If you aren’t familiar with a dealer trade, it occurs in a situation where the dealership you’re visiting doesn’t have the exact model of car you want, but they can swap with another dealer to get it to their lot. So, what makes this different from buying a typical car and does it really matter in the end? We’ll go over all this information, including the pros and cons of going through with a dealer trade so that you can make the best decision.
How a Dealer Trade Works
A dealer trade, or swap, is an exchange of vehicles between dealers. Having this opportunity open allows a car lot the chance to gain the business of someone who steps on the lot, even if they do not currently have the car the buyer wants in stock. Salespeople will do everything they can to keep a consumer on their property, as they want that business to go to them and not another dealer down the street or across town.
Dealers often have relationships with other dealers who also do these trades. If they do not have the car but it’s available elsewhere, they get in contact with the other dealer and swap vehicles. This is most commonly done with vehicles that are similar in terms of type and features. Other times, they may provide a car and then save the favor for the next time their own dealership needs a particular car that is unavailable.
Price Negotiation
You may wonder if a price negotiation is possible with a dealer swap and the short answer is yes. However, it’s important to do your negotiation before the trade occurs. You should make an offer just like you would if the vehicle was there for you to look at. After you settle on a price that works for the buyer and seller, be sure to get the information in writing. You should also get in writing that your deposit is refundable, just in case things don’t work out the way you would like.
Pros & Cons
As with anything, there are pros and cons associated with a dealer trade. We’ll go over the most important of these below:
Pros:
- Quick – By choosing a dealer trade you can get things done fast and easy. You won’t have to go to other lots hoping to find the car you want. You also won’t have to custom order it and wait a significant time for it to be available.
- Convenient – The dealer is finding the exact vehicle you want for you, which means you don’t have to do it yourself. This lets you save time and energy that would otherwise be expended searching on your own.
- Local – With a dealer swap you don’t have to search high and low or drive out of town to negotiate a price. You can stick with a local dealership and simply let them take care of the legwork.
Cons:
- Price – The dealer with the vehicle is in a better position in this case, of that there is no doubt. Searching on your own or visiting multiple dealerships may save you money.
- Limited options – Not every vehicle will be available for a dealer trade. This is especially true if you’re looking for a car that is available only in limited numbers or is in high demand.
- No guarantee – Sometimes a dealer may not be able to get the vehicle you want at all, which means you’re going to spend time waiting while they make cars and look for options. This means you might end up elsewhere anyway, defeating part of the purpose of a swap in the first place.
- Blind swaps – You may not always have the opportunity to look at the car you’re buying until after the trade is complete. If you do stop by the dealership with the car, they will often try to convince you to simply buy it there.
When it comes down to it, deciding whether a dealer swap is a good option is highly personal. For some, it frees up time and energy, which is worthwhile. For others, checking out other dealerships for potentially cheaper cars may be more important. Just be aware of what a dealer trade entails, so you know how to handle it if it’s something offered to you.
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