Negotiation Advice Needed -- Used 2011 Model

[Corolla2Rav4]

Hi all -- The dealership I bought my Corolla from has this used model on it's lot:

• Make: 2011 Toyota RAV4 4DR I4 FWD
• Engine: 4 Cyl - 2.5L
• Transmission: Automatic
• Color: Super White
• Mileage: 2,500
• Sticker Price: $21,380

The mileage and the price seem great. The KBB price I'm seeing is $20,459 (see here: Kelley Blue Book).

I'm planning to trade in my 2010 Corolla S model (35K miles). The KBB trade-in value for my car is ~$9K.

How far off does this price seem from a good deal? Any thoughts on negotiating tactics and a firm offer price to stick to? I'm paying cash, and I am working with the sales associate I bought our Corolla from 2 years ago.

[veliksam]

If your paying cash you hold the power, either he gives you more for your trade in or he gives you a cash discount, tell him those are his options and that if he doesn't accept either than you tell him you walk and so does your cash. Trust me, they are trying to sell so they need to play ball.

Sent from my HTC ONE X

[vanib]

Only 9k for a 2010 Corolla S with 35K miles
Do you really need the RAV?

[pepepeter]

I would hold off in mentioning about the trade in.

Step 1 always negotiate to as close as possible to the price you want but never disclose this number the sales person. Be reasonable in this number, check truecar website to grt an idead of the market value (what others have paid) in your area as leverage.

Step 2 do not even mention you are paying cash until the price is settled and agreed upon. Some sales persons may not want to deal with cash puchases since they might not make as much of commissh as a car that is financed (not always the case of course YMMV).

Step 3 emphasize you will trade in uour corrolla as your down payment if necessary. They might frown on this and that is because you negotiated on a price that might be below a value that can help the dealer recouperate their loss when selling the corolla to another customer.

Of course YMMV on these steps, but they always work for me!

Good luck!

[salsarev]

Also check Edmunds.com and NADAguides.com for their values on both cars. You'll find the values all over the map, but take an average of all three sources and see what you come up with. Some people advise a buyer to negotiate the price of the car being purchased before talking about the trade. Once a purchase price is determined, then negotiate the value of the trade in. I've never been comfortable with that, so I don't know how effective that strategy is. My preference is to decide what you will pay for their car and what you will take for yours and negotiate the difference. In other words, if you think their car is worth $20k and yours is worth 9k, that's a difference of 11k. That's the maximum difference you are willing to pay. Start out by offering 9 - 9.5k difference and go from there. Also, refer to your contract from two years ago to know what fees other than tt&l the dealer will tack on. Good luck!

[RTexasF]

A cash sale is the least desirable option for the dealership. They make money on the financing so "I'm paying cash" doesn't have the clout that it used to.

Have you booked your trade in? $9K just sounds low to me.

[ARK]

Timing is also important, end of week, end of month, you must know what your trade in is worth and you must know the cost of the car you want! Dealers get hungrier closer to their deadlines and every sales department has dead lines.

Certain cars have a better or worse demand for them and that affects the cost, know that demand.

With being armed try your best shot based without your trade...then when you know the best cost to buy then offer your trade.

Now be smart and take your time and use your calculator, because the salesman, the manager will do their best to confuse and pressure you. Remember you are buying, you can walk, take a break...close the deal when you are ready, comfortable and the calculator indicates a good deal.

Also deals can be closed with the added incentive of things, services because those things or services are not really added at list but at dealer costs.

You are the buyer, so use your power.

[nhcycle]

A couple of thoughts....

A 2011 with only 2500 miles...... Why did the owner trade it in? Did you check CarFax for major issues?

You can be the original owner took a bath on the trade in..... No matter how they make it look on paper......the trade in cost a lot in lost value......which equates to huge margin for the resale....so they have a lot of room to negotiate a fair deal......

You are trading a good vehicle with reasonable miles on it......and they are banking on you using the trade value....... Lets say you use the book trade value (IF they actually give you that)...... Against the retail book value for the used vehicle....... By the time they close the sale with you and resale your trade.....they'll end up making about $9-10k altogether for the used vehicles......

Don't let them treat the vehicle of interest as a new vehicle despite the mileage....it is used.

My suggestion is simple..... I would not ever offer anything less than book value of the trade against the book value of the used vehicle to be purchased....even with that they are still making $6K on "the deal" They don't like that in the least and will scream and holler..... I do this with every new car I've ever purchase and I get it......every time...... Since the margin position of the used vehicle on the lot is far greater than a new vehicle they still make more money when they agree to these terms.....

The difficulty you face in this situation is they have a 3-yer old car with extremely low mileage and because of that, they're placing a high premium on the vehicle despite it being used and someone is going to walk in and want it as much as you...... Because of that, they can wait you out to get the deal they want...... Whereby you have to decide how bad you want it and how much of a premium you are willing to pay for a used vehicle ...... You are likely to get as near as good a deal on a trade for a new vehicle..... When they offer 0% interest financing and special pricing...... JMHO

[AWDios]

Timing doesn't matter, witholding the fact that you're trading a car in just make the negotiations take longer. Looking at KBB, NADA etc give you an idea of what's fair, but they are by no means an end all be all of what you can and should expect. Just decide what seems fair and you can afford. Here's a good article.

How to Buy a Car in 6 Easy Steps / Blog | Grant Cardone

[Corolla2Rav4]

It looks like my trade-in may be worth closer to $10K. I know I’m letting go of the Corolla early…We have a need for a bigger car and we can’t keep two cars (essentially, we only drive one car per day). I haven’t looked at the CarFax report (I’m seeing it when I go to the dealer for my first visit tomorrow). Below is a recap of the pricing from various sites. I’m thinking of focusing on the cost of the Rav4 first – starting at $18K and not willing to go beyond $19K. This price is inclusive of all dealer charges but without local sales tax. I’ll discuss the Corolla once the Rav4 price is set – starting at $11K and not willing to go lower than $10K. I’ll mention cash last since that won’t win me any points, but I'll make it clear I'm trading in since withholding this isn't going to win me much. Any thoughts on this approach? Thanks guys – this is really helping me out!

2011 RAV4
Edmunds: $20,126 (retail), $16,700 (trade-in)
NADA: $20,725 (retail), $17,259 (trade-in)
KBB: $20,459 (retail), $17,459 (trade-in)

2010 Corolla S
Edmunds: $12,297 (retail), $10,037 (trade-in)
NADA: $15,250 (retail), $10,600 (trade-in)
KBB: $16,173 (retail), $9,688 (trade-in)
Dealership:$15,900 for 2009 S Model with 15K miles