Granger Ford

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UPDATED 08/17/2020 at the bottom of the post

I have been asked this question numerous times, so I decided to make a post all its own, so it does not get lost in the thread jungle.

I will be using 3 scenarios as they have played out here on the Forum.

For the base line I will be using a trade in that has:
  • KBB retail value of $12,500
  • KBB trade value of $10,000
  • a wholesale (ACV) of $8,500
For the baseline vehicle I will use the Ranger: attached invoice.
  • $45,115 - MSRP – window sticker
  • $43,304 - Invoice
  • $43,406 - X-Plan

  • Dealer A - Full retail MSRP no discounts
  • Dealer B - X Plan pricing
  • Dealer C - Granger Ford example
    • $1000 under invoice
Dealer A
Dealer C
Dealer B
* $1,000 under invoice
Sale Price
45,115​
42,304​
43,406​
Trade "value"
10,500​
8,500​
8,500​
Trade Difference
34,615​
33,804​
34,906​

As you can see in the example (simplistic for sure) that your main concern should not be the trade in “value” but the trade difference as that is what you pay for the vehicle less your trade in..

To equal Dealer C’s price:
  • Dealer A would need to “show” a trade value of $11,311 for the same deal as Dealer C
  • Dealer B would need to "show" a trade value of $9,602 for the same deal as Dealer C

Dealer A
Dealer C
Dealer B
* $1,000 under invoice
Sale Price
45,115​
42,304​
43,406​
Trade "value"
11,311
8,500​
9,602
Trade Difference
33,804​
33,804​
33,804​

Therefore, I say that there are 2 transaction when trading in a vehicle and buying another.

We are selling you one and you are selling us one...

Update 08/17/2020 added a great question to the top for ease of finding it...

@erik1220 said:
Do dealers follow the KBB of trade value pretty closely or are they using their own formulas mostly?
We mostly use a Manheim average known as MMR..that is a dealer subscription based service that is regional and tells us
what the vehicle is selling for at auction
what dealers are asking for them in the area
what the vehicles actually sold for retailed
how many in the area (saturation)
average days to sell..

So if you look online for a Silverado for instance in Iowa the saturation is high, days on lot are high and they retail for less than market value..that vehicle is not one you would stretch the value upwards on...

Same scenario with a Wrangler, sell fast, for more than book, high demand, low numbers for sale, that is one that you may put more in to get on the lot..

The books online are somewhat accurate, too many rely upon those numbers however and use the highest values...if you are critical thinking about evaluating your car it can be a good guide.
 

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erik1220

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Do dealers follow the KBB of trade value pretty closely or are they using their own formulas mostly?
 
OP
Granger Ford

Granger Ford

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  • Thread starter
  • Thread Starter
  • #3
Do dealers follow the KBB of trade value pretty closely or are they using their own formulas mostly?
We mostly use a Manheim average known as MMR..that is a dealer subscription based service that is regional and tells us
what the vehicle is selling for at auction​
what dealers are asking for them in the area​
what the vehicles actually sold for retailed​
how many in the area (saturation)​
average days to sell..​
So if you look online for a Silverado for instance in Iowa the saturation is high, days on lot are high and they retail for less than market value..that vehicle is not one you would stretch the value upwards on...

Same scenario with a Wrangler, sell fast, for more than book, high demand, low numbers for sale, that is one that you may put more in to get on the lot..

The books online are somewhat accurate, too many rely upon those numbers however and use the highest values...if you are critical thinking about evaluating your car it can be a good guide.
 

erik1220

Member
First Name
Erik
Joined
Aug 8, 2020
Messages
8
Reaction score
6
Location
Connecticut
Vehicle(s)
'18 Chrysler 300S, '89 Toyota MR2, '09 Altima
We mostly use a Manheim average known as MMR..that is a dealer subscription based service that is regional and tells us
what the vehicle is selling for at auction​
what dealers are asking for them in the area​
what the vehicles actually sold for retailed​
how many in the area (saturation)​
average days to sell..​
So if you look online for a Silverado for instance in Iowa the saturation is high, days on lot are high and they retail for less than market value..that vehicle is not one you would stretch the value upwards on...

Same scenario with a Wrangler, sell fast, for more than book, high demand, low numbers for sale, that is one that you may put more in to get on the lot..

The books online are somewhat accurate, too many rely upon those numbers however and use the highest values...if you are critical thinking about evaluating your car it can be a good guide.
Cool info. I had no idea. Thanks!
 
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