We’ve all heard the commercials: “Come on down, we’ll give you $2,500 for your trade-in – no matter the condition! That’s right! Push, pull, or drag your vehicle to our store and we guarantee…” If it sounds too good to be true for someone to give you thousands for your non-running car, you’re right.
Looks Can Be Deceiving
These deals – sometimes known as push, pull, or drag events – are called minimum trade-in allowances, and they can cost you big time if you’re not careful. Vehicles have a trade-in allowance and an actual cash value (ACV) based on factors such as depreciation, resale value, and cost to replace.
The trade-in allowance and ACV won’t necessarily match. When you get appraisals for your car from multiple dealerships, the ACV shouldn't vary too much, but the trade-in allowance, on the other hand, can vary widely from dealer to dealer.
When a dealer advertises a minimum trade-in, know that there are restrictions, and/or the dealer has to compensate for the allowance they’re giving you. A dealership can’t be expected to give you $2,500 if your vehicle is only worth $500. If dealerships did that, they’d be taking a loss, and that’s just bad business.
Putting it in Writing
So, if you’re guaranteed $2,000 more than the dealer could ever get from the sale of your car, where does that extra money come from? Here’s the trick – it comes from you.
You might not see it if you aren’t looking closely. But, often, that extra money you received for your trade-in is added onto the price of the next car you buy. Sometimes, the catch is that a dealer guarantees a minimum trade-in allowance, but in return, all sales prices are non-negotiable. Or, they may be packed into your purchase agreement as extra fees. Typically, one way or another, you’ll end up paying the price for trading in your non-running car.
This is why it’s important to pay attention to the details before you rush down to a dealership whose promises might be too good to be true.
There are Other Options – Even if Your Credit is Less Than Perfect
Perhaps these push, pull, or drag ads appeal to you because you’ve got a non-running car on your hands, have poor credit, and saving for a down payment seems like an impossible dream. At Auto Credit Express, we’re here to let you know that you have options.
There are dealerships all across the country that work with people whose credit is less than perfect. That’s because these dealers are signed up with subprime lenders that look beyond your credit score to get you approved for an auto loan based on other areas, such as your income, employment, and residency.
These lenders work with people who have bad credit, no credit, and even bankruptcy. Plus, you usually don’t have to break the bank to save for a down payment. Subprime lenders typically only require $1,000 down, or 10 percent of the vehicle’s selling price, whichever is less.
Get Started Today
If you’re in need of a vehicle, don’t put it off any longer, let us help you take the stress out of finding the right car dealer for your situation. Simply fill out our easy, free, no-obligation online auto loan request form today, and we’ll get to work matching you with a local dealer.