Expert: Ray Paulsen - 7/22/2008

Question
I'm looking at buying a new Honda Odyssey. The dealer knows I have a trade-in.  So far I have rejected their  offers.  The thing that bothers me about his offers is that he isn't lowering the MSRP at all, but keeps increasing the trade-in value for my car.  It's worth around 13,500 and the dealership is now offering 19,000 (diff of $5500)  The MSRP he is offering is 34,873 and according to Edmund's, Odyssey's in my area sell for about $29,345 (diff of $5528).   Both of these net around $5,500.  Is there a hidden cost associated with a higher MSRP versus a higher trade-in?  I guess I'm leery as to why he is offering such a ridiculous trade-in but not budging on the MSRP.  Or, does it really matter as long as I'm still getting a fair net price compared to Edmund's listed price?

Answer
Hi Lori

A dealer knows how to play with the numbers to confuse some consumers, to the educated buyer all that matters is the final number out the door.

There are 2 links on my website I would like for you to study.
(1) Understanding MSRP window sticker   http://www.usedcartips.org/invoicecost.html  
(2)  How a dealer evaluates your trade  http://www.usedcartips.org/TRDE.html  

Here is how I would approch buying a brand new vehicle, on my home page click on the Edmond amd Automotive banners and leave the trade out for the time being, should you have further questions feel free to make contact through here or my forum

Have a great day
 Ray