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E ND | Well, we all know you don't have to buy their new machine and they don't have to buy your trade. It's a free market economy but I understand it's not always accepted. Keep in mind everyone wants to keep the dealer out of it and sell their own trade for "retail" in a hot market when it's easy to sell yourself and then wants to make the dealer trade it for a premium when things tighten up.
Is it good business? That depends. Most dealers will take anything in on trade (or buy it for that matter) at the right price. The "we aren't taking trades" dealers are usually taking that position for a very specific reason because as Chris mentioned used equipment is normally a good business. I mentioned it in a previous post reply but interest rates and borrowing caps are hitting a lot of dealers of all sizes right now and with used equipment values slipping it doesn't take much to put owners in a very precarious position with their lenders - they're trying to reduce inventory and make cash, not bury the profit in a trade that may lose them money.
I'm assuming your trade was of a specific make/model/category that is dropping in price and they're already choking on too many of them and management is saying "no more" until they can get some of the old inventory moved and figure out where the market is. Was it a tractor or a seasonal implement? That also makes a huge difference right now with out of season equipment in a falling market on top of high interest rates - sometimes you just can't buy it low enough (without offending a customer) to run it through the shop, sit on it for 6-9 months and retail it for a profit.
I don't really understand the position some dealers take putting an age limit on trades, unless we're talking seriously vintage (but not yet antique) trades. I can get behind a policy saying we don't take trades older than 30 years but 5-15yr old used equipment is a pretty good market.
Good dealers don't show you two prices based on trade or no trade, so not sure who's offering or expecting a discount on a new machine with no trade. I can see it on the used side to offer an out the door lower price with no trade because the dealer is locking in their profit and "cashing out" of that trade cycle. | |
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Dealerships
