I'm thinking of taking advantage of the 2004 incentives on either a new Expedition or F-150. However, I took one of my trades in last week and tried to trade on a new F-150 4x2 XLT SC 5.4L (MSRP 30,250, Advertised Sale price 19,995).

Their 1st offer on my 2001 Mercury Sable LS Prem (42k mi and nice shape) was $2,000, then they supposedly stretched to get to $4,000. I left with no deal and was slightly insulted.

Every guide I have looked at says trade in should be upwards of $6,000, with most saying $7-8k. What gives, seems like they are just trying to steal the trade.

Who should I believe the dealer or the trade-in guides?

I may try to trade my 99 Expedition EB 5.4L 4x2 on a 2004 model. But I wonder if I'm going to get the same lousy trade in value. Trade in book values seem to be upwards of $9,000 on kbb, more like $12k on NADA.

 

With all the rebates going on, the dealers really aren't making much off the sale of new trucks. Sounds to me like the dealer is trying to make a little on your car. haha If you really want that particular truck/suv print the Kelly Blue Book trade-in value, take it with you and ask the dealer to match it. I find it strange though that they would offer you so much less than tradein unless the vehicle is in terrible condition. Most times you can get the dealer to come up from what KBB says. I just went through the sale thing. We traded our Cavalier in on a Jetta and we ended up getting 5K off the Jetta plus 3K more than what KBB said the Cavalier was worth. Anyway, my point is, if you really want the truck, take the print out in with you and haggle for it.

 

There are only 2 explanations (and remember where I'm sitting): there's something seriously wrong with the Sable that you're not telling us, or the dealer was trying to steal it. $2000? Incredible. They discounted the heck out of the new truck, but your car is still worth a lot more than THAT. Best advice: sell the Sable outright, work a clean deal on the new truck.

 

Jeff,

A few questions per all the comments made.

Which book do dealers use today: KBB or NADA? Years ago I thought NADA was the authority, at least by what I remember my CU used.

Then with all the rebates going on, how is the demand for used vehicles? I sense that with a 4K average rebate, that the used market would drop in proportion to the current new car market.

And then lastly, if you do sell your car outright, I would suggest to "close" at the same time you buy your new vehicle. For states that charge sales tax - like Pennsylvania, A good dealer could help with a swap and treat it like a trade in and resell, thus lowering your sales tax on the new vehicle purchase.

Thanks...


Oh and Jeff... you are one fine salesman, from one salesman (Technology not cars) to another. Keep up the good work!

 

I agree. KBB seems to always be at the low end of the value range and it is also the one that all the dealers link their website to. So, I tend to think I should be able to get more than the KBB value.

Funny thing was that I went thru the KBB at the dealership with the sales person, because he acted like he didn't believe me when I said KBB was significantly higher than $2,000. After we pulled up KBB and it showed $6-$7k, he left and came back with the $4,000 offer. At that point he explained they were really stretching to get there.

IMO, the car should bring close to trade-in book value, assuming the values are close to being real.

My conclusion was that the advertised vehicles are just a gimmick to get traffic into the showroom. They really don't want to sell vehicles at the advertised price. However, they will sell you one if they can steal your trade.

I'm going to talk to another dealer or two. It is a time consuming process though.

Any thoughts on a reasonable value for a 1999 Ford Expedition EB 4x2 5.4L with 79,000 miles? KBB says "good" condition should be $8,975 for trade in value. I feel like that is low. I NADA shows average trade value of $12,200. I guess that means somewhere in between is reasonable?

 

Are we buying or selling? Dealers love KBB because the price spread is greater, aswhere NADA has kinda gone off the deep end. I have yet to see a car that's worth as much as NADA's trade-in figure, yet their retail values are too low. IMHO, the most accurate is Edmund's. FYI, we don't use any of them here at our dealership because of our pricing. We go by auction values, since we're looking at the true "cash value" of a vehicle, not an inflated trade-in allowance.

The high rebates definitely have a detrimental effect on the used car values. Why buy a used '03 when you can have a new '04 for just a couple thousand more? Case in point: our F&I manager bought a new '04 F-150 STX back in January- no rebates. Ford comes out with a super lease deal in March on F-150s for dealership employees , so he trades in the STX for a loaded FX4 and keeps his payment THE SAME. We gave him what we thought was a fair trade-in based on the market and the fact that rebates were still minimal. Then the rebates get poured on, and in 2 months you could buy a brand-new STX for $200 LESS than what we gave him for it as a trade-in! We finally sold the truck last week- at a $2000 loss.

One problem in NY- we have to give a lemon-law warranty to the person buying the car from our customer. Before lemon-law, we ran cars "through the books" like that all the time, but not anymore. Can't afford the warranty liability.

 

Thanks Jeff,

So where does auction wholesale pricing usually sit? Higher or lower than KBB, NADA or Edmonds?


By the way, I’ve been to Victor NY a few times on business over the years and had a great opportunity to take a customer to Oak Hill CC last year for the Masters -- staying at a neat Bed and Breakfast in Canandaigua (Whew, glad it was not on my nickle). Where is your dealership in relationship to RT 96 and I-490?

 

Auction values are usually lower than the boooks, but often there are exceptions. We looked at a 2001 Mustang GT this morning that KBB said had a trade-in of $10500-$11000, and Edmunds and NADA said $12300-$12500. Auction value was right in the middle at $11500. In that case, I could still sell below invoice AND show more than KBB for a trade-in.


We're right on Route 96, about 1 mile south of the I490-I90 interchange. We're the easiest Ford dealer in Rochester to find.
Isn't Oak Hill amazing? Consistently rated one of the Top 20 courses in North America by several golf magazines. And Canandaigua has to be one of the nicest small cities anywhere. Whenever I sell a truck to an FTE member, I'm always trying to get them to spend a few days here and enjoy this area that I'm so proud of.

The next time you're in Victor you better stop by so we can go out to dinner. Just ask anyone here that's bought a truck from me; I don't brag about much, but I DO know where to go eat!

 

The Black book is probably the most reliable but is usually only available to dealers - The black book basically says what the cars are selling for at the wholesale auctions. My experience is the KBB trade in prices are usually just a tad lower then the Black Book price. This means that if a dealer gives you the KBB trade in value - they should be able to sell the car at auction for what they gave you - but on the other hand, it also means no additional profit for the dealer. You can always go to CarMax and see what they will give you.