Ok, if I'm purchasing a car and planning on trading in a car at the purchase, am I better off telling the dealer that I want to trade in the car and then haggle the trade in and purchase price at the same time, or am I better off settling on a purchase price and then bringing up the trade in figuring that I might have to re-haggle the purchase price a little bit from there?

 

sell it privately, you'll get more $$ for it. If you really don't want the troubles and headaches of selling private then trade it in.
Don't take their first offer since they will low ball you. Walk to another dealer if they wouldn't give you a fair trade in price.

 

The pros say you should do the bargaining for the new car first. Once that's out of the way, then you bring the trade-in to the table.
My way of thinking is: It doesn't matter what your price is on the new car AND it doesn't matter what they'll give you for your trade in. What's important is the difference out of your pocket. You should have a good idea of what a fair price is for the new car and you should also know what the fair "wholesale" price is on the trade in. What? You expect a dealer to pay you retail? It is this difference that you want to negotiate on. And when you go from one dealer to the next, it is the smallest difference that you are trying to achieve.
But, as Former said, the best case scenario is if you can sell your car privately. At least this is true in terms of money in and money out. However, some people don't consider that it is worth making an extra thousand or two and have to deal with strangers and jack-asses coming to your door.

 

I have sold many cars.. tell the dealer that you owe 1K more then you really do, they will of course always try to jack you down about 1K to 2K crom what you own, just becasue they want to. When it comes time to pay off the loan.. just say oops... I owe less then I though... yay... good for me!

 

Xviper, I agree completely until you take the tax issue into consideration. At that point, there is a pretty fine balance between a trade in offer and a private party sale. Essentially, I think if I can get within a thousand dollars of what I figure I can get private party on trade in, then the tax difference will cover the rest. Otherwise, I'm probably better off selling it privately.

y2ks2k, do you deal with the loan through the dealer or what? I own my car; can i tell them its on loan, or will they realize I'm lying when I turn the title over?

 

[QUOTE]Originally posted by munckee
[B]Xviper, I agree completely until you take the tax issue into consideration.

 

What worked for me when I traded in my RSX for the S2000 is that I told them I paid MSRP on the RSX... which I never paid anything close to... and I also didn't mention what I put for a down payment.

I knew this would net me an extra $6,000. And it did.

I'm a believer in knowing your NET difference. Just like xviper said, it doesn't really matter what the price of the new car is, or the price for your trade in. They can give me $1000 for my RSX if they want to, or they can give me $50,000, all I care is that the final number makes sense.

 

How does tax work on a private sale? When you sell the car you are taking a capital loss since it will be for less than you purchased it for.

 

Scott - The tax issue here is Sales tax.... some states (mine included) allow you to not pay sales tax on the amount of your trade..

buy a $31k car....trade in a $15k car...only pay tax on the $16k....therefore saving $900 (6% here).


[QUOTE]Originally posted by ScottB
[B]How does tax work on a private sale?

 

munckee - not sure what you are trading in, but ordinarily you don't get a great deal when trading......they usually either limit the amount of negotiating or offer you a really low amount on your trade....

Here in PA, you can find a private buyer and take them to the dealer with you......you trade the car to the dealer (on paper anyway), the dealer sells the car to your buyer immediately and you save the sales tax on the new car....plus you get all of the benefits of negotiating as if you didn't have a trade.....plus you usually get more for your trade.....

Not sure if that works in Texas, but it is called a Courtesy Trade here......and NO you would not lie and say you have a loan when you do not!

Goodluck.....Scot