If a customer is in the market to purchase a new or used vehicle, he probably has a car or truck that he wants to trade in. While he may have surfed the net and completed his search about what vehicle to buy, what dealers to consider, prices and other concerns, there are several important steps that he should take to maximize the trade in allowance that his dealer will give him.
Steps to Trade In Your Car
While the customer may not need to purchase a Carfax report on his own vehicle, the dealer most probably will. The customer must be aware of any reported accidents or damage, as the dealer will want to use that data to justify a low appraisal value. In this regard, the customer must be realistic in his expectations.
There are several things that the customer can and should do to maximize the appraisal price. He should google his own vehicle to see what dealers are asking for comparable vehicles. The appraisal value quoted will not be the retail asking prices he sees online; rather he will receive a wholesale price- one much closer to the auction prices that the dealer might pay at a used car auction. And, that number will be further reduced by any mechanical, body, or appearance work the vehicle needs. In this regard, the customer should have the vehicle as clean and shiny as possible. Make it easy for the appraiser to like the car or truck. Don’t give him any reason to knock the trade in value.
The appraiser will also be looking at prices online, both retail prices asked by other dealers, and wholesale activity for similar models. Again, his final appraisal price will be reduced by any reconditioning that is needed. If the customer has repair orders proving that the vehicle has been well maintained, and that all needed repairs were done, this should support a more favorable valuation.
Fixing a value on the trade in is just as important as fixing the value on the vehicle to be purchased. Most customers spend too much time worrying about the price to be paid for the new vehicle, and not enough time justifying the highest possible trade appraisal.
The dealer will want to know if the customer has the title to his vehicle. If not, the dealer will call the bank or finance company to ascertain the unpaid balance on the auto loan. Any amount still owing will be subtracted from the appraisal. If the lien payoff is greater than the appraisal value, the customer will need to pay the overage.
If the customer has a vehicle service contract or extended warrantyon his vehicle that has not expired, he can request a cancellation of the contract and obtain a pro rata refund. If 80% of the time or mileage has expired, he should receive a 20% refund of the price he paid years ago. This would help meet his required down payment. The fact that he had a service contract or extended warranty will give the appraiser some confidence that the vehicle should be free of any major problems.