on going through them for financing, and you are interested in the extended warranty.

Dealer financing allows the dealer to keep the difference between the loan rate you receive, and the rate they obtain from the financing company. This amount can result in thousands in additional dealer profit. Plus, they get a kick-back from the finance company/bank. This is why you should always tell the dealer you're interested in their financing--even when you have already arranged financing through your credit union, and even if you are paying cash.

Note that extended warranties, especially the 3rd party non-manufacturer warranties, are a huge source of additional dealer profit. If you really want an extended warranty, 3rd party and manufacturer extended warranties are available on the internet at a much discounted price.

Anyway, by now, the dealer and salesman are going to be salivating--they're thinking "big profit", based on adding the extended warranty, "paint & interior protection plan", and dealer financing. Make your best deal based on working from the true invoice price up. Dealers want to work from the msrp down. Stick to your guns.

Be Prepared to Walk-Out, and actually get up once, thank the dealer/salesman for his/her time, and head for the door.

If the dealer doesn't chase you, you know you've come to their bottom line. If it is not agreeable to you, give them your phone number, and keep walking. They'll call the next day (or sooner).

If you have reached an agreeable price on your new vehicle, get a copy of the numbers. THEN inform the dealer that you are interested in trading-in your old vehicle, and that the purchase of the new vehicle is contingent on an agreeable trade-in value.

Assuming you have done your homework and know the real value of your trade-in, you will be in a position negotiate the highest value for your trade-in.

Ok--you have now reached an agreeable trade-in value. You already have an agreement on the purchase price of your new vehicle. The dealer will print up a long purchase order showing the price of the new vehicle, the extended warranty, the "paint and interior protection plan (probably "Mop 'n' Glo" and a can of Scotchguard)", your trade-in, rebates, sales tax/licensing fees, and will want you to sign the contract.

Review the contract, take a deep breath, and inform the dealer that you have decided against the dealer financing, extended warranty, and the paint/interior protection plan. Inform then that you have your own financing or have decided to pay cash. Watch the expression on the salesman's/sales manager's face--it will be priceless.

They gave you a low selling price on the new vehicle, and a high trade-in price knowing that they would be making a bundle on the financing, extended warranty, etc. You have the sale and trade-in numbers, and they are stuck with them. Instead of playing you, they will realize that they have been played.

This technique works whether you are buying a new automobile, motorcycle, or ATV.

I once had a salesman state "I won't be able to feed my kids with this deal". I looked him straight in the eye and told him "mine should starve for yours?" He stared at me for a second or two (if looks could kill...)--and signed the contract.

NOTE: rebates vs. low financing rate. It is usually best to take the rebate, and use your credit union for financing. If you do the math, you'll find that the rebate amount usually equals the savings on the low rate financing.

Think worst-case senario--a few weeks after buying your new vehicle, you have a life-changing event, and need to sell the vehicle. You are now competing for a buyer--who is going to tell you that he/she can buy your vehicle brand new with rebate for less than you owe or can sell yours for, all because you opted for the low financing rate instead of lowering the amount financed.

And if the vehicle is totaled, your insurance company is only going to pay the ACV (actual cash value) of your vehicle. The ACV is going to be based on the current vehicle price--less the rebate.

Some finance companies do, however, include "gap insurance" to cover the difference between the loan balance and the ACV.

 

well, i learned a few items. i did not actually know the "details" of the "books" and and the ins and outs of the "game". i'm a fleet discount member, so my price for a new vehicle is set way below the sticker price which is way below what the MSRP ever thought about being. plus, i get all of the applicable rebates. i usually waited until the very last to talk trade in. i was just passing along what works for me. thanks for the info! it should help out a lot of people to save money! i'll be honest with you, i didn't know you could negotiate on atvs! i'll try that trick next time. thanks.!