Just when you think it couldn’t guess worse. Typically, one car dealer will start a scam and others will copy it. It spreads from coast-to-coast. Such is the case with this catchy headline that is making the rounds:
How could you possibly pass that deal? It sure looks good UNTIL you get to the fine print that is buried in the ad.
The Disclaimer explained
Here is the disclaimer for you to see (if you can find it), then I will translate it for you:
Trade-in vehicle must be a 2013 or newer model with 120,000 or less miles on it. Vehicle must have a clean CarFax, salvage titles will not be accepted. Offer does not apply to trade-ins with an original base MSRP that exceeds $40,0000 or trade-in vehicles that have had any major OEM modifications made to them. The trade-in amount offered for qualifying vehicles will be the vehicles base MSRP less $.20 per mile put on the vehicle, additional reconditioning costs and any manufacturer incentives, rebates and/or discounts that the vehicle qualified for at the time it was purchased. Offer only valid when trade-in value is applied towards the purchase of a new Nissan from current dealer inventory, excluding 2021 Nissan Rogue models and all commercial vehicles. Offer with approved credit and cannot be combined with any other offers. See dealer for additional details.
An example of a trade-in value
I looked up the window sticker of a random 2015 Ford F-150 SuperCrew XLT 2-wheel drive. Let’s say the miles are average at 90,000. So, what would the truck be worth under this dealer’s offer?
Total MSRP was $37,450 but remember, we only get to use the base MSRP before options and freight which was $32,315. That is the number we’ll start with.
- Starting price: $32,315
- Mileage (90,000 @ .20 cents per mile): -$18,000
- Estimated typical reconditioning: - $1,000
- Rebates in effect in 2015: - $5,050
DEALER TRADE-IN OFFER: $8,265
I pulled up the Manheim Market Report (MMR) for the fictional truck above. This is scientific data based on actual Manheim Auto Auction sales in the last 30 days:
MMR Sale Price To A Licensed Dealer: $22,100
I found a very similar truck at one of our dealers that has 5,000 more miles, but equipped the same:
Retail Price: $26,500.
This dealer’s ad is your textbook bait & switch. This is the kind of ads I warn you about. Everything favors the dealer. There are a lot of ways they can wiggle out of honoring what they say they’ll do, but even if they honor the ad, in this example your trade in value would be $13,835 under the wholesale value.
When you get excited about a dealers ad online, on TV, on radio, in a newspaper, or if they reach out to you some other way, just remember my dear Dad’s words:
If it sounds too good to be true, you can bet it is.