When purchasing a new vehicle, many people trade in their existing car as part of the transaction. But what happens if the auto dealership undervalues your trade-in vehicle?
Auto dealerships consider various factors when determining the value of a trade-in, including the vehicle’s age, mileage and prevailing market prices for similar models. As a result, valuation discrepancies can arise due to differences in opinion or the dealership’s appraisal methods.
Why dealerships lowball your trade
It’s no coincidence that the amount a dealer offers a customer for a trade-in is almost always much lower than its actual value. That’s where they make their money. And unfortunately, most customers don’t realize the dealership is lowballing their trade when numbers are thrown around and emphasis is placed on the vehicle’s fault. Here are some reasons why dealerships lowball customers’ trades:
- Your car has been in an accident
- The dealer is scared of the high miles on your vehicle
- The dealer might not know your vehicle’s true market value
- The dealer might not have the money to inventory your vehicle
How to address valuation discrepancies
When engaging in a trade-in transaction, it’s crucial to maintain proper documentation. This documentation includes the vehicle’s maintenance history, any repairs or upgrades and proof of its overall condition. Providing this information to the dealership can help support your case if you believe they are undervaluing your vehicle. Remember, you always have the option to take your car elsewhere and seek a better price from another dealer.
What if the dealer is right and your vehicle is worth much less than you thought?
Maybe that’s down to wear and tear, or age and you just need to accept it. if however, they spot something that you did not spot when you first bought the vehicle, such as it having been flood salvaged or a shut and cut, then you may need to look at your options to hold the original dealer that sold you the vehicle responsible if they defrauded you.