I’ve been in the car industry since I was 18, and now I own a small dealership. When it comes to ‘car stuff’, I’ve become the go to guy for advice. One of the most common questions I get asked is this: how do I get more money than what the dealer is offering me for my trade in?
It’s a common concern. Negotiating with dealers is never fun, and at the end of the day, you never truly know whether or not you left money on the table. The general assumption is that by brushing up on your negotiating tactics and skills, you’ll get a higher offer. If you hate negotiating, I’m happy to report that this isn’t the most effective use of your time!
“No matter how good of a negotiator your are, most dealerships don’t actually want your vehicle”
The truth is this: No matter how good of a negotiator you are, most dealerships don’t actually want your vehicle. If your vehicle falls outside of what the dealership likes to “retail” (sell on their lot), you will always get an offer below wholesale. This is because the dealership has to account for it’s time, labor, and expense in selling your car at an auction.
The flipside to this? Small independent dealers don’t get the trade in volume of large dealers (such a a new car store or CARMAX) and are forced to buy inventory from auctions. That same trade-in that may be a logistical hassle for a large dealership is the exact car that a small independent may be looking for to fill a spot on his lot!
Based on my years of experience and knowledge about how the industry operates (I used to work for CARMAX, have worked at an independent dealer, and now own a small dealership), here are my two top tips for making sure you get the absolute HIGHEST dollar value for your trade.
- Do Research: Find dealers in your area that are retailing similar vehicles to what you have. If you are selling a Civic, don’t take it to a truck dealership. If your Civic is ten years old, don’t take it to the Honda store selling new Hondas. Find an independent with at least a few ten year old Civics on their lot.
- Shop Your Trade: Once you have a shortlist of dealers that would likely want to retail your trade in, it’s time to start “shopping” offers. Take your trade in to as many dealers as are on your list, and compare your offers.
This method of trading in, while time consuming, will pay off with much more competitive offers. MOST dealers buy trade-ins. The trick is in finding the dealer who wants to retail your car, rather than one who would wholesale it.
“The trick is in finding the dealer who want to retail your car, rather than one who would wholesale it”
While this method guarantees you the highest offer, it does have some significant drawbacks. Most people have a hard time fitting one dealership visit in their busy schedules. This method not only requires potentially hours of research ahead of time, but also multiple visits to multiple dealerships.
The second drawback is that you will have to deal with a variety of different salesman and managers. As someone who deals with people in the auto industry every day, I know firsthand how pushy and relentless some people can be. No one wants ten relentless salesmen to have their cell number.
My solution? Well, it’s not quite there yet. But we are working on a way to bring the car selling experience into the 21st century. When it’s so easy to shop online and find the best deal on your next vehicle, why isn’t it just as easy to shop online and get the highest offer for your trade?
Clean Trade is the answer to this question. We are organizing small groups of qualified dealers in different regions that want your trade! The best part? They bid against each other on the platform. Competition drives the offers up! You don’t leave your house or share your information with anyone until you get the offer you are happy with.
Clean Trade saves you time, and makes you money. It’s the next evolution in the automotive industry.
Have you had a recent trade in experience you want to share? Or just want to vent some frustrations with how the process has gone in the past? Comment below! We look forward to hearing your thoughts and opinions as we prepare to launch the BETA version in Richmond VA!