About Car Trade-Ins
Car trade-ins involve more than simply handing the dealer the keys to your old car. To make sure that you get the best price for your trade-in, it's important to do some research to determine the true value of the car. It's also imperative that a seller understands that you will make more money with a private sale. Those who don't want the hassle of privately selling a car usually consider dealer trade-ins an easy solution.
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Considerations
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Dealers purchase cars at trade-in at wholesale cost. Wholesale price is the cost a dealer will pay for the car at auction, and subsequently, the price they will give you at trade-in. It's the very reason that trading in a car makes you less money that privately selling the car.
The dealer will check current trends to see the actual value of the car at auction in recent days. This certainly does not mean there isn't plenty of wiggle room on the value of your car. Remember that your car trade-in is still a sale, so can present the best possible product for trade-in to the dealer.
Preparation
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Take your car to a car dealing service for a complete cleanup. Any money you spend will more than pay for itself in the end. If you choose not to use a professional service, clean out your car, wash it thoroughly, vacuum it, and remove all personal items. Wipe down the door ends and windows thoroughly. Dealers will be looking at the overall condition of the car.
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Assessment
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Make an honest assessment of the condition of your vehicle. Three categories exist for vehicle assessment: excellent, good and fair. Excellent condition represents a perfect car in perfect condition. Very few cars other than street rods and custom cars fall into this category.
Good condition reflects the most common category of most used cars. The glass, tires, and engine are all in good condition with appropriate mileage for the age of the car. The dealer might need to make minor body repairs. A vehicle in fair condition might require some mechanical and bodywork before sale. The car also might need tires and may have high mileage.
Research
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The Internet offers a number of sites to aid you in trading in your car. Researching the current value of your car is imperative to getting a fair price. While many people assume you cannot negotiate the price of trade-in with a dealer, this is not true. Your biggest choice lies in whether to trade your car in or not. Arm yourself with the "going rate" for your particular car to make a more educated choice.
Based on what you know after assessing your vehicle, look your car up at one of the many used car valuation sites. Among the many are Edmonds, Kelley Blue Book and Nada Guides (see Resources below). All three sites offer pricing levels depending on how you want to sell your vehicle.
Retail price is the cost to buy the car from the dealer. Trade-in is the vehicle price when traded into the dealer---the wholesale value of the car. Private sale price reflects the price you may get if the car is sold to a private individual.
Decisions
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After completing your research, you now have enough information to decide if the dealer is offering you a fair trade-in value for your car. Visit the dealer and see what price is offered. You will be weighing the convenience of immediate sale versus the job of selling the car yourself.
The dealer will evaluate the entire vehicle. The condition, age, mileage, vehicle history, tires and transmission will all be thoroughly checked. Many dealers also deduct an auction expense of a few hundred dollars for transporting and auction fees. Once the dealer gives you the price, it's your decision. Another thing to consider is that the wholesale price will be deducted from the overall cost of your new vehicle. In many states, this will lower the new car price on which you'll pay sales tax.
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