Once a buyer has decided to trade in their vehicle and secured a car loan, the next step is to pick out the car that they want. When doing this, there’s an important tip that they should keep in mind once they get to the dealership.
Some dealers will attempt to use a tactic known as “over-allow, under-allow” or “disappearing trade” on trade-in vehicles, according to Edmunds. The way this works is by linking the two negotiations together. A buyer may think they’re getting a great value for their trade-in, but won’t notice as the price of the car they’re looking at rises by that much. Or they may be happy with the vehicle purchase price, but will be offered next to nothing for their trade-in.
In reality, these should be two completely separate and unrelated transactions. In fact, many advise not to let the dealer know that you’re trading in your vehicle until after locking in the price of the vehicle. A salesman will make it seem like they’re making a concession by raising the value on a trade-in or lowering the price on a used car, but once they know that both cars are in play they’ll try to keep it balanced between the two. Big savings on a vehicle will mean nothing if they are able to successfully lowball a trade-in.