Common Car Trade in Price Scams

March 18, 2013

When buying a new or used car from a dealer, there are several common car trade in price scams, tricks, and bargaining tactics that put the buyer at a disadvantage if he or she is not familiar with what to look for and how to avoid them. Knowledge of these practices alone will give a car buyer an advantage in that one can at least be aware of what is happening in the process. Knowing how to avoid them is even more helpful because the result can be a far more attractive price one receives for a traded vehicle.

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Negotiating Trade in Price

Right from the start, the trade in price should be negotiated separately from the purchase price of the car one is interested in buying. Signaling real interest in buying a car will help in the negotiating process, but when asked about price, a buyer should stubbornly insist that the dealer value the trade in vehicle before details of the purchase are discussed. The two transactions should be treated as completely separate transactions. When a dealer tries to link the two, they are positioning the buyer so they can make concessions on the trade in price, by making fewer concessions on the new car price or vice versa.

Purchase Price Up Front

Some buyers may prefer to negotiate the purchase price first, relying on publically available resources that are very clear on trade in value. Some of these include Kelley Blue Book and Regardless of the specific source, insisting on a price near these published numbers is appropriate. While many dealers prefer to pay the wholesale price, claiming that they have no intention of taking the vehicle into their own inventory, if one’s car is easily sellable or an “in-demand” make or model, insisting on a higher price is important. The dealer is not obligated to wholesale the vehicle for a low price after the sale is complete. A buyer need not feel obligated to sell at a disadvantageous price.

Failure to Look Over Vehicle

In addition to some of the above tactics, some less reputable dealers may employ other misleading practices to disadvantage an individual trading in a car. Be particularly wary of a dealer who provides a price quote without looking over your trade in and mentions that the price is good as long as the car passes inspection. This is a set-up for negotiating the entire deal only to find that you need a few thousand dollars more because there was an issue with the trade in. In this case, either walk away or insist that the dealer put the problems in writing and commit to pay the original quote if you fix the car. This will usually result in an “alternate” solution because the dealer does not want to risk writing down the false information.

Misinformation Provided

Other similar scams involve so-called mistakes as to the model or features on the trade in car. Asking early in the process if the dealer will purchase your car regardless of what you ultimately decide may help avoid some of these ploys, but being vigilant and sticking to your budget and car-buying plan is critical.

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