When you pre-negotiate a trade value, the figure is not cast in stone. The dealer has to see the car in person for a “hands-on” inspection before they can confirm the actual trade-in value. I worked long enough as an Internet Manager for a major dealer to know that car dealerships hate pre-negotiating anything. Yet, I teach people that if they don’t negotiate all aspects of a car deal in advance, they can leave hundreds, if not thousands of dollars on the table.
A Tale of Two Car Dealers
I’ve been telling the true story of how I recently helped a friend buy a used car. We ended up going to two dealerships and had very different experiences, one good, and the other quite horrible.
Problems arose after I pre-negotiated the value of the trade. I knew we were vulnerable because dealers always have to confirm an estimated value after they see the trade in person. Unscrupulous dealers will use this as an opportunity to renegotiate the trade’s value once they have you in the dealership. This is actually fair and reasonable if they discover something new with the trade, such as an exterior finish seriously corroded by rust, after you had told them it was in perfect condition. In this circumstance it’s perfectly reasonable for the dealer to reduce the estimated trade value based on new information garnered from a “hands-on” inspection of the car.
The Good, the Bad, and the Ugly
It was a bad beginning. The salesperson we dealt with at the first dealership started by lying for no apparent reason. I had made the deal via email with one salesperson, but he was nowhere to be found when we arrived at the dealership. Instead, a cheerful and self-described “sales manager” greeted us and said he would help today. It seemed odd, but both my friend and I were somewhat flattered that the sales manager was helping us personally.
However, it soon became apparent that this sales manager was actually what is known in the car industry as a “green pea,” or brand new to car sales. The crazy thing was that there was no reason for him to tell such a blatant lie, especially one that he obviously couldn’t sustain. A simple, “Greg’s not available right now--I’m Bob, I’ll be helping you” would have been fine.
The real problem came when we sat down to work out the final numbers on the deal. This couldn’t be completed until they inspected my friend’s trade. I had spent hours in back and forth emails pre-negotiating the value of the trade to $3,000. It was a high-mileage older car, and even though my friend could get more by selling it privately, $3,000 was a reasonable trade-in value.
When our “green pea” sales manager told us the dealership would allow just $1,000 for my friend’s trade, I broke dealer protocol. I got up and walked past my salesperson straight to the actual sales manager sitting at his desk. This resulted in the salesperson getting pissed and the sales manager being perplexed.
I succinctly described how the $3,000 trade value had been determined. I asked what new information had been learned about the trade that reduced its value so drastically. He said a vehicle with these miles and in this condition was only worth $1,000. When I countered that he knew all of these facts when he agreed to $3,000, his only response was that his hands were tied and he could only offer the new low figure of $1,000.
Stealing the Trade
In the car industry, this ploy by the actual sales manager is called an attempt to “steal the trade.” It's a tactic that many car buyers fall for out of sheer frustration over needing a car now. I did what I teach buyers to do in this situation: I grabbed my friend and walked out. The manager came running over and quickly said, “Look, if I could get you $2,800 or $3,000, would that work for you?” This was also a ploy. He didn’t say he would actually allow the full amount. Instead, he said “if” he could AND he gave more than one figure. I saw nothing but continued lies and manipulation before us. Life is short and even though it meant delaying the car purchase one more day, we walked out and drove away.
It’s good to have options when shopping for used cars. I had other cars on my short list. A happy ending is coming up in tomorrow’s segment.
The author recently published his new book, HELP! I Gotta Sell My Car NOW! New Rules for Selling Your Vehicle Online! It’s available at Amazon.com.