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Tricks Dealers Use to Rip You Off on Your Trade-In

Dealers can make a lot of money off your trade-in, and we mean A LOT of money.

In fact, selling a used car will usually earn a dealer at least double the profit they make on a new car.

It's no wonder they spend much of their time devising ways to buy your used car on the cheap and make a killing reselling it.

Most car buyers don't think much about their trade-in. They don't take the time to figure out its true wholesale value and so they end up getting screwed most of the time.

There are three main tricks dealers use to rip you off on your trade-in, let's take a look at them so you won't fall for it.

Mixing the Trade-In with the Purchase

3 out of 4 new car buyers have a trade-in, and the vast majority negotiate the purchase of their car along with their trade-in. This is one of the biggest mistakes you can make.

When you allow a dealer to combine your trade-in with the purchase, they can play all kinds of shell games and know how to push your hot buttons so you're happy with the deal, even though they've screwed you.

For example, if they see that you're more interested in negotiating the price of the new car, they'll give you a good deal but will rip you off on the trade-in. You got a good price on the new car, so you figure you got a good deal - WRONG!

It works the other way too. If you're concentrating on the price they offer for your trade-in, they'll give you a good deal but rip you off on the price of the new car.

Either way, the best way to defend against this is to separate the purchase of the car from the sale of your trade-in. You should always shop your trade-in to multiple dealers and keep that transaction separate from the purchase of the car.

Lowball Offers

Another technique many dealers use is to give you a low-ball offer on your trade-in. First, they want to see if you're a true sucker and willing to accept such a low price.

But usually, what it does is cause you to be taken aback by such a low offer. It makes you question the value of your vehicle.

As they increase the price in the back and forth negotiation, it seems like a victory for you - but they started out with such a low price that even with price increases, your trade-in is still way below wholesale value.

Again, the way to defend against this is to shop your trade-in to multiple dealers. You should encounter a dealer willing to pay true wholesale value along the way.

Psychological Tricks

A common method dealers use is to get you to diminish the value of your vehicle using psychological tricks.

They'll have you walk around the car with them as they point out every single scratch, ding, dent, and worn out part. They may utter some comments under their breath - just loud enough for you to hear and make you question the value of your vehicle.

When starting the vehicle, they may pretend to hear a weird noise. Their methods are all designed to prepare you for a low-ball offer.

Just realize what's going on, and stick to your guns. Use our negotiation techniques and don't worry if they try these tricks on you. As long as you shop your trade-in to multiple sources, you will minimize your chances of being ripped off.

My Recommendation for Car Shoppers

TrueCar No-Haggle and Edmunds Price Promise are the quickest way to see the lowest car prices in your area. These sites show you no-haggle prices from dealers closest to you - and the deals are usually really good. This should be the first step you take when negotiating your car price. Follow this up with my checklist to make sure you squeeze out every last bit of savings.
- Gregg Fidan

Gregg Fidan

About: Gregg Fidan

Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.

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