If You Know Their Rules ...
You Can Play Their Games

know they will have trouble selling a "dog" on their used-car lot. When the condition of the car raises doubts about its retail marketability, the dealer will often arrange with a wholesaler to buy your trade even before you have closed your deal. As you can understand from the above example, a dealer must be sure that, his costs and profit margin will be covered by the value of the trade-in.

Let's say that you have a car that has a true wholesale value of ~3,200. Furthermore, let's assume that after the dealer calls around to -general wholesalers, the best offer he gets is for $2,000. Often the salesperson will greet you with a long face and say that the best they can do in your trade is $1,800. If you agree, they'll pocket the difference. sometimes-and we'll go into this W more detail later-the salesperson :nay come back and say that the dealership can "allow" you $2,400, or maybe more, on your trade.

What the dealership is doing is simply making the additional $200 out of the profit side of the deal (money that otherwise might have taken the form of a "discount") and putting it on your trade. This is usually a tactic reserved for those people who are more concerned with what they receive for their trade-in than they are with the price of the new vehicle. 13y taking money off one end and putting it on the other, car sellers can make the buyer feel good about t he trade-in price without really impacting the dealership's profit.

Dealer financial Pressures
The dealer is under constant pressure to move his inventory in order t o minimize floor-plan interest and generate the funds necessary to offset the overhead. Unless a dealership has a lime of cars that is "really hot," they will be inclined to take a definite profit now-even if it's yellow what they had planned to get. They know that the next buyer may be days away, so it's really a case of "take the money and run." Currently the competition for your business is fierce, and sales managers are putting a great deal of pressure on salespeople to close deals. As we'll explain later on, you can use this pressure to your great advantage.