Negotiate trade-in price *before* or *after* negotiating the new car's price?

[GTO 409]

Years ago, IIRC, Consumer Reports always recommended negotiating the price of a trade-in *before* you entered into negotiations for a new car. I suppose it was to ensure the best price or to avoid mixing the two together.

But a case can be made that a trade-in shouldn't even be on the table, so that they can't figure that in their negotiating tactics. So, that would suggest bringing up the trade-in at the end and rely heavily on the Kelly Blue Book value.

What's your sense of that -- maybe it doesn't matter -- and what have you all done vis-à-vis buying a Clarity?

 

[dstrauss]

I think it is a crapshoot. The few salespeople I have really gotten to know say they assume there will be a trade-in, and they'll just get their price discount back in what they will offer for your trade-in.

 

[Tangible]

All the old advice has been rendered irrelevant by the advent of Edmunds, KBB, and their ilk. Everyone who isn't an idiot knows what others are paying. Just make sure that their purchase price is good whether or not you go through with the trade-in.

 

[Wall-e]

Typically you want to negotiate trade in before talking about price for the new car. Some sales will think they can makeup the difference (if they give you a good value for the trade) in the new car price. This is where you previously shop for prices and state another dealer lower price and have them match. Then you have a negotiation in your favor as you are the one backing them into a corner per se. Obviously most sales know this and will usually low ball the trade in most cases either before or after. With you being there they already feel they have you (I am not as cynical as it may seem haha)

 

[dstrauss]

...With you being there they already feel they have you (I am not as cynical as it may seem haha)

I am...

 

[Mikep00]

Always negotiate after. Get best price on new car.

Then discuss trade in. They either give you the wholesale book value on your vehicle (you can easily look up on your own) or they don’t (obviously subject to a fair discount if you have beaten up your car more than the norm for its age.

If they don’t come up to a fair trade in, don’t trade it in. Either sell privately or talk to another dealership.

At the end of the day you want to get best price on new car and a fair price for the trade in. I’m not into smoke and mirrors. I have no interest in the paperwork showing even better than the best price on the new car, but that extra being taken off the trade in price.


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[lordsutch]

All the old advice has been rendered irrelevant by the advent of Edmunds, KBB, and their ilk. Everyone who isn't an idiot knows what others are paying. Just make sure that their purchase price is good whether or not you go through with the trade-in.

This. Especially now that you can take your car to CarMax and drive away with an offer that's good for 7 days; if the dealer can't beat that number, you can just take it back to CarMax and sell it to them.

The main places they can claw back profit now is with an excessive interest rate that they're getting a kickback from, the Honda Care maintenance plan and extended warranty, and add-ons like cargo nets and spoilers. You can insure against excessive interest by coming in with 2-3 loan approvals, including the one from Honda Finance you can get online, and getting the dealer to beat the best rate if possible; the latter two you can deal with because you can easily find out what a fair price for them is, especially since the Clarity has relatively few dealer-installed options available compared to most cars and you can get the Honda Care plans from any Honda dealer afterwards (so if they're not offering a fair price, "no thanks" works).

 

[Pushmi-Pullyu]

Always negotiate after. Get best price on new car.

Then discuss trade in.

While I can't speak from personal experience, that seems to be the best advice based on what I've read. The one thing you do not want to do is let the salesman talk to you about the value of a trade-in while negotiating the price of a new car... or even a used one, if you're trading in an older used car for a newer one. That is one of the most common tactics that new car salesmen use to milk as much money out of a new car buyer as possible.

Always give yourself the option of walking away from the deal for a trade-in. If one dealer won't give you a good price, try a different one. At worst, you can sell it yourself on CraigsList. If you negotiate the trade-in first, that makes it hard (or at least harder) to walk away from that deal if you are gonna follow that with negotiating for a new(er) car purchase.
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[peterkronenberg]

This. Especially now that you can take your car to CarMax and drive away with an offer that's good for 7 days; if the dealer can't beat that number, you can just take it back to CarMax and sell it to them.

The main places they can claw back profit now is with an excessive interest rate that they're getting a kickback from, the Honda Care maintenance plan and extended warranty, and add-ons like cargo nets and spoilers. You can insure against excessive interest by coming in with 2-3 loan approvals, including the one from Honda Finance you can get online, and getting the dealer to beat the best rate if possible; the latter two you can deal with because you can easily find out what a fair price for them is, especially since the Clarity has relatively few dealer-installed options available compared to most cars and you can get the Honda Care plans from any Honda dealer afterwards (so if they're not offering a fair price, "no thanks" works).

This is exactly what I just did this past weekend. Bought a Clarity. I had a Honda Accord. Had already gotten a quote from CarMax and another dealer. This dealer wanted to pay me $1500 less than what CarMax quoted. I took it to CarMax. But the nice thing is, the dealer let me come back the next day with the check from CarMax and counted it toward the downpayment and completed the transfer of tags and everything.

 

[Tangible]

Something to watch out for, at least in my state of Massachusetts, is that sales tax on your new car is calculated on the net payment after any trade in. If you sell to CarMax or a private party, you pay sales tax on the full price of the Clarity.