Dealer trade-in negotiation?

[The End]

I'm looking at trading in my bike and paying cash difference to purchase another one.

The bike I am looking at is priced at $5,995. I'm wanting to trade in my bike which if I sold privately on Trademe, would get close to $5,000.

I know how dealers work - they will offer me as little as possible for my trade-in bike, and expect me to pay full price on their for sale motorcycle.


When it comes to negotiation, do I have more or less ability to ask for a discount when I am trading in my bike?


I was thinking of offering a lowball price of $5,250 and seeing where they would go to from there.

OR

Am I better off telling them I want more for my machine, and paying closer to the list price on their for sale bike?


If it helps, I purchased my current motorcycle from this dealer when I traded in my previous bike for my current one, so I have done business there before.

[caspernz]

The choice is entirely yours. Bear in mind a private sale price and a dealer trade-in offer are never going to be in the same ballpark. If you want max dollar for your old bike, sell it on trade me. If it's minimum hassle you want, haggle a bit on the trade-in and take the perceived loss. I've done both in the past, and view the trade-in approach a better use of my time...but like I said, your choice

[Hubris]

If you were to negotiate your best price on the new bike and THEN bring up that you wanted to use a trade-in......you would still get the low-ball offer on your old bike, but you wouldn't also be faced with a padded price on the new one.

[TheDemonLord]

The last 2 bikes I have bought I managed to get Frame sliders and a Pack rack fitted at no extra cost and get a good trade in deal

The option to negotiate is always there - my best advise is to make sure that you are looking after the shops interests as well as your own - If you suggest a figure where the shop can make a nice tidy profit (they are a business after-all) but still gives you a good deal, this opens the door to a good deal.

A good assumption is that any bike shop will spend at least 1 hour of shop time looking over your bike and fixing any little issues to bring it up to standard, possibly also servicing it as well. So assume that they will 'spend' about $200-500 on your bike and that they want to make a profit: - so your $5k private sale is down to $4.5k, now add in 20-30% profit margin - a good trade in figure is going to be about $3-3.5K.

If you can't negotiate on price, you can negotiate on other things, being prepared to put money down to show your serious intention as a buyer also helps. For example asking a bike shop what the total cost of a bike would be if you included some Farkles would be, and what deal they could do if you were to put the money down now etc.

Edit:

Also remember the best negotiating tool is also to be prepared to walk away, no need to be an arse about it, but if they aren't budging, or aren't moving enough then prepared to politely try elsewhere.

[Mike.Gayner]

The dealer is interested in the same thing you are - the changeover price (with obviously some consideration given to the margin on your bike). There's no point trying to play tricks with them, just discuss the changeover price directly.

[nodrog:Me]

You with be able to negotiate the best discount if you pay cash......

umm not that's not necessarily true. dealers are often willing to give a better deal if you are financing, due to the fact they get paid for signing people up to a finance company.

tax evasion cash deals are so 1980's.

[Hubris]

I agree with you...but this does depend somewhat on negotiating skill and willingness to put up with gentle conflict as part of the process. Clearly you want the most for your money, they want you to have the least for it (as this gives them the most) and dealers are likely more-practised at the art of the deal. Working from genuine figures as others have suggested in this thread rather than emotion (but it's such an amazing bike, I loved it) certainly helps both sides come to an understanding...if both sides are willing to engage in reasonable compromise. If this always happened, we wouldn't have so many feeling that they got a raw deal.

The dealer is interested in the same thing you are - the changeover price (with obviously some consideration given to the margin on your bike). There's no point trying to play tricks with them, just discuss the changeover price directly.

[Mike.Gayner]

You with be able to negotiate the best discount if you pay cash. What a lot of people forget when trading in is the dealer is required to add GST on the bike which further depresses the trade in value they offer you and on a $5000 bike thats $750.

Not really correct. The dealer claims GST on the purchase of the used vehicle as a second hand goods claim, so the transaction is GST-neutral to the dealer. If some dealer tries to convince you they need to discount their purchase price 15% for GST, they're trying to shaft you.

[nodrog:Me]

You dont sound like you are very finacially literate as with buying a bike though a finance company you will end up paying far more than the advertised price.

You fuckin spastic, where did I mention I had financed a bike through a shop?

And do you really think the shop gives a fuck about the customers financial circumstances, before their own?

[RJC]

Don't worry about the trade in price or the bike price, only the difference matters. That's the sum you need to negotiate.

If I had a bike worth $5k and wanted to get a bike worth $6k, I'd expect the difference to be around $2k.

[pritch]

Don't necessarily decide that the dealer is out to shaft you. They have expenses, they will have to offer some sort of guarantee on your old bike, just as you would expect them to come to the party if you have a problem with your new bike.

Most dealers aren't making a killing. If they were, we wouldn't be hearing about dealerships closing as we have been.

[nodrog:Me]

Fuckin spastic yourself. I was responding to the advise you were giving to OTHERS which demonstrated financial illiteracy in my book.

ok spaz

[trufflebutter]

If it helps, I purchased my current motorcycle from this dealer when I traded in my previous bike for my current one, so I have done business there before.

I did the same thing some years ago, went to trade my then bike at the same dealership I bought it from 18 months prior, on another bike.
They offered me just under half what I paid for it.... as a trade.
I said that's not enough, they asked what I wanted, which was $2k more than their offer, I was told to sell it privately then go and see them. I sold privately for $3K more than I wanted as a trade and bought a brand new bike else where.


Really depends on how bad you want a bike, as to what deal you'll accept.

[Moi]

The dealer is interested in the same thing you are - the changeover price...

Don't worry about the trade in price or the bike price, only the difference matters. That's the sum you need to negotiate. If I had a bike worth $5k and wanted to get a bike worth $6k, I'd expect the difference to be around $2k.

+1...

This is the only figure to have set in your mind - how much will you spend to ride out of the dealer's on a new bike...

When that figure is correct for you and the dealer than you have a good deal and everyone is happy...

[Erelyes]

What a lot of people forget when trading in is the dealer is required to add GST on the bike which further depresses the trade in value they offer you and on a $5000 bike thats $750.

Fuckin spastic yourself. I was responding to the advise you were giving to OTHERS which demonstrated financial illiteracy in my book.

Yet you yourself insinuated dealers can't claim GST on secondhand goods; which they can.

Now, it's not uncommon for finance companies to make it worth the while for the dealer to use a particular company. Particularly so in economic climates where lenders are swimming with cash.

OP, back to your question: what is true is that with a trade in you are basically paying for labor for someone to look over the bike, fix up the niggles, and then they are still faced with selling it. Plus it is an unknown quantity, a risk, so they could be sinking its money down the drain (selling a new bike is a safe bet).

Go in, negotiate friendly, be realistic, don't waste their time, and everyone will be happy.

Also, your bike is probably worth a little less than you think it is. This is not me saying this after seeing your bike, but rather a general observation.