Trade In Prices

az2wp0sye65487

Can someone explain trade in prices and how they work to me please?

You see car's advertised for x amount, but if you want to trade in your old car against it the price goes up...

Am I right here? If so, what's the theory behind it?

I'm not saying it's right or wrong, not trying to cause an argument. I just want to have it explained so I can understand it.

Thanks.

Henry Ford III

Straight sale price will be lower than a book figure with trade in allowed against that.

Anan1

Basically, most people think their car's worth more than it is. Garages therefore pump up retail prices so they can offer inflated trade-in values.

az2wp0sye65487

Henry Ford III wrote: »

Straight sale price will be lower than a book figure with trade in allowed against that.

So would most prices advertised be 'Trade In' prices or 'Straight Sale' prices?

Owen

To answer your question, some garages advertise cars as 'Straight Sale Only' prices. If you introduce a trade in, one of two things will happen, either the price of the car you're looking at will go up so he can artificially inflate your trade in price making you feel good about the deal (Oldest trick in the book, and everyone falls for it), or he'll give you a trade price on your own car.

What does tend to happen to people looking at trade in price only as an indication of how good a deal they're getting, is that the Dealers all use their discounts to inflate your car's value.

Say, you're looking at 2 cars in 2 different garages. Both are 12000 Euro. Garage A may need to sell their car for a minimum of 10500 to make a profit, and garage B may have to only sell theirs for 10000 to make a profit (Maybe they didn't spend as much reconditioning it for sale, or it didn't need as much servicing to prepare it for sale, etc). You bring your car into them which is got what you think is a value of 4k Euro based on current carzone prices. Garage A will phone around to the trade buyers, they'll tell Garage A your car is worth 2k to the trade. So, using the discount they have between their 12k asking, and 10500 minimum sale price, they'll give you an allowance of 3500 Euro. Garage B will do the same, and give you an allowance of 4000 Euro. So in essence, they're both giving you the same price for your car, but Garage B looks infinitely better to you, and you automatically assume Garage A is ripping you off - even though they may have spent more money making sure the car has been serviced to a higher standard, and is in better cosmetic condition.

Tea 1000

PaintDoctor wrote: »

So in essence, they're both giving you the same price for your car, but Garage B looks infinitely better to you, and you automatically assume Garage A is ripping you off - even though they may have spent more money making sure the car has been serviced to a higher standard, and is in better cosmetic condition.

Yes, but the car I'd really want to buy is the one that didn't need the garage's money and time to make it look nice. I want the one that was nice as it was when traded, that way you're getting a better car.

Henry Ford III

Brandon Alive Pluto wrote: »

So would most prices advertised be 'Trade In' prices or 'Straight Sale' prices?

Remembering your initial post what do you think?

bazz26

The only price that matters is the cost to change figure.