How Does Trading in a Car Work?
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The Trade-In
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Many people decide to trade in their old vehicle when buying a new one. This offers the ease of unloading your unwanted car and getting a new one in one transaction. You will take your vehicle to the dealership while deciding on a new car. Once your selection is made, you will negotiate with the dealer on a price for your trade-in. The dealer then puts your old vehicle on his used car lot.
New Car Credit
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Car dealers will buy your old car and give you credit toward the price of the new vehicle. Ensure that you appraise your vehicle for a fair market value, which you can do by accessing the Kelly Blue Book. Log the information for your vehicle and get an estimate on the average you can receive from your trade-in. The amount given for the trade-in will be deducted from the final price of the new car.
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The Negotiation
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Be mindful of the dealer, the car lot and the deal you strike with him. Ensure the dealership does not have an excessive amount of the same vehicle you are trading in, or you will not get what the car is worth; take it to another dealership instead. (Keep your negotiations with each dealer separate.) Do not bargain a price for the new vehicle without establishing a price for your trade-in first.
Fair Market Value
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If you are not offered fair market value, consider selling the vehicle yourself. You will make more money by selling it than selling it at a dealership because dealers only have to pay wholesale prices. It all depends on how long you want to wait to sell the old car and get a new vehicle.
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