When you have a vehicle but want to purchase a newer model, most people choose to trade their current one in. That's because this is much more convenient than trying to sell your car privately. With that in mind, here are some tips to help you get a better deal on your trade-in.
1. Get a Ballpark Figure of a Fair Price
Before heading to a dealership, it's a good idea to have an estimate of what your car is worth. There are a number of online appraisal tools from trustworthy sources you can consult. These include Kelley Blue Book (KBB), Edmunds, NADA Used Car Guide, and Black Book, among others. You'll want to check several to get a ballpark figure because it's likely that the appraisals will vary.
Remember to keep in mind the different variables that can affect what your trade-in is worth. Outside of the obvious year, make, model and mileage, the vehicle's trim level and options also matter. Take careful inventory of those. Plus, where you live and the time of year also matter.
And of course, your trade-in's condition level is an important factor. Stay grounded and be realistic when evaluating your trade-in's condition. For reference, Kelley Blue Book has four tiers in their condition level evaluation system — excellent, very good, good, and fair — and just three percent of all cars qualifying for the "excellent" tier.
2. Improve Your Trade-In's Condition Level
The leading authorities are pretty much split when it comes to how much you should fix up your car before trading it in. A little elbow grease and tender loving care can improve your vehicle's trade-in value. But the question is: will it be enough to justify the effort and expense?
With anything small, it's usually best to go ahead and fix it. This can include touching up scratches, repairing dents, replacing broken lights, etc. You can also go ahead and wash and clean your car inside and out.
But for bigger fixes, such as a tire replacement or mechanical issues, you'll want to carefully weigh the benefit of each repair before investing time or money. A good tip: run the numbers with an appraisal tool (ex. a trade-in with worn tires vs. a trade-in with new tires), note the difference, and get an estimate from your mechanic to see if the repair is worth it.
3. Prep for the Trade-In
Get your car ready for a positive first impression by making sure it's clean and washed. Another great idea is to gather up as many service and repair records as you can, whether they are from simple oil changes or major repairs. If you don't have many, visit the places you've had work done and see if they have records on file they can share with you. Providing a dealership with service records can make a difference.
It's also a good idea to find out how your state deals with trade-ins when it comes to taxes. Some states allow you to deduct the trade-in from your new car's purchase price, meaning you only have to pay taxes on the difference. This can result in big savings depending on what your trade-in is worth.
4. Get Multiple Offers
Make sure that you are getting the best deal by getting multiple offers. Real Car Tips recommends that you get an offer from at least three different dealerships.
They also believe it's a good idea to go to dealerships that sell the same brand as your car. These places may be willing to pay more because people tend to shop based on the nameplate (ex. buyers go to a Toyota lot expecting to find used Toyota vehicles to check out, not Fords).
Plus, each car lot will likely make a different offer, as sales numbers and inventory can play a factor in what they are willing to pay.
Once you have multiple offers to compare, you can go with what's best. You can take the highest offer, or if two are close, you can go with the one with the best price your next vehicle.
If Financing is Your Main Concern
A trade-in with equity makes for a great down payment when financing another vehicle. But if bad credit is making it difficult for you to find an auto loan approval, it might be time to try Auto Credit Express.
We help people with bad, thin, or no credit locate a dealership in their area that stands to give them the best shot at being approved. Our service is free and it puts you under no obligation to buy, so you have nothing to lose. Go ahead and fill out our quick and secure online application to get the process started today.