Trading In A Used Car
You will almost always get more money for your used car if you sell it yourself. But unless you have a buyer waiting in the wings, it is oftentimes easier and faster to trade in your vehicle when buying a new one.
No matter how you decide to sell it, you need to find out the value of your used car before you begin. But keep in mind that "good ol' Betsy" is probably not worth as much to a dealer as it is to you. Emotional attachment and fond memories of driving your car across the country after graduating from college have no bearing on the vehicle's dollar value. Some people think their trade is the nicest a dealer has ever seen, which may be true. But you should have realistic expectations.
Research the Value
So how can you get top dollar for your car? Knowing that many sellers don't really know how much their car is worth, a dealer will usually take advantage of this and offer you less than its true value.
But you don't have to bite, because it's actually really easy to find the trade-in value of your car. If you're using a bank or credit union to finance your new vehicle, they can easily look up your trade-in's general value. There are also free online sources such as Kelley Blue Book and NADAguides.com.
To use these free price-quoting services, you will need to know the year, make, and model of your vehicle, as well as the current mileage. You can select the vehicle's options (performance package, leather seats, power steering) for an accurate quote. Online sites also require your zip code so they can generate prices based on the market in your area.
Kelley Blue Book will even factor in the condition of your car when generating a price quote. Remember that you are looking for the trade-in value rather than the retail value―Kelley Blue Book and NADAguides.com will give you prices for both.
You can also get a professional appraisal for your trade-in. Unless your car is a high-end foreign model or special collector's edition, though, this route isn't recommended―it can cost up to a few hundred dollars.
What the Dealer Is Thinking
Believe it or not, new car dealerships actually make a bigger profit from the used cars they sell than on the new ones. This is why they want your trade-in. But not so much that they'll be careless―dealers are careful buyers and will take a good, hard look at your used car.
The dealer will be looking not only at mileage and the overall body and cosmetic condition of the car, but also how the car has been used and treated. You can expect the dealer to order a vehicle history report based on your car's vehicle identification number (VIN); this will reveal whether the auto has ever been salvaged or had the odometer rolled back.
There are other things the dealer might take into account that might not be high on your priority list. For instance, if you've had paint work on a high-end car, the trade-in value will go down.
When the dealer finally offers you a price, chances are there won't be much wiggle room. And oddly enough, if you're offered a very high price, you might actually be getting the short end of the stick; the dealer will probably charge you more for the new car you're buying to make up for it. If you ask for the actual cash value of your trade-in, you might be able to better assess the overall deal.
Sometimes a dealer might not even be interested in doing a trade-in. If the dealer would have a tough time selling your used car because it's dented or worn out, it won't be worth their trouble to accept it as a trade-in. The dealer might also already have several cars like yours―why add to the glut?
Then again, if luck is on your side, you could catch a dealer on the last day of the fiscal year when he needs to sell just two more cars to make a bonus. You'd better believe he'll make a deal happen that includes a great price for your trade-in, along with a great price for your new vehicle.
Getting More for Your Trade-in
Obviously, the curb appeal of your used car is very important when trading it in. If you can spend a little money and time on minor repairs, it could help you get a better price. But don't go overboard and spend more on the fixes than you'll get back in the sale.
You should definitely wash and vacuum your car before you bring it in for a quote. But in most cases, a professional detail job is overkill, so save your money.
Finally, when you're talking to the dealer you're going to want to play up your car's strong points. Does it have popular options? Was it garaged, or does it have low miles? Is it lauded for its reliability? Don't forget to mention those things.
Of course, there are probably some imperfections too―and don't be surprised or offended when the dealer points out all the issues. Instead, acknowledge them―and explain that you know how much repairs would cost you, and that the dealership's in-house shop can do it for less.
Local DMV Office