The Insider's Guide to Car Buying ☰ 

Trade-In Value Car Dealer Scam Exposed

How to recognize and avoid the trade-in value car dealer scam |

Also known as the "Hold on your Trade Scam," there are several different trade-in scams that can be used by dealers when trading in your car. Our advice has always been to sell your car privately instead of trading it in with a dealer.

Dealers are experts at putting a value on your trade. They are also experts at playing the, "Your car is not worth that much game" also. Trading in your vehicle can be very costly ifyou go about it unprepared. But it can be done if you know how to protect yourself (and play the game).

If you must trade-in your current vehicle at a dealer. You'll want to be aware of certain dealer techniques that will unknowingly cost you hundreds if not thousands of dollars.

Before Trading in your Car?

You will never get as much money trading your car in, as you would selling it on your own. When you trade your car in you will have to turn into the "Seller" and the dealer will become the "Buyer."

You should always have a good idea of what your vehicle is worth before trading your vehicle.

Car Buying Tip - I highly suggest you sell your current vehicle on your own, a car dealer or wholesaler will not give you as much money for your car as you would get by selling it yourself.

If you don't have the time or patience to sell your car on your own, take the time to research and estimate your trades value before trading your vehicle at a car dealership.

There are some very inexpensive tips and tricks to get your car ready to trade. Read our tips on how to increase your trade-in's value before having you current vehicle appraised.

if you've never traded a car in at a car dealership. You will want to know what to expect when trading in a vehicle. Visit my article on how the vehicle appraisal process works in a car dealership to get a good idea of how the process works.

Knowing an estimated value for your current car and how the appraisal process works in a car dealership will greatly increase your chances of recognizing when a car dealer is trying to pull a trade-in scam on you.

How the Trade-in Value Scam Works

Once you get to the vehicle appraisal process, the dealer will take your car and appraise it. The scam takes place after they've appraised your trade and they come back to present you with the actual cash value (ACV).

The ACV is the value the dealer has calculated your vehicle's worth and will offer you for trading it. This number is usually based from the condition of your car, reconditioning needed to get your car to retail ready, and the current used car market for your vehicle.

The dealer normally presents you the ACV of your trade at the same time as presenting your monthly car loan payments, cash down, and term. The amount they show you for your trade-in will be well below true wholesale value of the car. (If your car is worth $4,000 true wholesale, the dealer will only offer you $2,500)

Hold Car Dealers Hold on Your Trade

$4,000 = (Actual Cash Value)
$2,500 = Dealer Offers Customer
$1,500 = Dealer Profit Held on the Trade

This is where the dealer will dance around and play word games with you, hoping that all you're thinking about is the new car you're about to buy. The car salesman will continue to negotiate with you, getting you to focus on the trade-in instead of other money making areas they're scamming you on also.

You tell the salesman you want another $500 for your trade, he will come back from his manager with only $100 more. This is an old negotiating trick. The dealer knows to only make little adjustments increasing the value to wear you down.

This will continue to happen until you agree on an amount for your trade or settle for the amount that what is given to you. This is why it's so important to never have your car appraised until you've personally estimated the value of your trade.

Car Buying Tip - A negotiation tactic car dealers use when negotiating price or trade value is called, "split the difference." You can turn the tables on the dealer and use this technique to your advantage.

Always ask for double the amount of money you're actually wanting when negotiating more money for your trade. If you're trying to get another $500 for your trade, ask for $1,000.

You may have to go back and forth with the car salesman a little bit and even act like he's winning. Once you're close to where you want to be, say something like this. "Well, if you can't give me a thousand more, at least split the difference with me. $500 more and I'll buy the car right now."

Tips on How to Avoid the Trade-in Value Scam

  • Do not trade your current vehicle in for wholesale values. Sell it privately at retail prices for more money.
  • If you must trade your vehicle in with a car dealership. Have a good idea of what your current vehicle is worth before having it appraised. Learn how to do this on your own buy visiting my section on how to estimate your trade-in's value.
  • Buying a car and trading a car should be dealt with as two separate transactions to keep the confusion to a minimum.
  • Do not bring up the fact you're wanting to trade your current vehicle until you've agreed on the price of the new or used car your wanting to buy. If you're asked by anyone if you're trading a car, say "NO!" You have the right to change your mind later on during the car buying process; this will keep the dealer somewhat more "honest" when appraising your car and will also keep the new car's purchase price separate from your trade-in's value.
  • Take the time to clean up and make your trade presentable, first impressions are everything. Visit my section on how to get the most money for your trade-in for great tips and tricks to make your trade-in vehicle stand tall..
  • If you have an old junk car taking up space on your property or any car for that matter. Look into online companies that will buy your car outright, such as Peddle. They won't just pick up your car; they'll pay you to come get it!

Now that you know how to recognize and avoid the "Trade-in Value Car Dealer Scam," familiarize yourself with more common dealer scams.

This is good stuff, Please Share It!

Get a free new car price quote from Car Clearance Deals
Did You Know?

Contrary to popular belief, factory invoice price is not a dealer's true new car cost.

Other factors such as customer rebates, incentives and dealer holdback will all affect what a dealer really owns a vehicle for.

What's Your Trade Worth?
See how much your trade in is worth

As the old saying goes, "knowledge is power." This certainly applies to knowing how much your vehicle is worth to a dealer.

Find your vehicle's trade-in value here.

See your cars value
How to Get the Best Price

Have local car dealers compete for your business. Start an online bidding war between dealers from the comfort of your computer.

Get local dealers to compete for your business by requesting free, no-obligation price quotes from the following online companies.

Best Car Pricing
Car Clearance Deals

Competition between dealers is the best way to ensure you get the best price. You win when dealers compete!