How can a dealership offer an amount ($2000) for a vehicle trade-in?

Question

How can a dealership offer an amount ($2000) for something that may not be driveable? They claim if you can push, pull, tow it in they will give you 2k for your trade-in. Will you really get the $2k or are they buffering the sale to cover this?

Are you better off selling the car on your own?


Thanks for any replies

Answer 1

I'll make it very simple as I am a dealer. Your 1982 Escort (just an example) isn't worth 2K. If you see an advertisement for push, pull, drag guaranteed amount it is usually on used cars only and the prices are then marked up to cover this "guarantee". They hope your car is worth something, but even if it isn't, they make out. If you look in the small print it will usually exclude any specials because there isn't enough markup in those. I don't use these kind of come-ons because I don't like them. All they want is you in the door and hope that you aren't smart enough to know that your P.O.S. can't really get a guaranteed 2K without, as you put it, buffering the price of the vehicle they want to sell you. You can sell it on your own or if you don't want the hassle, find a reputable dealer who will give you the real wholesale value (which is less than selling on your own, but also less hassle) and work out a fair deal on the vehicle you want.

Good luck and remember, some of us just want to make a living.

Answer 2

I always found those types of adverstising from a car dealership funny.

There are a couple of reasons that they can give you $2,000 for your P.O.S. Most likely they are adding at least $1,500.00 to the new car that you are buying (like you said, buffering the sale).

Dealerships also have stocking incentives from the car manufacturers. Sell x amount of cars this month and we will give you x amount of high dollar SUV's and sports cars to sell for the next month. It is all a game. Be sure to buy at the end of the month, dealerships are willing to loose money to make their quota. If they have already made their quota they are willing to loose money to get better inventory. Remember that even if the dealership sales rep shows you the "manufacturers invoice" they are still making 6%-16% depending on the car. It is called "hold back". Yes the dealership has to make money to stay in business, but do not let them take advantage of you. There are plenty of internet sites out there to help you when purchasing a vehicle.

If you have to push your car to the dealership, you may be better off getting the 2 grand and moving on. If your car is in decent shape, and you have a state inspection sticker, sell it yourself. It might be more of a pain, but you will make more selling the car by yourself than trading it in.

Hope this helps.

Answer 3

First off, dealerships make money if you trade it in, but in reality, sell a lower-valued or high mileage vehicle yourself. As to the 2k, they'll just hold the difference between the actual value of the car in the gross of the new car, or perhaps make it up on the interest rate.

Pretty much every aspect of buying a car has the potential to make money, so a dealership has numerous ways to cover a $2000 trade in that's worth squat.

Answer 4

A dealership can offer any amount of the trade in that they want. What they do is take the profit from the new car to offset the diffrence in what the car is worth. EX.. you may take your car in on trade that is worth $100 and they give you $2000 for it, but be prepared to pay full sticker price and the profit will be used to offset the trade value

Answer 5

By making it up on the price charged for the new car. It's best to go to Kelly Blue Book (kbb.com) to evaluate your old car and also the proposed new one if you have a particular sort in mind. You will see a big difference between wholesale, private party sale, and retail prices. the spread is how dealers stay in business. With all the numbers in hand, you can evaluate the overall sensibility of the deal. My last car purchase from a dealer was satisfactory: the price of both the old car and the replacement were reasonable.

Answer 6

I agree, if it's not driveable, then trade it. If it is, try to sell it. Dealers never give a good trade in. Take a look online at kelly blue book values. There you can get actual value.

Answer 7

Most dealerships that offer something that sounds too good to be true make it up other places. Most deals you have to have the work done at the dealership, I mean ALL the work, from tire rotations, oil changes, etc, for them to honor your warrenty. And most say it has to be done at THEIR dealership. And of course, their labor rate is ridiculous. Find out all of this first if youre thinking about doing this.

Answer 8

They will knock $2k off their already highly inflated price. They just want to get you in there, then watch your pocket book. In the case where you have a junker that you have to drag in then you may come out ahead. If you hve a good car sell it yourself.

Answer 9

its in the price u r paying for the car