|NEGOTIATE THE TRADE-IN ALLOWANCE
Websites like Edmunds.com will give you a pretty good idea as to what to expect. Be honest about
your trade-in’s condition, but don’t let the dealership subtract for items already factored into your
evaluation of condition. Minor scratches and dents are ordinarily considered normal wear and tear
and thus there should be no additional deductions.
The trade-in value is probably one of the easiest amounts to obtain, but is often neglected. Know
what you expect for your trade-in before you visit the dealership.
Set a target price for your trade-in!
Also, know the loan “payoff amount” on your current car by contacting your lender. (You may also
wish to ask them if they would be interested in financing your next vehicle.)
When you trade your old vehicle in for a new vehicle, the dealership will know whether they intend to
sell your old vehicle on their lot, send it to another dealership, or sell it at a wholesale auction. If the
vehicle you are trading in is a different make (example a Ford car at a Toyota dealership), most likely
the vehicle will be sold at auction. In this example, a dealership’s used car manager should know
within a few hundred dollars what the auction proceeds will be. Unless your car is rare, it is likely that
hundreds of vehicles similar to your trade-in were sold at auction across the country within the last
several weeks. These auction prices are readily available to dealerships.
Consider giving your trade-in a thorough cleaning and remove all of those personal items that you are
“storing” in the vehicle. A clean car will have the appearance of being better “maintained” and “cared
for” and that could result in a larger trade-in allowance.
Should I sell my car in a private sale?
Although you can usually sell your vehicle in a private sale to a third party for more than you will
receive on a trade-in, you should consider the following:
1) How much more will I receive by selling the vehicle in a private sale? (+)
2) How much will I spend advertising my vehicle? (-)
3) Am I prepared to show the vehicle to multiple potential buyers and will I be
comfortable accompanying a stranger on a test drive? (-)
4) If I sell my vehicle to a third party, will my state allow me to recover a sales tax
credit similar to what I get from a trade-in? (-)
5) Am I prepared to handle the paper work and make sure that the check is good? (-)
You may also want to take your vehicle to CarMax or other Dealerships and ask if they would be
interested in purchasing your vehicle. Either may offer you more money than the trade-in allowance
and either provides you with an amount the Selling Dealership needs to beat. (Make sure you don’t
lose the sales tax credit when selling to a third party.)
Homework, Shop, Homework, Buy!
purchase and finance
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