How to Trade a Vehicle
You've finally found the car you want and have decided to trade in your old vehicle. Learning what dealerships want and how the process works can be worrisome. Your vehicle may seem priceless to you but it's a cost of doing business for the dealership. Understanding how they handle trade-ins will minimize your anxiety. You can enter the dealership confident, knowledgeable and in control. Trading in your vehicle can be adventure, but a positive one.
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Instructions
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Call your vehicle lien holder and find out the payoff quote. Your payoff quote is the amount needed to pay to pay off the car loan. It is the balance owed plus any interest.
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Get a copy of your credit report from either of three major credit bureau sites Equifax, Experian, or Transunion.com. You can receive a copy of all three credit reports free annually from annualcreditreport.com
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Inspect you car you car as if you were buying it. Be honest about all its flaws because the dealership will be. This will help you categorize your vehicle as excellent, good, average or poor.
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Get your car detailed. This is essential to show the dealership that you have taken care of the vehicle. Also the physical condition of the car is the first attribute to receiving a fair trade-in evaluation.
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Remove all bumper stickers and parking permits on the windows.
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Review your inspection to see if you need new tires or brakes. Check for any body damage to the car. Don't spend too much money on repairs; you may loose money in the end if you do so.
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Change or add any maintenance fluids, such as oil, brake fluid, transmission fluid, or antifreeze. Showing that you have maintained your vehicle minimizes any repair cost that the dealer may subtract from the trade in value.
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Research what dealers are selling used vehicles similar to yours in the area. Read the classifieds or visit other dealerships to canvass the vehicles and write down the prices.
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Go to Autotrader.com and Cars.com and compare the selling prices for your vehicle is in your area.
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Check with the National Automobile Dealers Association (NADA) Kelley Blue Book (KBB) and Edmunds to find out the value of you vehicle. You will have to enter the mileage, condition of the car, year, make, model and the ZIP code of where you plan to trade it in. The websites with give you an estimate of how much to expect for the trade in. Sometimes the estimate is too high or too low, but using this estimate will help you be an informed negotiator.
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Is your trade-in a popular car model? Consider the risk dealerships are taking when trading your vehicle. They sure will. Dealerships will consider how long the car will stay on the lot and if they will make any profit from it.
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Figure your trade-in value by considering the selling trend of your vehicle and the appraisal sites. A dealership will not pay more than wholesale for a vehicle. The wholesale price is the trade in value. The selling price of the vehicle is usually $1,200 to $2,000 above what was paid for it.
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Negotiate your trade-in separately from the price of the car you are purchasing. Your trade-in offer may be lower than you like, but the new car price may be lower to compensate for the low trade in. Vise versa, you may be getting well over the amount you wanted for the trade, but the new car may be overpriced.
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Make sure you provide the dealership with the correct payoff amount of the vehicle and the lien holder. Use your credit report to double-check that you are getting the best loan rate for the new car purchased. Make sure everything as been signed by the appropriate parties, the numbers are correct, and date for the payoff of your trade-in will be made by the dealership within 10 days.
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Tips & Warnings
The payoff on your vehicle has nothing to do with its trade-in value. If you have negative equity in your vehicle consider waiting on trading it in when you've made more payments. Try to sell your car on your own before trading it in. You probably will get more from selling it than trading it. Consider having the dealership call around for other offers if you feel the offer is too low.
Do not attempt to do business over the phone. Many dealerships will tell you what you want to hear to get you on the lot. The final paper work completes the deal. Get all the numbers from the payoff amount, the date to be paid, and the car price all on legal financial letterhead(the contract). Only the financial manager can confirm in monetary amounts and that must be on the contract to be valid.
