I never said you're tied to the car or are unable to walk away from the contract early via VT.
I'm just thinking that if you like the car and complete the term (with it in good condition and under the agreed miles) then it's usually used as bait to be deposit for a new contract. so, the only way to get the maximum "trade in" value for the car is to get quotes from other dealers/companies and if they'll offer something better as trade in than your existing dealer's roll-over deposit - if that's the case then you need to pay the balloon and move on... Surely it's the only way to have any leverage to get a good deal? If you don't pay the balloon then you either walk away with nothing or you're stuck with the next "amazing" deal from the same dealer, who'll do a special and write off the existing debt/fees, as long as you can sign up for the next one? (or am I too cynical?!?)
The one thing I'd say with regards to trade in values is some dealerships just play with figures.
Every dealership sings from the same hymn sheet with regards to value, your car is worth what it's worth. If you find a dealership that gives you say £1000 more trade in value, they won't be standing the car in for more. They tend to use finance contributions or discounts to artificially inflate the part exchange value.
So let's say a customers car is worth £3000 at CAP average, they're looking at a car priced at £10,000, where we have £500 to play with, we could say we'll give £3500 for their part exchange so they have a cost to change of £6500. Or we could say we'll give £3000 and sell our car at £9500 which is still a £6500 cost to change.
Even if a dealer says they'll give £4500 for the £3000 car, by using the £1000 deposit contribution, and £500 to play with, they have to stand the car in at it's true value for when it goes to auction etc. Any sales manager seen to be paying above "book value" for part exchanges, and then constantly making losses at auction would be out of a job quite quickly.
So let's say you were going to various dealers and one of them offered you a "super part exchange value" by over £1500 more than other dealers, I'd bet my life on it that the order forms would NOT show your part exchange value being £1500 more, they'd just be getting to that cost to change by discounting the car they're selling.
My sales manager is always looking to write some business, if a customer walks in and is upside down, we always look to do what we can to get the business, standing their car in as much as possible, and using deposit contributions. Unfortunately with so many people not having any equity in their cars, the way we can do the "best" deal is by taking the part exchange out of the equation, e.g handing the car back.
Regardless of all of the above, the best deal any customer is going to get is when we're short of our target. In February for example we were short 3 new cars, my sales manager was losing money on deals to hit the target (to get his bonus). The end of the month is usually the best time to come in, although some dealerships operate differently.
Some do "normal" deals and then pee the profit out of the front end and back end to hit their target, and others do that at the start of the month and sell "normal" deals for the remainder of the month.
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