As part of your car buying process, you may be interested in trading in your old car. Considering a trade-in is the simplest way to dispose of your current car. Making sure you know the value of your trade-in and the process the dealer will follow will be helpful. Here are a few guidelines to get the best deal:
Try to maximize your car’s worth by sprucing up your trade-in before heading off to the dealer. Throw away trash, clean out your belongings and clean the exterior and interior before you go. If you have maintenance records, bring them with you.
The salesperson may take you through a questionnaire about your vehicle, including maintenance, accidents (if any), parts that have been replaced, etc. This gives them a little more insight into your car. Be honest but brief. Let them draw their own conclusions at inspection. If, however, you’ve made notable improvements to the car or have recently purchased new tires, for example, make sure they know about those improvements.
The dealer will know about any significant damage to the car when they pull your Car Fax report, so be honest if you’ve had accidents. You are not required to provide your own assessment of any noises you hear, performance issues you suspect or if normal wear is starting to show.
The appraiser will assess your car visually and will likely conduct a test drive to assess its mechanical condition. Let them do their job.
Before you set foot in the dealership, you should get an idea of how much your trade-in is really worth. Using an online source like our Member Showroom, you can self-report your car’s mileage, features and condition to receive an estimated value. Be sure you’re requesting a trade-in value. Even if you think your car is in perfect condition, you should probably still rate your car as “Good.” Or, rate it both “Excellent” and “Good” for comparison. In most cases, a dealer will offer less than the estimated trade-in value to offset their cost of readying the car for resale. A trade-in does not usually receive top dollar; however, it’s more convenient and less risky than selling the car yourself.
Now that you have a target price for what you can expect to receive, you are armed with a little negotiating power. Use that number as a starting point. I would recommend adding a bit to that price and tell the salesperson what you’d like to receive prior to them looking at your car. You may never speak directly with the appraiser, but your salesperson can negotiate on your behalf. Be confident and honest with the salesperson.
The dealer is probably more interested in moving a new car off their lot then haggling over the minutia of your trade in. Plus, used cars can be very profitable for dealerships, so go ahead and negotiate for more than their initial offer. There is usually middle ground between your expectations and their first offer. You may be at the mercy of the dealer’s marketing knowledge, meaning they will pay more for a car that they know they can resell quickly and easily.
Keep in mind, though, dealers know the game better than you do. The trade-in is one piece of the deal, along with the new car purchase, after market accessories (extended warranties, wheels, protections, etc.) and financing. Treat each piece as a separate deal to ensure you don’t overpay.
Trading in is a great option for many car buyers. It eliminates the headache and expense of selling a used car, plus the dealer takes care of all the DMV paperwork! Enjoy the simplicity. Good luck with your car shopping.
by Bob, Vice President, Lending