When purchasing a new car, it’s helpful to have a vehicle that can trade vehicles you already own.
By trading in a car, you’ll no longer have much of the work of selling your vehicle, and you’ll be able to get home on a new ride, much faster than you would have had to sell your vehicle yourself. When you visit the dealership, research and be prepared to negotiate how valuable your car is.
How to trade by car
Doing your research will help you better understand how to trade in your car, so you will be able to maximize the amount your trade in will earn.
1. Find out how much your car is worth
Learn how to calculate the value of a car before trading on a vehicle. Knowing this number in advance may help you feel empowering when the time comes for negotiations and increasing your chances of getting a fair price.
Instead of waiting for the dealer to know what you think, do some research to understand the value of your car now. Free online rating tools like Kelley Blue Book and Edmunds can help you determine the value of your car. If available, use estimation tools that can provide a deeper sense of the dollars the car commands, based on the vehicle’s capabilities beyond make, model, year and mileage.
External factors can also affect the value of the vehicle. If gas prices are as high as they are now, cars that get better gas mileage may be in higher demand than heavy trucks.
2. Look at your finances
Car deals include more than the vehicle valuation. You also need to assess your finances and know how much priced cars can be on the other side of trade. You can also compare top lenders to get solid ideas for qualified loans.
If you are trading on a car on a loan, we will determine whether the value of the transaction is sufficient to repay the remaining balance. Compare that number with the trade-in value of your car by contacting your lender to see the payoff amount and visiting multiple dealers to request a trade-in estimate.
If the dealer offers to pay back your loan for you, you will likely add a payoff amount to your new loan for your next vehicle. This is called involving your car loan and can lead to difficult financial situations in the future.
3. Seeking offers from multiple dealers
You don’t need to go to the dealer to start the trade-in process. Instead, you can come to you at a price to the dealer. Many online value estimators, such as Kelley Blue Book and Truecar, are linked to dealers provided based on the information you share about your vehicle. You can then use these online quotes to negotiate with your dealer to ensure the best possible deal.
Once you’re ready to negotiate, don’t forget that you don’t need to sell trade-in and buy a new car from the same dealer. Negotiate the transaction price separately from the purchase price for your next car. You can replace your car at one dealer and then buy it from another to maximize your savings.
Remember that you don’t need to accept the initial transaction amount proposed by the dealer. Dealers usually start by offering the lowest possible price, so you can negotiate the trade-in value of your car. Tell the dealer that the price appears to be too low based on offers from other dealers and the value they find in research.
4. Prepare the car for trade
If you keep up with normal car maintenance costs, you will need to receive a better price with trade-in. It will help you spend extra time cleaning the interior and exterior of your car and increase the trade-in value of your car.
“Make sure your car is clean and if you’ve bought it, you’re presenting it to the point you want to receive it,” says Alain Nana-Sinkam, Chief Industry Analyst at Truecar. “Also, if there are minor defects that you were planning to fix before the transaction, make sure you get your car to the dealer as you reported and as they expect it.”
5. Make a reservation with the dealer
Car dealers can be a busy place, so book in advance to save time. The dealer will evaluate your vehicle and make sure all the information you submit online is correct.
“We’re looking forward to seeing you in the world,” said Joe McCloskey, owner of McCloskey Motors in Colorado Springs, Colorado. “Most dealers will share this information with you. Having this information will help you better understand how and why dealers are assessing the value of your vehicle.”
Keep your research and documents handy and be prepared to negotiate – and if the dealer can’t provide you with a fair deal, you’ll leave. There’s no problem with shopping quotes at multiple dealers to get the best value for your trade-in.
Pros and cons of trading on a vehicle
Once you’ve decided how to trade with your car and what it’s worth, understand the advantages and disadvantages of selling your vehicle before you get to the dealer.
Conclusion
Knowing how to trade in a car rather than selling yourself can streamline the process of entering a new vehicle. To maximize the value of your trade-in, start by researching the value of your car with a free online car estimator.
Before heading to the dealer, clean your car deeply and do some cost-effective minor repairs. Also, don’t forget that you can get offers from multiple dealers and negotiate trade-in prices.
In addition to shopping for the best value for trade-in, compare car loan fees to know exactly how much your next car will cost.
