“Overtrade”

[Wenlinz]

Hi, newbie here.

I was quoted an Overtrade amount to offset from my DP when I approach a local AD to sell my existing car as part of my consideration to buy a new model from the same local AD.

Question-1: while I understand the Overtrade help ease my DP amount (and increase my bank loan amount), I am wondering does Overtrade amount works only if I trade-in an old car with the seller?

what if I decided to sell/de-register the car on my own, take the cash (after settling my outstanding bank loan)....and say comes back two months later to buy the new car, would the Overtrade concept still apply? 
 

Question-2: Why Overtrade amount varies (up to 10k!) when I asked for the nett price for different models from the same distributor?

 

[macrosszero]

14 minutes ago, Wenlinz said:

Hi, newbie here.

I was quoted an Overtrade amount to offset from my DP when I approach a local AD to sell my existing car as part of my consideration to buy a new model from the same local AD.

Question-1: while I understand the Overtrade help ease my DP amount (and increase my bank loan amount), I am wondering does Overtrade amount works only if I trade-in an old car with the seller?

what if I decided to sell/de-register the car on my own, take the cash (after settling my outstanding bank loan)....and say comes back two months later to buy the new car, would the Overtrade concept still apply? 
 

Question-2: Why Overtrade amount varies (up to 10k!) when I asked for the nett price for different models from the same distributor?

 

Basically they are inflating the value of the car that you are trading in to qualify you for a bigger loan so that you can buy a more expensive car than you can currently afford.

A bigger loan means more commissions, so everyone wins except you who has to service the installments. 

[Ct3833]

26 minutes ago, Wenlinz said:

Hi, newbie here.

I was quoted an Overtrade amount to offset from my DP when I approach a local AD to sell my existing car as part of my consideration to buy a new model from the same local AD.

Question-1: while I understand the Overtrade help ease my DP amount (and increase my bank loan amount), I am wondering does Overtrade amount works only if I trade-in an old car with the seller?

what if I decided to sell/de-register the car on my own, take the cash (after settling my outstanding bank loan)....and say comes back two months later to buy the new car, would the Overtrade concept still apply? 
 

Question-2: Why Overtrade amount varies (up to 10k!) when I asked for the nett price for different models from the same distributor?

 

If you do not have a car, you wont get the overtrade , this is how a dealer 1. Overcome the MAS loophole so as to give you more loan, without overtrade as an excuse, they cant do that too openly. 2. Is for them to maintain a high list price  to give the impression to the market of their premium price. 

A few reasons on why the different overtrade , some models have higher margin, can afford to give more overtrade,  some are more popular , no need to give more overtrade.  

Edited March 3, 2021 by Ct3833

[kelaihoyin]

48 minutes ago, Ct3833 said:

If you do not have a car, you wont get the overtrade , this is how a dealer 1. Overcome the MAS loophole so as to give you more loan, without overtrade as an excuse, they cant do that too openly. 2. Is for them to maintain a high list price  to give the impression to the market of their premium price. 

A few reasons on why the different overtrade , some models have higher margin, can afford to give more overtrade,  some are more popular , no need to give more overtrade.  

An accidental one or a deliberate one 😅

 

[Mkl22]

42 minutes ago, kelaihoyin said:

An accidental one or a deliberate one 😅

 

Of course deliberate la. It’s all about the money. Else who pays for your coffee  and nice showroom.😝

for me it is all about the car. Don’t care about showroom or the salesman. If I can pay less without them, all the better. That’s why Tesla will be a game changer for customers like me. Don’t need salesman to bulls**t me. I already know what I want and need. Just cash and carry. 

Edited March 3, 2021 by Mkl22

[Ct3833]

36 minutes ago, Mkl22 said:

Of course deliberate la. It’s all about the money. Else who pays for your coffee  and nice showroom.😝

for me it is all about the car. Don’t care about showroom or the salesman. If I can pay less without them, all the better. That’s why Tesla will be a game changer for customers like me. Don’t need salesman to bulls**t me. I already know what I want and need. Just cash and carry. 

Tesla smelly smelly a few hundred k, lich man spotted 😀😀 i will look for one with Tesla sales model but not a Tesla 😅

Edited March 3, 2021 by Ct3833

[ER-3682]

If don't take Loan,still can Overtrade my Old Car $10,000.?I don't think so.

[Chongster]

Can negotiate for the minimum loan and tenor.  As with all things in life, whoever wants it more loses...

[inlinesix]

8 hours ago, Ct3833 said:

Tesla smelly smelly a few hundred k, lich man spotted 😀😀 i will look for one with Tesla sales model but not a Tesla 😅

Base version Model 3 about 160k

[Voodooman]

1 hour ago, ER-3682 said:

If don't take Loan,still can Overtrade my Old Car $10,000.?I don't think so.

Overtrade is essentially taking in your car at above market rate (need to check, not all overtrade are real), nothing to do with the loan actually but of course salesman wants commission. 

[Mkl22]

9 hours ago, Ct3833 said:

Tesla smelly smelly a few hundred k, lich man spotted 😀😀 i will look for one with Tesla sales model but not a Tesla 😅

no money la. just TKSS only.  i drive a COE car ley...

[Spring]

To add on to what @Voodooman (OT nothing to do with loan) and @Ct3833 (high list price to give impression of premium price) mentioned which I agree, OT is basically a discount which dealer doesn't want to give outright so give it indirectly via OT.

Some reasons why dealers use OT are: 1) Don't want to upset earlier buyers who have paid higher prices when COE drops, 2) Feel good, psychological factor that u getting higher price for your existing car. 

I would advise to do your homework on what the value of the OT really is. Check out prices in sgcarmart for the same model and age of your existing car to get a fair value price. Hv to bear in mind that those prices advertised are seller's price though so hv to knock off few k from it. Another way to get a rough value is to get a quote from Car quotz n their competitors. 

With information on your car value, u can then know the true value of the OT and use this figure to deduct from the sell price of the new car to make an informed decision whether the overall package price is worth it or not. Good luck!

By the way, answer to your question 2 why OT varies for different new models sold are due to different margins. All things being equal, higher end models would normally have higher OT. That said, when models run out or there is a push by parent to promote certain models, even smaller margin models may attract higher OT.

11 hours ago, Wenlinz said:

Hi, newbie here.

I was quoted an Overtrade amount to offset from my DP when I approach a local AD to sell my existing car as part of my consideration to buy a new model from the same local AD.

Question-1: while I understand the Overtrade help ease my DP amount (and increase my bank loan amount), I am wondering does Overtrade amount works only if I trade-in an old car with the seller?

what if I decided to sell/de-register the car on my own, take the cash (after settling my outstanding bank loan)....and say comes back two months later to buy the new car, would the Overtrade concept still apply? 
 

Question-2: Why Overtrade amount varies (up to 10k!) when I asked for the nett price for different models from the same distributor?

 

 

[1fast1]

2 hours ago, ER-3682 said:

If don't take Loan,still can Overtrade my Old Car $10,000.?I don't think so.

Cycle (at least Merc AMG, not sure about the rest) prefers to give "discounts" in the form of elevating the trade-in offer rather than depressing the asking price for the new Merc. Regardless of loan/no loan. 

The offers can be upped by a LOT. Even 30 to 40k in some cases, not just a mere 10k. If you're buying the right (pricey, profitable) AMG model. 

I would not call that "overtrade" as the term has been tainted by its current usage to entrap buyers into a bigger/longer loan than they can comfortably service. A perpetual debt trap for steeply depreciating assets. 

Edited March 4, 2021 by Turboflat4

[Mkl22]

overtrade is a "feel good" discount. i tar it with the same brush as those "closing down sale" discounts.😁. so if one is not taken in by those discounts, then it is the same thing for overtrade.

Edited March 4, 2021 by Mkl22

[kermitfm]

All the comments given are valid. An overtrade means that the dealer will take the buyer's existing car at an amount $X above the 'market rate'. Market rate heer is whatever the price the trader who is buying the used car at and not necessarily what you may get in the open market if you sell it yourself. Overtrade is a tool that the dealers use depending on what the company wants to achieve. Some of these are:

1. As an encouragement to deal with their in house trade in vendor who will probably give a more depressed offer price sweetened by the overtrade;

2. To offer more cash incentive to the buyer - their downpayment will now include the overtrade amount on top of the used car value traded in;

3. To preserve the list price of their vehicles. This way they can retain the margins which they can use to offer discounts to the buyer to give them a feeling that they have got a good bargain.

There are probably other reasons but what is common here is that the overtrade is just another component in the sales price of the vehicles which buyers have to consider. At the end of the day, the buyer should look at the final sum one has to pay and do the comparison based on that.  You really cannot say that dealer A is better than dealer B because A gives a higher overtrade. Dealer A may quote a lower price for the trade-in vehicle, or he might have less insurance discount or require a higher minimum loan quantum requirement or a longer loan tenure. See how complicated it gets...

This also the second question, The overtrade amount is not dependent on the vehicle that is traded in but the new vehicle that is bought because it is a discount renamed as overtrade and more overtrade will be given to the model that has a higher margin or one which the dealer wants to push.  

 

[Etnt]

i've heard of some rare cases where they have been able to get the OT converted to straight discount, but those are extremely rare cases and shouldn't be taken as the norm.

These are the games that some dealer's play, and if one insist on no OT, then just don't get the car lor.

[Stratovarius]

1 hour ago, Voodooman said:

Overtrade is essentially taking in your car at above market rate (need to check, not all overtrade are real), nothing to do with the loan actually but of course salesman wants commission. 

i always thought whatever amount overtrade given will be added to the selling price of the new car. It basically reduces the DP and increases the loan amount. Am i wrong? 

[Etnt]

refer to the post above, this is the scenario 1, while several dealers are doing this for scenario 2 to maintain a high list price.

You can opt not to take the OT, but that doesn't affect the price they selling you.