Trading in a car when purchasing

Monello

Smarter than the average bear
PREMO Member
Why would a car dealer increase a trade in value instead of dropping the new car price? Is it any difference for them? As a purchaser it's all the same in the end. Just curious if there is a benefit for the seller.
 
I wondered that myself when I traded up. I think it has to do with the way money is budgeted, the various incentives that a dealer is given. Different pots of money and allowances between trade-ins, factory incentives, dealer incentives... the factory incentives don't come out of the dealer's pocket. The trade-ins are also re-sold, so they have a little latitude on what they can offer for trade in.
 

RoseRed

American Beauty
PREMO Member
I wondered that myself when I traded up. I think it has to do with the way money is budgeted, the various incentives that a dealer is given. Different pots of money and allowances between trade-ins, factory incentives, dealer incentives... the factory incentives don't come out of the dealer's pocket. The trade-ins are also re-sold, so they have a little latitude on what they can offer for trade in.

A co-worker recently traded in her car for an upgrade. She later saw her old car for sale for more than what they gave her for it initially.
 

calvcopf

Well-Known Member
Why would a car dealer increase a trade in value instead of dropping the new car price? Is it any difference for them? As a purchaser it's all the same in the end. Just curious if there is a benefit for the seller.

Better commission for the salesman.
 

Chris0nllyn

Well-Known Member
Why would a car dealer increase a trade in value instead of dropping the new car price? Is it any difference for them? As a purchaser it's all the same in the end. Just curious if there is a benefit for the seller.

Couple reasons.

In case the trade gets removed from the deal and because people generally think their car is worth more in trade-in value.
 
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