The trade is one of the most crucial parts of the process, but before diving into that headfirst. Let's take a few moments to understand the sales process. This is something I learned long ago, and have been trained and trained others in various capacities. It varies from company to company, but essentially is the same process. It is not dishonest or unethical. The "sales process" was actually designed mostly to give customers a smooth way to buy rather than randomly dealing with things.
The process consists of roughly 7 components. Some people break these down to create more steps, others will simplify it slightly. All in all, it's all the same idea and goes something like this...
1) Introduction (aka meet an greet)
2) Interview (aka qualifying)
3) Selective Presentation (sometimes unselective, but good salespeople focus on what you want or need)
4) Demonstration (some insist on not going further if this has not happened)
5) Soft or preliminary close (but they won't argue if they say "yes" here)
6) Handle objections, reclose (the "if i could, would you?" game comes into play big here)
7) follow up (either as a prospect or to ensure satisfaction as a buyer)
The trade fits in to this process, which is more generic for all sales groups, usually after the demo drive. Most sales managers are insistant that they will not look at a car without you driving theirs. The idea is that once you drive the car, you will then be in a more emotional state and will give your car up for less to get the new one. This is an area where sales managers show just how uncreative they are. This is a technique which goes back to the days when there was far less competition and a new car was much more special than it is today. Today, you can drive the same car in most areas at a host of dealerships. And in new cars, they should all drive about the same. You may want to drive 2 of them to compare at different dealerships. But if they drive the same (and they should unless one is flawed and needs some work before being sold, usually because of factory error) you can politely turn down any future drives on another identical model and skip to them evaluating your trade.
If it is a used vehicle, ALWAYS drive it. All used cars are unique. Once they leave a dealer as a new car, every one is driven by someone different with different circumstance and such. some cars are maintained well, other s aren't. And despite what some well intentioned consumer advocates tell you, most cars are not turned in with maintenence records. Most customers don't because they have no interest in fielding questions about their former vehicle. There is no data base that holds all the information. Jiffy Lube has no interest in providing car dealers with free mailing lists of their customers to get nothing back for the effort. Plus many people get their car serviced at many non dealer shops who again have no interest in gathering data for future used car customers. There is carfax, which we will cover later, but that does not give much information on this level.
Most places will resist this. Insisting that you drive, if nothing else, just for fun. If this is the case, take the car around the block, return and demand your trade be evaluated. If they don't, take it as a good sign that at least they are respecting you as a human being who doesn't operate like a pavlovian dog if it's a new car. If it's used, beware.
That will not ensure a good trade number however. Playing along withthe dealer will only get you to the trade process. From there, your negotiating skills will need to take over. Before setting foot in a dealer, make sure you arm yourself with print outs from kelley blue book's website, edmunds.com and any other car source you can find.
Do not try to inflate the numbers falsely. Don't give your car an excellent rating if it is any less than in condition to be put on a showroom floor. If the dealer needs to do any cleaning or work whatsoever, the car has dropped from excellent to good in their eyes. If you still feel your car is a unique gem, you can still negotiate yur case, but don't always expect to win. If your car is in good shape, make sure you show that off by cleaning the car before going to the dealer. Not because you are saving him money by detailing the car yourself, he will still need to put the car "thru the shop" if the car is to be certified or warrantied in any way. If that is required, the minimum shop fee most franchised used car departmeents can get away with is 500 for the shop and another 500 roughly to pay for the warranty. Yes, you do actually pay for every warranty you have, not just extended ones. All warranties are essentially an insurance policy which is paid for by the dealer and that cost is figured into the overall cost. Even on a new car.
But if you clean up your car and make it look it's best, it shows you care. It will give you a leg to stand on when negotiating. If the car is a dirty mess, that tells the dealer he is going to have a big shop bill, probably including things he can't see in a 5 minute evaluation. He will assume since you don't care about your car's sappearance, you don't care about the maintenence and repairs either.
If you ever watched a used car manager evaluate a trade (and they know you are watching) you will see a pattern. 1st, they will walk around the car, usually with a concerned look on their face. They will stop and run the finish, looking for flaws. They will check the tires and when they do these checks, almost unvoluntarily shake their head with a sad face as if to say "aww gee, i'd love to give this pperson more money, but i need to deduct for this." At a distance, this cold man will try to appear as if he is Mr Benevolence. The problem is, they would do the same thing if the tires were new and the finish freshly buffed.
Another thing to do to maximize your trade potential is to clean your engine and change the fluids. A trade evaluator with more than 3 weeks on the job will recognize a steam cleaned engine, but even so, it shows concern and care. These things subconciously register with the evaluator even if he tries to show no care for that. Keep in mind, that these guys look at cars every day. On the lot and at auctions. Most of the ones they see are dirty. Clean ones stand out to them. I don't reccomend investing big amounts of money in cleaning, cause sometimes you won't get it back, but break out a bucket of water and soap before going shopping and you will be glad you did.
the 1st number you will get on the trade will be the low number. A used car manager's only real job is to buy low and sell high. That and turn over inventory. They see it as the salesperson's job to make the customer feel all warm and fuzzy and want to come back. Their job isn't about customer service, it's about profit. Even if your car is a great specimen, they want to see just how cheap they can get it initially. This is where having the sales manager already involved previously can come into play.
Instead of taking your objections up with the salesperson, insist on speaking face to face with the manager that you insisted earlier to meet (see the 1st installment of why we hate salespeople). Even if the manager did not do the evaluation. Negotiate the numbers with him. If he is not in a position to negotiate the numbers, he will get the person who did. Now it won't be some lowly sales guy trying to pry him from the tower, it is one of his management peers. Sometimes, the manager can make a call without going back to the evaluator. Any new or used car manager can override the other if they really want to and bump your trade to a more acceptable number. If they can, many times they will be too busy to even look atteh car. They will just go into their computer screens and make sure by bumping the trade, they won't lose money on the transaction. If that is the case, you may get a better number without a lot of hassle. This is especially effective if you managed to get out of the dealership and negotiate over the phone. On the phone, you can remind the manager that they already had a shot to look at the car. Again, he will have to go off his sheer numbers to see if the deal is doable. And sometimes deals that aren't doable on the 15th are on the 31st when a big bonus is the motivation.
Not that the numbers have changed. But on the 15th, the manager may not be able to sneak a "skinny" deal thru his ownerships watchful eye as he can at the end of the month when he can rationalize that sale made him a bonus and the owner a bonus. Most owners are greedy and won't argue with cash in hand. In the mid month, the thought is to make as much off the car as possible, as they may never reach the bonus level and this is their only income. On the 31st. it is much more tangible to make that deal being able to show profit in all the principle's pocket as a result of letting a car go for too little or over valuing a trade.
Most people are hip to the idea of looking up a trade on the net to see how much it's worth. Most people also have no real understanding of the numbers. they don't understand that an organization like Kelley's is really selling loans and insurance and showing you the highest numbers in the industry gets more people to their site. That does not make the numbers legit. Also, as mentioned earlier, most people simply over value their car's condition or popularity.
Also, most customers don't understand that a dealer has no interest in paying retail for a used car. Dealers pay wholesale and sell at retail. That is a simple fact of retail that is universal in all business. Dealers have many auctions at their disposal if they really desperately want to have a car on their lot. There, they can gett he car for wholesale and most times have a recourse if the car is a lemon. Unlike the trade, where if the customer "puts one over" on them, they are stuck. This figures into their equation.
In the end, to get that desired trade number, you need to be prepared with facts, not hyped up facts. You need to present a car and ask a price that you would want to buy that vehicle for. Remember, if you wouldn't pay 5 grand for that 97 Caravan with 84,000 miles on it and a ripped up interior and exterior, who would? Kelley's doesn't buy cars, they present numbers and sell loans and insurance amongst other things. You don't have to be an expert to know what you would spend your money on. If you see a blue book value of a number that is inconceivable for you to imagine others paying for your car, guess what,,,they won't and the info isn't practical.
Thru checking several sites, you may be able to gather an idea of what to expect in trade numbers. But don't get stuck on the actual digits. No 2 evaluators will come up withthe exact same amount. If one guy comes up with 4000 for your car and another comes back with 4300 that doesn't mean the 1st guy was ripping you off or trying to lowball necessarily. Simply pointing out a small difference will usually getthe deal done and the numbers bumped. If the 1st says 2000 and the others say 4000-4500 then the 1st guy is indeed trying to steal the car. Showing the other evaluations may help in getting a better number, but only if the factors are somewhat equal in most cases. Telling the Toyota dealer who can't keep Sienna's in stock that you will buy the Kia probably won't won't get you far. But if one Toyota dealer is far less on the same or real close to the same vehicle when weighing the trade amount.
What you are buying shouldn't play into the process of the trade , but it does. Being coy as some advocates suggest and not telling them you have a trade could work against you in some cases. Just like you, salespeople and managers hate to be lied to and will generally be less than generous to people who are not working in good faith with them. Trying to bullshit your way to a better deal with people who bullshit for a living will be easily found out. They may not say it to your face, but the numbers will reflect that. and sheer pride will sometimes dictate blowing you out the door, especially in the beginning or middle of the month.
Keep in mind, while car dealers sales division sole purpose is to move cars, it isn't to waste time with BS artists and people just jerking their chain. They are pros and can sniff out the time wasters quickly. IF you are one of those people who always seem to clash with salespeople, this may be why. Not because they were so dishonest, but you tried to be dishonest with them. Frustrating you may be the only reward they see as they can tell early on there is no money in it for them. And remember, salespeople are only there to make a living, just like anyone else. And to do that, they need to move products and services, not waste time being bullshitted.
So, know the valuue of your trade going in, make your car look like you care and don't try to bs professionals who bs everyday. That will get you further along to the deal you want.
Stay tuned...next we'll look at the financing game...