C: Finding the Best/Lowest Price for Buying a USED Car & Getting the Highest Price for your TRADE-IN Vehicle

The goal of this exercise is to learn how to determine the lowest price you can negotiate when you buy a used vehicle, and to negotiate the highest price you should receive for the vehicle you are trading in when purchasing a new vehicle.

Go to www.nadaguides.com

Click on Pricing & Deals, Prices by Make.

Under Select a Car Manufacturer to Get Started, choose Chevrolet.

Under New & Used Chevy/Chevrolet Prices select 2018 in the drop-down menu.

Under Select a Model, choose 2018 for the year. This will bring up a list of 2018 vehicles.

Then scroll down & click on 2018 Chevrolet Camaro.

Scroll down the page and select Coupe 2D SS V8 trim level.

If/when a zip code entry is required, use 14623.

Enter mileage of 35,000. Leave any options information as is (do not alter the prepopulated vehicle options).

Click Continue.

Now, answer the following questions:

On what date did you do your research?
What is the Clean Retail Price with Options? (see Price + Options row)
What is the Clean Trade-In Price with Options?
What is the Average Trade-In Price with Options?
What is the Rough Trade-In Price with Options?

Please read before continuing:

Finding the Highest Price to Pay for a USED Vehicle:

Clean Retail Price with Options is the price the car dealership would like you to pay for your used car, but you should never pay this price. The dealer expects to sell the car for less than this price even though they hope you are too ignorant to know how to negotiate a better deal.

How much less than Clean Retail should you pay? Well, as close to Average Trade-In Price with Options as you can negotiate. The Average Trade-In is what the dealership likely paid the previous owner when they traded in the car for a new(er) one. The dealer obviously needs to make a profit, but your job is to try to negotiate a price as close to Average Trade-In as you can get.

A good pricing strategy is to pay no more than of the difference between the Clean Retail and Average Trade-In prices. You calculate this by adding the Clean Retail and Average Trade-In prices and dividing the result by 2. This strategy ends up splitting the difference its less than retail (which you should never pay) but more than the average trade-in (so the dealer makes a small profit).

You should be able to hover over the value name at the top of each column to read a description of the type of vehicle that fits each category. Sometimes, however, this doesnt work.

Based on the above pricing strategy, what is the price you would strive to negotiate for this 2018 Chevy Camaro, as a buyer? (Show your calculation below your answer).

Getting the Highest Price for Your TRADE-IN Vehicle:

Average Trade-In Price with Options is what the car dealerships have paid out to the people buying new cars and trading in their used car as part of the deal.

If you are trading in a car as part of a car purchasing transaction, what should you expect to be paid by the car dealership for the vehicle you are trading in? The obvious answer is no less than everyone else is receiving. So you need to determine what everyone else is receiving for the same type of car you are trading in.

The answer depends on the condition of your used car. If your car is in excellent condition, then it would likely match up with the Clean Trade-In Price with Options. If your car is in average condition, then you would use Average Trade-In Price with Options to help determine its trade-in value. You should always try to negotiate a higher trade-in allowance for your car, taking into account your cars condition. Keep in mind that if you receive a really high price for your trade in, then you need to be careful about the car dealership trying to make up for that by charging you a higher price for the car.

Now that you know what others are receiving for their trade-ins on a 2018 Camaro, what is the lowest price you would accept if you were trading in this 2018 Camaro in average condition when purchasing a new car?

Explain your answer: