AZhitman wrote:Welcome aboard!
Well, you nailed it with your last line - it's the oldest sales trick in the book.
It's called 'churning' - If you come in, they have a better chance of making a transaction with you. I've never seen a dealer give more on a trade-in than what you can get with a private party sale.
Don't know if it's the "oldest trick", but it is one of the many techniques used in sales to get butts in the door. I get these too. Even get them on cars I don't own any more.
What AZhitman says is true. Trade-ins will ALWAYS be lower than retail prices on used cars. It's how businesses run. They need a profit margin to stay alive. If you walk in to a dealership thinking otherwise, then you will be sorely disappointed. Here is a clue -- dealerships typically get between 12 and 16% gross margin (including cost of reconditioning, etc.) on used cars. (cost = selling price X (100% - gross margin%). Much better than the 2% average they get for new, so naturally they like having used cars on the lot. With that in mind, you can judge whether or not the trade value is within a reasonable range.
Regarding another comment referring to "stealerships":
There is nothing inherently wrong or dishonest about this tactic. It's just another weapon in their arsenals.
If you go into a dealership with your eyes open, and you know the numbers (blue book values, current market prices, etc.) and you are firm in your commitment not to buy, there is nothing they can do about it. I've walked in to many dealerships and left without buying -- it's not that hard.
A word about salespeople: We need to sell to make a living. Some of us are unscrupulous, yes, but most of us are hard working, honest people who are into making every transaction a win win situation. I could not sleep at night if I had to screw someone every time I sold something. And I have never knowingly lied to a client about my product. I don't sell cars, but I do sell big-ticket items. And I am tired of being mistrusted, maligned, and ridiculed for what I do. Sales is hard work, and I earn every penny that I make, and honestly.