News from Oakland Harley-Davidson

Why Is the Difference Price Important?

Posted by Oakland H-D Contributor on Apr 20, 2017 1:00:00 PM

If you have a trade, why is the difference price important? We'll run you through a few scenarios to help you make sure that you are getting the right deal when negotiating a new (or pre-owned) motorcycle. 

The difference price is the total price of the bike, plus dealer fee, sales tax, and licensing (the out the door price, OTD.) minus the equity in your trade.

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Let’s say you walk in to dealership ABC, they tell you the out the door price of your new Harley-Davidson is $20,000, we are going to use round numbers because it’s easier for me to do the math. Then they tell you that the value of your trade is $6,000. That gives you a difference price of $14,000.

New bike OTD                $20,000

Trade value                       $6,000

Difference price              $14,000

Now wait one darn minute! That trade-in has been with you it’s whole life, you went to Sturgis on that bike!  You met your wife on that bike!  You met your new wife on that darn bike!  Dealer XYZ told you on the phone they would give you 10,000 for it so you are going to sell it to someone who appreciates what you have! 

Dealer XYZ sits down with you to go over numbers, and low and behold, they do it! Right there in black and white, $10,000 for your trade, but wait a second, it looks like the OTD price of your new bike is $25,000… no big deal, you got what you were looking for on your trade so let’s move on and sign some paperwork!

New bike OTD                $25,000

Trade value                    $10,000

Difference price            $15,000

This is just one way dealerships can move numbers around to show you what you think you want to see. Your difference price is the number that doesn’t lie.  It is the real dollars and cents of what you are paying.  When I am shopping for a car I never look at the trade value and always go with the dealership that gives me the best difference price.  I’d take $1.00 as long as the rest of the deal makes sense. 

New Bike OTD          $14,000

Trade value                        $1

Difference Price      $13,999

Of the three deals that last one is truly the best because it has the lowest difference price.  If your dealership is giving you the best trade value but not willing to show you the difference price, stop by Oakland Harley-Davidson and see why we make all the difference.

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*EDITOR'S NOTE: Original post had a typo in the trade value price in the first example. Apologies to the author for being misrepresented. Kudos to our math-savvy customers for catching the mistake. Thanks for keeping our marketing team honest.

Ready for more information on buying a motorcycle? We've compiled some of our most popular articles into The Definitive Guide to Buying a Motorcycle.

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Topics: Oakland H-D News, Motorcycles, Finance and Insurance

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