Trading in a vehicle while you’re looking for your next car can be a lot to juggle, but we’ve got some tips to help you handle everything from the staging of your trade-in to the negotiation process.
Out With the Old and In With the New!
Trading in your vehicle is a good way to save money on your next loan. If your current car has equity, where you owe less on it than it’s worth, it can lower the selling price of your next vehicle. Simply use any money left over after you pay off your loan as a down payment on your next car. If you own your vehicle outright, then all of its trade-in value can be put toward your next one.
A down payment means a lower loan amount and smaller monthly payments on your auto loan. Additionally, down payments are required for many borrowers with less than perfect credit, so your trade-in could help you meet this lender stipulation!
Start With Some Quick Research
Look up your car’s value using online valuation sites to get an estimate of its trade-in value. Sites such as Kelley Blue Book, NADAguides, and Black Book are great online resources and a quick way to see what your vehicle is going for in both the private market (private/resale value) and at retail dealerships (trade-in value). However, remember that the dealer is the one that ultimately determines what your trade-in is worth to them – so online valuation sites are just a starting point.
Once you find a dealership that you want to work with, you can take your car to them for an appraisal. They’re likely to take it for a test drive, possibly get it inspected on site, and ask you questions about its history before they give an official offer. But before you jump the gun and head to a dealership, give your vehicle a little TLC to make a good impression.
Tips to Prep and Stage Your Car
You may have seen a staged home before; loaded with new furniture, cleaned and polished up, and decorated to the nines to lure in potential buyers. You can also stage your vehicle before you head to the dealership!
A clean car tells a dealer that it was well-taken care of. If you bring your car to the dealership covered in mud, it may make the dealer worry about what’s hiding underneath. Additionally, a vehicle that needs a lot of repairs is likely to result in a lower offer, since many trade-ins are prepped to be resold on the car lot. The less work your vehicle needs to be resold, the higher the offer you could get.
Follow these steps to make your trade-in more appealing:
- Throw away junk and trash, and remove most of your personal belongings. There’s varying advice on how much of your personal items to remove, since completing stripping the vehicle of your items could tell a dealer you’re desperate. But it’s a good idea to toss any food, paper, or clothing that may be lurking under the seats.
- Wipe away that sticky residue on the inside of your cup holders from fast food trips, and give it a thorough vacuuming.
- Gather your proof of loving care: oil changes, repair records, list of modifications made to improve the vehicle, etc. Having physical evidence that you took care of your vehicle could raise its value and make it more appealing to a dealer.
- Remove any stains you can from the interior.
- Buff out small scratches on the exterior. Fixing major dents/damage may not be worth it, since many dealerships can usually do large repairs for less than you can.
Many of these tips don’t need any funds – just a little elbow grease. A little time and patience, and taking a day to prepare your trade-in could mean saving more cash on your next purchase!
When to Tell the Dealer About Your Trade-In
You should treat your trade-in and your next purchase as separate transactions. Many experts suggest negotiating your next car’s selling price first. Once you have a buyer’s order and all the charges added up, then tell your dealer about the trade-in. By separating these transactions, you can put more energy into each.
Some dealerships may treat your trade-in as part of the overall car buying process and may be less likely to negotiate the selling price of your next car once they know about your trade-in. By agreeing on the lowest possible selling price first, you aren't giving a dealer the chance to adjust the price to account for your trade-in beforehand.
What Do I Need to Trade In My Car?
To trade-in your vehicle, you need the title, keys, and the owner. The legal owner of a vehicle – the one with the name on the title – is the only person that can transfer ownership. If your name isn’t on the title of your trade-in, you need to bring that person with you to the dealership to make the sale legitimate. If you don’t know the owner, then you may be a victim of title-jumping, which is illegal in every state.
If you don’t have your title because you’re in a title-holding state, then the lender sends the title to the dealership – easy peasy. If you own your car outright or you’re not in a title-holding state and don’t have the title, then you can get a replacement title from your local Department of Motor Vehicles or Secretary of State. It could take a few weeks to get a replacement title, and you might have to pay a small fee.
Once you’ve got the title (or the owner with you), and enough money to pay off your loan if you still have one, you’re all set. Trade-ins are very common, so experienced dealers should be able to answer any questions you may have during the process.
Tips on How to Negotiate Your Trade-In Offer
Some buyers live for the thrill of a good deal – others want to leave the dealership ASAP! No matter what kind of person you are when it comes to fighting for the best price, there’s an easy way to gain leverage when negotiating your trade-in’s offer: call around.
Calling multiple dealerships, at least three, in your local area for a trade-in estimate is a great way to gain leverage during negotiations. If there’s a specific dealer you want to work with, but they aren’t offering as much as other dealerships, then say so! They may be willing to match or beat that offer. If not, then it might be worth it to explore other car lots so you can get the most for your vehicle.
It’s also recommended to ask for an estimate from at least one franchised dealership that sells your vehicle’s brand. A dealership that’s franchised with your car’s manufacturer may be willing to offer more, and it could be a huge bargaining chip.
Having a Plan Is Half the Battle!
Prepping your vehicle to be traded in doesn’t have to take a lot of effort – just a little bit of organization, a few calls, and possibly some spit-and-shine. While finding a dealership that can buy your old car usually isn’t that hard, finding a dealer with bad credit lending options can be.
Most dealerships have third-party lending partners to get their customers financed, and some are signed up with subprime lenders. Subprime lenders specialize in assisting borrowers with credit challenges, but they don’t always stick out. Here at Auto Credit Express, we want to take the hassle out of searching everywhere for a lender that can help with your credit situation by doing the legwork for you.
Using our nationwide network of dealers, we’ll look for one that’s able to help with poor credit in your local area. Get started right now by filling out our auto loan request form. It’s completely free, quick, and carries no obligation.
