How does a car salesman decide the trade in value of a car?

Question

I went to Taylor Kia. and I have a 93 caddy 175k fair condition. no dents or rust. i was only offered 200. But a co-worker went and was offered 900 for her 86 caviler. we are oppsite race/ 15 yrs apart in age. did they play apart.or is this correct. Just wondering if i should do business with them.

Answer 1

to start with most dealers use black book not blue book black book is what that particular make and model is bringing at the auction  most likely what happened you were shown a bottom line sale price on the car you wanted and then the true actual cash value of your trade  the other person was probably being shown a retail price and then his trade value inflated looks good on paper but really false figures remember the only number that means anything in a car deal is the difference figure by the way the way the market is right now on big gas hog cars 200 bucks on a 14 year old car with 175 ain't bad could be worse and be like some customers we have here we have to tell them that the 32000 dollar suv they bought 6 months ago is worth 16 grand

Answer 2

They look it up in a guide book and determine what category wether poor /fair /good and excellent and they have a list of price guides to rip you off with

Answer 3

First of all, race or gender play no part in determining the value of a trade! In this case, I believe the person with the 86-Cavalier was shown $900. (not given) the actual ACV (actual cash value) was probably much lower. The Caddy amount sounds like $200. could be the ACV, and maybe they didn't have the room in the deal to "show" you more. Did I explain well enough?

Answer 4

A common misconception is that trade-in values are written in stone.  I worked at a dealership and I learned that the trade-in value can be whatever you want it to be.   If dealers where to give you and honest value of what your trade is worth, they would find out how much they could sell it at the auctions to other dealers.  Since these prices are so low that they are ridiculous to most buyers, dealers base the trade-in value on how much profit they make ultimately.  If they are making 3000 dollars profit on selling the car to you, then they might inflate the trade in value buy 500 - 1000 to make you happy and ultimately buy the car.  Or they also offer you 1,500 for a car that isn't worth anything but add 1,500 dollars worth of fees elsewhere( prep fee, doc fee, whatever you want to call it fee)... its all profit.  If you want to get what your car is worth and not be overcharged and the dealership, sell the car on your own or find out what the junkyard will give you for it.  

When you purchase a vehicle, fight every single fee you see on that paper.

For example: $500 prep fee.

You say:"Oh what's this $500 prep fee for?"

Dealer:"That's to pay for the labor that goes into preparing your car.  It's outsourced to a union that does the job, we don't get paid for it."

You say:"Oh that must take a really long time then."

Dealer: "Oh no.. that just takes about 30 mins."

You say: "Really, I'm paying $500 dollars for 30 mins worth of  work by a factory laborer?"

Dealer:" Ughhh..... "

You fill in the rest.

Answer 5

does yor car run good body decent shape there are basing this on the econmy as it is now sell your car in the news paper  no age s*x or color does not play a role here  if you go to a dealer you just giving your car away if you do trade you might just see your car on the carlot for 1500 or more  good luck

Answer 6

they use KBB and make a call to wholesalers to see how much they can get for it.

Answer 7

They look at the blue book value on the car and make you an offer.

Answer 8

the actual cash value of your trade in is based on what the dealer feels they would get for the car at a wholesale auction. for either one of the cars mentioned i'd figure 200-400 bucks depending on condition.

the trade "allowance" you are offered consists of the actual cash value plus any discount they may make on the car they are selling (for instance, 300 actual cash value plus 500 discount in price on the car you are buying equals an 800 trade allowance).

how much a dealer offers on a trade in is largely dependant on how much they want to sell the particular car you are interested in too, not just what your car is worth!

keep this in mind!