Know Your Car’s Value
The biggest mistake people make is simply not knowing what their car is worth. You should be knowledgeable when it comes to making a transaction with the dealer. Pretend that you are a buyer and look up your vehicle and see what others in your area are asking for it. This will help give you an idea of what your local market will bear.
This information is easy to get. There are many resources like Kelley Blue Book and Edmunds.com that you can use to determine your trade-in value. The information is free and only takes a few minutes to look up online.
Once you know your car’s value, be honest on its assessment and overall condition and mileage. Also, cleaning your car will help, so get it nice and shiny before driving it over to the dealer. A good cleaning may help you get the book value for the car, but don’t expect to get more than it is worth.
Understand the Dealer
It is up to the dealer to accept your trade-in, so it is important to understand their perspective in order to get more for your trade-in. One of the key dealer concerns is how quickly they believe they can sell your car to someone else. They will often do a walk around and examine the paint, see if any damage exists, and then do a test drive to see what repairs need to be made to get it up to retail value. If they determine it will cost too much to repair, they may opt for no trade.
Typically, for resale, a dealer looks to make between two and four percent on a transaction. So, you need to account for your car’s value and add in whatever it will cost to refurbish it. Then add in two to four percent and if you are within that window, you are likely getting a good deal.
Also, newer cars on trade-in can be problematic. If your trade-in is about the same as a new car, but they have incentives on the new one, it could be more expensive for the dealer to sell the used car. So, if you are trying to trade-in a used car that is only a year or two old, it is a good idea to compare your car’s value to the dealer’s inventory and their current incentives.
Separate New Car Transaction from Trade-in
As much as possible, do not let the value you get for trade-in effect the transaction for your new car. If you feel you want more for your trade-in than what they quote, the dealer may give you what you are looking for, but they may do so by boosting other variables to make up the difference.
One way to keep your trade negotiations separate from your financing negotiations is to get a loan from another bank or credit union. That way you are not dependent on the dealer for financing. But, you should know what the current auto loan rates are so you can make an informed decision.
Shop More Than One Dealer
Do not tie yourself to one dealer. You are not obligated to buy from the first dealership who offers you a trade-in. If you cannot agree on price and financing, walk away. And, if you have done your homework, you will know if walking away is, indeed, warranted.
Taking your car to a couple of places, while it seems like a hassle, will give you a great feel for the market. Also, depending on what cars are on the dealers’ lots, can impact the value they will give you for your trade-in. If one dealer has a car like yours, but they have been unable to sell it, they may not give you as much for it as another dealer who may have a lot full of other types of vehicles.
How to Use This Information
If you are in the market for a new car, we hope that these steps will help you get more for your trade-in. You can always sell privately, but that can be a hassle. And, if you are looking to trade-in, but need some new paint or would like to get some dents repaired, we can help and get your car looking like new. Call us at 303-344-2212 or contact us online.
