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Q."For those of you who've tried to trade in an older Toyota for a new one" My local Toyota dealer told me this. Why would I give you any more for your trade than what I can buy it for at a dealer auction? If you've ever seen a listing of dealer auction prices, you will recognize right away that the prices look quite different from the dealer's ad! LOL. Last one I saw had 2002 Camry LE's with 25,000 miles selling for around $12,500. Sickening isn't it?

A.Apparently you were shopping a dealer that is trying to make his money in the used car business, not the new car sales. The reason is obvious as to why he is not selling enough new cars. Next time a dealer asks why he should give you more for your car in trade than the price he can buy them at action, tell him because if you expect me to buy a new car from you, you will need too. It is sort of a catch 22 for dealerships. The new car business is very competitive today. To make money a dealership must do high volume sales at lower profits, sort of like WalMart does. If they don't sell enough new cars, they will get a lower allocation of new cars from the manufacture. Then they have to buy used cars to sell or give lower trade prices to generate more profits on the new cars they do sell. By giving higher trade price they WILL sell more new cars since every dealer pays the manufacture the same price for vehicles. by selling more the dealers earns a bigger allocation. The dealerships that continue to grow are those the sell the most new cars in their market and continue to gain new customers by doing so. Those that eventually fail do so by getting into the used car business. They forget that used car buyers are generally less affluent then new car buyers, buy less often and there are a lot more place to buy used cars than new cars.

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