Home Lifestyle How to Maximize Your Car’s Trade-in Value

How to Maximize Your Car’s Trade-in Value

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If you’re in the market to buy a new car, one of the options available to you is to trade in your current car to an auto dealer. On the face of it, trade-ins are a quick and easy way to get rid of your old used car. Sounds like a great deal way to avoid going through the big hassle of selling your old car.

The trouble is, dealers are experienced at getting the best deal which may not exactly be to your benefit, especially if you’re not clued in on how dealerships work.

In any case, let’s start by looking at the advantages of trading-in your used car.

Advantages of Trading In Your Car

You only deal with the dealer.

If you’re no good at selling to strangers or don’t have the time to market your car, then you’ll love the convenience of the trade-in process. You only deal with the dealer who handles the entire transaction from start to finish. All you need to do is negotiate the deal, and you’re one step closer to getting your new car. This is probably the biggest advantage of trading in your car.

It’s quick and easy.

Selling your car is not an easy or straightforward process. You’ll need some sort of insurance while you are selling your car. You will also need to spend time answering the phone and deal with car inspections from savvy buyers. The entire process could take months. Trading-in your car could take place in a matter of hours.

It reduces the price of your new car.

If your car is fully paid up, the dealership will apply the credit for the trade-in amount towards the cost of your new car. This means if you purchase a car for $20 and the dealership values your car at $8,000 you only need a loan for $12,000. You also pay less in sales tax.

It is convenient if your car isn’t worth much.

If your car is quite old and you know you’re never going to get a lot for it, you might be better off trading in the car as a dealer can simply sell the car at their next auction.

Disadvantages of Trading in Your Car

Despite the advantages, trading in your car is not always the best option, especially if you’re not aware of all of the pitfalls. Here are reasons why.

You’ll likely get less money for your car.

Although trading in your car to purchase a new one is quick, easy and convenient, the biggest disadvantage is that as long as your car is in good condition, you are likely to get much more if you sell it privately.

The amount offered by dealerships is always going to be much less than what you could get if you are ready to go through the trouble of selling it yourself. Sometimes, this difference can actually run into thousands.

You’re limiting your options.

When you agree to trade-in your vehicle to one dealership, you’re be obligated to buy your next car from that dealership even if you happen to find a better deal elsewhere.

Helpful tips on getting the best trade-in value for your car

If you have come to the conclusion that trading in your car is the best option, follow these tips to get the best trade-in value:

Clean up the car.

Ensure that the your trade-in car is in excellent condition before you get it appraised. During the appraisal, the appraiser will do their best to find faults with everything in the vehicle in order to lower its value. So, before you take it in, wipe down every bit of vinyl and plastic in the interior with spray cleaner.

Get rid of any unpleasant smells such as pet or smoke odors. If necessary, take it to a detailing shop to get a thorough cleaning. Give the bodywork a thorough wash and take care of any scratches or dents that you find on the bodywork.

Find out your car’s trade-in value.

Use NerdWallet’s car value tool to get the private-party price and as well as the trade-in price range of the car. You can also use use the Edmunds car appraisal tool and look for the trade-in True Market Value. Once you have these figures, you can set a target trade-in price range for the negotiations.

Take maintenance records with you.

If you’ve kept the car’s maintenance records, bring them with you. But don’t waste money on servicing or repairs. The dealer is likely to use a chart based on model year, options package and mileage when working out the car’s worth. Just make sure the car is clean and decent looking, and you’re good to go.

Separately negotiate the trade-in value and the new car value.

Do not bring up your trade-in until you have finalized negotiations for the car you’re interested in buying, and are happy with the deal. If you can, ask for the asking price in writing on a buyer’s order. Once you’re confident that you’ve got the best price on the car, you can now negotiate your trade-in car separately. This will leave the dealer with no choice but to give you an honest figure for car you are trading-in.

Do not let the dealership appraise the vehicle on their own.

Make sure you’re present when the appraiser takes your car on a test drive. The appraiser is most likely going to be getting paid by the dealership, and there’s no telling what he could do to lower its trade-in value.

The dealer’s appraisal of your trade in vehicle will be based on a wholesale price. Since they are in business to make money, the dealership cannot provide a retail price for your vehicle because he won’t be able to make any profit when he sells it.

When the appraisal is complete, ask to see a copy of the report.

Since you were present when the appraisal was being conducted, you can challenge any incorrect information in the report.

Never accept the first appraisal.

It is important to keep in mind that the appraisal value that the sales person will quote is very likely to be about $500.00 less than he is prepared to allow. This is why you should never accept the first appraisal. Ask for more than you expect to get for your trade-in and leave some room for negotiation. Dealers will want to pay the least amount they can get away with that is well below the net value of the trade-in. The appraisal amount is likely to be very low and if you don’t know what your car is worth, you are likely to accept any offer.

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Information Sources

Bankrate

NerdWallet

Money Advice Service

Edmunds

The Penny Hoarder

Finder.com

Credit Karma