1956mkII,

I ordered a 2004 Lariat Supercrew about a month ago. I made the deal at zero over invoice. I then negotiated my trade-in, a 2001 Lariat Supercrew at 1K more than the initial Kelly blue book wholesale price which will end up saving me another $1,200 in sales tax.

After working up the numbers, my salesman wanted to write up the deal using MSRP for the new truck and inflating the value of my trade in from $15,000 to $20,675. I did the math and the end result was the same as zero over invoice and 15K for the trade.

My question is, what was the point of this. From my point of view the end result is the same. Does this help out the dealer or salesman in some way?

If I would have seen this forum before my purchase, I would have made the deal with you. Thanks

 

Thank you for understanding the "difference" figure. As you can see, it doesn't matter what a dealer sells the new one for, or what they give you for the trade-in. It's the difference figure that really counts. Why did they do it in your case? Probably more habit than anything else, unless you owe more on your trade-in than what it's really worth. Some banks won't allow "negative equity" to show on their contract, so they have to increase the price on both the new vehicle and the trade-in so it looks like you have equity.

 

Thanks for the reply. I only owe $4,300 because I have been paying an extra $200 per month instead of the minimum payment. My 2001 trade in has been the most problem free vehicle I have ever owned. It never had to be serviced for anything except oil changes and a set of front brake pads.

I decided to trade it in now to get maximum value for it. It already has 69K miles and it will get wholesaled if it goes much over 70K, otherwise I would be happy to keep it a while longer. But, I think I will really like the 2004.

I guess the paperwork deal must be a dealer preference to see more MSRP sales than invoice sales. I am happy either way because it's a fair deal. This will be my 6th purchase from this dealer, and I have always been treated fairly, because I make reasonable offers. It usually takes about 20 minutes and very little haggling.

More dealers should try this. They would reap the rewards of word of mouth advertising and do much greater volume.