So you want to buy a new or used car.
But you currently own a car that you still owe on. Should you sell it yourself or trade it in? How can you negotiate the best deal? What do you need to negotiate a good trade?
Truthfully, if you sell your vehicle privately, chances are that you will get more money. But it takes a significant amount of work and will take much longer to find a buyer and settle on a deal than if you trade in your vehicle at a dealership.
Trade-ins at a dealership typically result in less profit than if you sell privately because the dealership takes into account how much any repairs or reconditioning will cost in order to resell. Plus, you are taking a hit simply because of convenience. Let’s take a look to see how a trade-in at a dealership can be handled and some tips to get the most out of your experience.
Tips for Trading In a Vehicle
1. Appraise Your Vehicle’s Worth
Before stepping foot into a dealership, do some research. Be sure to know how much your car is worth, and know that there is a wide range of accepted trade-in values. Using tools like Kelley Blue Book and Edmund’s Car Appraisal Tool will give you a good indication of what you can expect to get back from your vehicle during a trade-in. Print out your appraisal and take it with you when you go to shop for a new car.
It’s important that you are honest regarding your vehicle’s service history, the amenities your vehicle offers, and the current condition of your vehicle in order to get an accurate estimate. Very few cars are in “outstanding” condition and most fall within the “good” condition category. If you are really unsure, it’s better to undersell the condition – err on the side of caution.
2. Shop Around
Not every dealership is going to offer you the same amount for your trade-in, so it’s okay to shop around until you find a dealership that offers you a deal you are comfortable with. This will all depend on the dealership’s current inventory, their need for pre-owned vehicles, and how likely they feel the car will resell. Auto industry professionals recommend taking your car to a dealership that does not sell your make or model (For example, taking your Ford to a Nissan dealership) because then you are not competing against other vehicles just like your own.
3. Season Appropriate Trade-In
As crazy as it sounds, make sure you are trading in your vehicle during the correct season. For instance, trying to trade-in a convertible during the winter will get you less money during the winter months than an all-wheel drive vehicle. Following automotive trends and news can help you determine when the best time of year is to trade-in your vehicle, and can also help steer you in the right direction regarding where to take your car for a trade-in. Car trends change weekly, so going to the dealership at just the right time could affect the value of your vehicle.
4. “Curb Appeal” is Real
Don’t take a filthy vehicle to trade-in. The best advice is to detail, detail, detail! From top to bottom, make sure your vehicle is best aesthetic condition. This will show a dealership that the vehicle has been well maintained and may get your a higher estimated value. Getting a fresh coat of wax, shiny tires and rims, and making sure your interior is spic-n-span clean make your trade-in vehicle much more appealing than a vehicle that has a dull exterior and crumbs all over the backseat.
5. Have All the Right Documentation
Save yourself time and a lot of stress if you show up to a dealership with all your vehicle’s documentation. Make sure you have your title if you own the vehicle outright, or if you still owe, bring all the loan documentation. This ensures you are responsible for the vehicle and have the legal authority to trade it in. Also bring any and all maintenance documents you have from your vehicle’s service history – this can help your trade-in value by describing all the service that has been done to your vehicle. Have the documents that came with your vehicle on hand when you go to negotiate your trade-in. This includes the user manual, any buyer contracts, and original information about the vehicle. This will all help the value of your vehicle and make the process much smoother.
Common Trade-In Mistakes
Overestimating Your Vehicle’s Worth
It’s common to have some sentimentality when it comes to your vehicle. Perhaps it was the first car you ever bought. Or the vehicle that you took cross country after graduation where you started a new job. Or maybe it’s the car that drove you to the hospital to have your first child. Regardless of the personal value the vehicle has to you, to a dealership, it’s just another vehicle. Overestimating the value of your vehicle will only hurt your chances of getting the best possible amount for a trade-in.
Dumping Money into Repairs
Spending a ton of money on repairs prior to trading your vehicle in may SEEM like a good idea, but in reality, you will lose money in the process. Dealerships have access to make the same repairs at much cheaper costs, so whereas the trade-in value may be slightly less than a KBB estimate, it’ll save you money from making unnecessary repairs.
Failure to Negotiate
Without negotiating your trade-in, you risk losing a good amount of money. Go into a negotiation with an idea of how much you want for your trade-in and what you’re willing to bend on. If you are not offered something within your range, then shop around and go to a different dealership. If you are unable to negotiate a price that you are happy with, try negotiating a deal for benefits like oil changes and other maintenance services.