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Why is My Used Car’s Trade-in Value Lower Than Its Retail Value?
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Why is My Used Car’s Trade-in Value Lower Than Its Retail Value?

It is not rocket science now to figure out the actual worth of your current vehicle. And if you are looking to trade-in that car in a buy here pay here in Greenville, SC, you will naturally expect a similar price. But that is not the case in reality as you will always find that the dealership trade-in value is a bit lower than the retail value of your old car. Many will tell you that this is how it is everywhere and you should just accept it and move on but you have a right to know why are you paid less during the trade-in when the dealer will charge more while selling the same vehicle. There are 2 simple reasons and they are reasonable.

One, the dealership keeps a profit margin in the transaction

And that is generally the difference you see in the trade-in and retail value. Selling used cars and trucks in Greenville is ultimately the dealership’s business and an entity can only run if it buys the product at a lesser value than what it is selling for. You need to get rid of your old car to make space for the new one. And the dealership needs a continuous supply of vehicles to keep its lot full. The profit it takes from the transaction keeps the house running. If you want retail value, you can always sell your old car to a private seller but the hassle involved makes it worth it to trade-in with a dealer. Think of the lower price you get as the cost of avoiding the troubles of selling your car privately.

Two, the dealer might need to recondition your car before selling

Your old car might have a broken headlight or a dent in the tailgate and no dealership can sell the vehicle as it is. These defects have to be fixed and they cost money. If not anything, to make your old car look saleable, the dealer will have to wash and wax the car. And once it looks as good as new can the vehicle go up as bad credit cars for sale. The cost of reconditioning the car is deducted from your trade-in value. This is placed on top of the profit margin that dealers maintain. But it is not a good idea to fix your car first and then go for the trade-in as the dealership can get the reconditioning done at a cheaper rate and you gain more by selling without the minor fixes.

buy here pay here in Greenville, SC

But surely, it cannot be overwhelmingly below the retail price. Pick a reputed name like Family Auto where the trade-in value is fair and you get exactly what you deserve for your old car. From there on, you get used cars in Greenville with warranties in the dealership along with the best bad credit financing options.


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