In most cases, using the trade-in value of your old vehicle to lower the down payment on a new one is a sound business practice. The more you can negotiate for your trade-in, the less cash you’ll have to come up with for a new car. The key is to make sure you get what your vehicle is worth when the time comes to trade it in.
Sell It Yourself
When it comes to actual cash value, you may be better off selling the car yourself than using it as a trade-in. A private sale almost always brings a higher price, which you can then apply to a down payment on a new vehicle. Unfortunately it may also mean a long wait until you find the right buyer. In order to expedite the matter, many people opt for trading-in their old car. It’s simpler, quicker and if you do it right you’ll still end up getting a fair price.
Before You Buy
Doing a little research on how much your car is actually worth before visiting a dealer is always a good idea. This will give you a starting point when you begin negotiating a trade-in price. You can estimate worth by doing the following things:
- Find out what the Kelly Blue Book value is. Kelly Blue Book is one of the most well known and dependable sources for determining the value of a vehicle. They take into consideration the year, make, model and other criteria, such as mileage and ‘extras’ the car may have, like side air bags, air conditioning or GPS systems, and come up with a ball park figure of what a vehicle of that type is worth.
- Attend used car auctions and pay attention to what vehicles such as yours are selling for.
- Visit other websites that have information on trade-in values. See what comparable vehicles are worth.
Visiting the Dealer
One of the first things a dealer will ask is whether or not you plan to trade in your old vehicle. It may be best to try and pin them down to a firm price for the new vehicle you’ve selected before letting them know you plan to trade.
They don’t generally like to negotiate that way, but it would be in your best interest. Remember, a car dealer is in the business to make money. They know how much they can sell your old car for, so naturally they’re not going to offer you that amount but something much less, otherwise they couldn’t make a profit.
Go to a dealer that has a good reputation. Ask your friends who they recommend. Were they satisfied with the deal they got? Was the staff friendly and courteous, or did they try and rush them into making a decision? Research the dealer’s business rating online. Does the Better Business Bureau have any complaints against them? The more knowledge you have ahead of time the easier it will be to select the right dealer.
The negotiating process is difficult for people who are not comfortable arguing, but it can be done in a non-confrontational manner that will ensure you receive the best possible price for your trade-in. Remember, until you actually sign the papers the car is still yours and you’re free to consult with another dealer before making a commitment.
Don’t let the dealer rush you. After you’ve received what they say is their final offer, go home and discuss it with your family. This will give you time to make sure you’re satisfied with the deal. It may also make a dealer ‘reconsider’ their final offer and make you an even better one. You’re in the driver’s seat–it’s your car and they want to sell you a new one. It’s up to them to satisfy you, not the other way around.
Other Trade-In Tips
Determine what factory incentives are available for the vehicle you intend to purchase. A dealer will sometimes include these incentives in the ‘price’ you received for your trade-in even though you would have gotten them anyway. A little research online will help you be aware of these incentives before you go to the dealer.
End of year sales are always a good time to buy. Dealers will be trying to move the previous year’s vehicles and may be inclined to give you a better trade-in price so they can make room for the new models.