Do You Get a Better Deal if You Trade in a Car?
You will not get a better deal for your car purchase if you trade in a vehicle, although some dealers may have you think so. When trading a vehicle, you should work on trade and purchase price separately to avoid confusion. Research your trade-in value and purchase price to ensure you get a good deal.
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New Vehicle Purchase Price
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Check rebates, or automatic discounts, offered from the manufacturer online at the manufacturer's website. You can also virtually build the vehicle you want, which allows you to view the car's sticker price as you add or remove features. Rebates are deducted from the car's sticker price. From the manufacturer's website, go to individual dealership websites to see if any dealers in your area offer additional savings. Email any dealers who you may want to work with for your purchase to inquire about pricing. Once you have a price offer from one dealer, use it to shop others.
Used Car Purchase Price
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Used car purchase prices vary. Dealers may receive used car inventory from trade-ins or auctions, which include off-lease vehicles, rentals or wholesale vehicles. Once a dealer purchases a used vehicle, it ensures the vehicle is in resale condition and can pass any emissions or inspections testing. If the vehicle needs repairs, the dealer will likely complete them. For this reason, a dealer's actual ownership price is different than others. You may find you can't negotiate the vehicle's price at all or that the dealer can reduce the price by thousands. Check values at Edmunds.com and the Kelley Blue Book website to ensure fair pricing. Negotiate if necessary.
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Trade-in Value
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You can use Edmunds.com, the NADA Guides and Kelley Blue Book website to determine your car's trade value. Go to all three websites and use a median value, as appraisal guides differ. Your result is a fair value for your vehicle and the amount you should expect for your trade-in. If the dealer's appraised value is less, ask why. The market may affect the value of your vehicle for reasons such as soaring gas prices or, you may be trading a vehicle that isn't season appropriate. If your vehicle needs repairs, the dealer will reduce the car's trade-in value to cover the costs.
Considerations
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Discuss your purchase and your trade separately when working with a dealer. Properly research all values before you have your car appraised or agree to a purchase price. If you don't, the dealer may switch numbers around to make it appear that you're receiving more for your trade than you actually are. For example, if you purchase a used car and the dealer can reduce its price by $3,000, it may only show you $1,000 off of the purchase price, using the remaining $2,000 to add to your trade value, which may appear to be a great deal if you're concerned with your trade value.
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