When it’s time for you to part ways with your old car to make way for a new one, trading it in might be your best option. One of the quick and easy ways is to trade it in to the dealership where you are purchasing your next car. If you trade your used vehicle in at a dealership, they’ll take care of the paperwork for you. But you shouldn’t just accept the first offer someone makes for your old car. It is better for you to take your car to no fewer than three dealerships and see what they can offer you.
And before you head to your local dealership, there are a few things you need to do.
To get the most money for your trade-in, it pays not only to rev up your vehicle’s appeal but also conduct a little research on your vehicle’s trade-in value and learn some negotiation skills.
When’s the best time to trade-in your car?
Just as shoppers look forward to the best time to buy a car, you also want to know the best time to trade in your old vehicle.
Unlike selling vehicles to private buyers, it takes much less time to “swap” your car to the dealership. The whole process can take just a day.
However, you should know that generally, you will get less money from trading in your car than if you will sell it yourself. There are several things that car dealers take into account. Being aware of these factors will help set your expectations over the price you’ll be offered at the dealership.
Your car model year
We often think of the condition of our cars as a major predictor of their trade-in prices.
Actually, it’s not. It’s not even the mileage.
It’s the car model year. If your vehicle is a few years from “new”, you’re likely to be paid 60-70% of its original price even if you racked up the miles.
Cars that are 5 years older or more will be sold for less whether they have been babied or not. While older cars get sold pretty fast at car dealerships, the newer your car is, the better.
The make and model of your car is also a factor to consider. If your car holds value or is popular among consumers, you’re in luck.
Car mods can either have a positive or negative impact on your vehicle’s trade-in price.
Generally, if the mods are not made by the OEM, the trade-in price is likely to go down. Take note of this if you have plans of trading in your new car in the future.
Aftermarket custom wheels are safer mods and don’t necessarily affect the car’s trade-in value.
Your existing car loan
If you took a loan to purchase your car and you still have a balance to pay, now isn’t the perfect time to trade in your vehicle.
If the amount you owe exceeds the car’s value, you’ll end up paying for two cars at the same time.
For example, if you have a car loan balance of $25,000 and your car only has a market value of $20,000, you have $5,000 negative equity (also called underwater car loan). This makes things a lot worse.
If, however, your car loan balance is lower than its trade-in value, consider it a green light.
The Art of Trade-in Negotiation
Тhe most responsible part of buying a new car is negotiating with the dealer. To get the most money from your trade-in, you need to learn how to negotiate with car dealers.
Keep in mind that the dealer will want to buy your car for as little as possible. So when you go to the dealership, you better come prepared. Know what you want before you walk into the dealership.
Determine your car’s trade-in value
Before you hear it from the dealer, it’s best to conduct your research and have a realistic idea of what your car’s value actually is. Once you’ve determined what the car is worth, you can set your own trade-in price.
Car dealerships use different sources for assessing the trade-in value of a car. Three of the most popular sources are the Kelley Blue Book car value, NADA Trade-in Value, and the Edmunds Trade-In Value.
The actual trade-in price from your dealership may not be the same as what is provided by any of these sources, but the figure shouldn’t be far.
Get quotes from several car dealers
Don’t settle on one dealership. Get as many quotes as you can. Email car dealerships in your area if you can’t visit them. Just make sure you have all the information they’d need, including photos of your car.
You can also check sites that provide online appraisals for trade-in cars. There are plenty of them.
Once you decide where to buy your new car, use the highest figure as the basis for the trade-in negotiation. Don’t wait for the car dealer to inform you of their asking price. Be confident with your price. The negotiation starts from there.
Give your car a facelift and fix a small problems
When you bring your car to the dealership, you want it to look presentable and appealing as possible. Fix minor scratches and dents, get it waxed, vacuum the interior and make sure that everything is in good working order. Giving your car a facelift can boost its trade-in value and can make it more desirable in a salesman’s eyes.
Here are more tips to increase your car’s curb appeal:
- Check and clean the engine. A rag and household cleaner can do wonders
- Wash the exterior
- Polish the tires and clean all the glass inside and out
- Remove all clutter and empty the compartments of your car
- Wash and vacuum carpets
- Perform inexpensive repairs like replacing hazy headlights, filthy air filters, or missing knobs
- Empty and clean the trunk
- Make sure your spare tire is not flat
- Also a new battery charger may convince that your car is well maintained
Don’t forget to provide the dealership a copy of your service documentation. Any maintenance work you’ve done, from fluid changes to repaints and body repairs, should be included. This tells your dealer the care the vehicle it received under your ownership.
Keep the trade-in price negotiation separate from the new car’s price.
Some dealerships will try to hide the vehicle’s trade-in price by combining it with the price of the new car. They’ll try to lure you into believing you’re getting a good deal by presenting attractive monthly terms. Without you knowing, they’ve jacked up the price of your new car.
So the last yet most important tip – keep the negotiation for the trade-in separate from buying a new car. Once the dealer has agreed on a trade-in price, ask for it in writing. Also, ask if they will still honor the price even if you purchase your new car from a different dealer.
Don’t let the car dealer decide solely on the trade-in price. With a little bit of research, price comparison, and some minor legwork, you’re off to get the most money for your trade-in. Best, you’ll be able to buy the car you want at a great price as well.