I spent a couple years in sales. When we made a trade offer we used book value minus 20%. When we repriced it to sell, we used book value plus 20%. I was always surprised by the number of folks that would let us dictate the terms of the whole deal without even putting up a fight. For every person that wanted to negotiate, there were five others that would sign whatever you put in front of them.

Why would anyone care what a buyer does with their former vehicle after selling it?

DING DING DING.... thats right. The best way to buy a vehicle is to bottom them out on the new car OTD price. Stay off of your trade in allowance. Once they tell you “this is it, we can go no lower on your new truck”, then you start to act like your getting cold feet. Crawfish a lil’ bit and say something along the lines of “man i just dont know (insert other ford dealer name here) is offering me same OTD price but more for my trade”, “ think im going to go and see what kind of deal they will do”. At that point he will say “well how much do you want for your trade in order to make this deal happen today”. Dont be afraid to get stupid. Be aggressive and be informed before you ever walk through the door. Know what your trade sells for retail and throw a number at them that is $500 less than retail. He will say “aint no way”, and hes right, but all you are trying to do is find their breaking point. Go back and forth making sure they do not change the OTD price you have already negotiated on the new vehicle. Dont be affraid to be aggressive, and dont be afraid to get up and walk out. You usually wont make it out of the parking before they start blowing up your cell phone. Its a game. Their job is to take your money, your job it to keep your money. They try and hold onto to as much of their hold back as they possibly can. If they really want to move a unit, they will get off in the hold back and make it look like (on paper) they are giving you more for your trade in. For every 1 person that knows how to buy a car there are 10 who bend over and fold. The goal is to be that one person. You also have to be realistic though. When i used to sell fords, cash buyers were the most unrealistic people ever. Most would want 10k off after rebates because they were paying cash. Not gonna happen. The mark up on new vehicles at the dealership level is not what most people think. Trucks and big SUV’s are their money makers. They have the most wiggle room. Im not sure where they are at now adays, but when i sold fords in 03-05 the f150’s had about a 5k dollar mark up at the dealeship that i worked at. That was pre incentive and not including holdback. I want to say that at the time holdback was in the 3500 dollar range, but i cant remember exactly.

Sounds like AutoNation?

I recently traded in my 2017 F350 on a 2019 F350. It took about 90 minutes for AutoNation corporate to come back to the dealer with a firm trade in offer. I tried to negotiate the trade in price up but was told I needed to talk to the used car manager who was not in that day. When the used car manager came in he following day he added an “additional allowance” line item to the trade in deal. The “additional allowance” was listed separately.

They put the truck on their lot for $2,000 more than what they gave me for the trade. It’s a 1Price, no price haggle dealership but they have $799 “dealer service fee”. They sold my truck in less than 5 days so they made 2,799 on the truck.

FYI, the new truck was purchased with X-plan minus additional $3,750 idiscounts ($3k PCO + $500 ford cash + $250 USAA cash).plus on X-plan are limited to $100, so there was no way to modify selling price or fees.

autonation, sonic, group one... they are all that way. They are trying their damndest to control pricing in the market. They are not good doods. I will not name drop, but i know alot of the guys at the top..... they are not good doods..... the used car market was ruined about 7-8 years ago by a company here in houston called TEXAS DIRECT AUTO. They are now owned by VROOM AUTOMOTIVE. The two guys that started TDA were computer software engineers that got into the car business. They cornered the used car market by selling no haggle, and moving units to make $300 dollars each. That company single handedly DESTROYED the entire used car market. Every aspect from sales to service to reconditioning. It was crazy watching it happen, and seeing how it effected the market. They drove the prices at the auctions sky high because they literally tried to buy every decent preowned vehicle that came across the auction block all across america. The corporate dealerships had to conform, which has spurred these no haggle lots that drove the pricing up on the front end, and down on the back end. I am a PDR guy, and i have taken a 50% hit on income in the last 5ish years. Its ridiculous. I am 40 years old and finding myself second guessing what i have done with my life :-(........ The allowance the mngr gave you comes out of his gross profit, so thats why it is up to the manager. Corperate will only give what they say they will give, after that it is up to the used car director to decide if he wants to come off his bottom line in order to get your trade, and up to the new car director on if he wants to come off of his hold back in order to fluff the deal. The cleaner your trade, the more apt they are to give you the allowance because he knows he will have to spend less on reconditioning for the front line. The tacked on fee is to cover used car reconditioning. Ie: tires or basic mechanical repair, paint and body, dents, wheel repair, interior repair, etc. its a ruff business that seems to get worse every year. We all need to pray that they never figure out how to have complete control over the market. Once they figure that out (and lord knows they are trying) the consumer will be nailed against the wall.