Should You Trade in your Car for a New One? 5 Things to Consider

The process of getting rid of your old clunker and acquiring a new vehicle can be daunting, but it’s also exciting. That goes double if you know what you’re doing when it comes to whether or not to trade in cars. We’ve looked at the pros as well as the cons, so we have your ultimate guide to trading in cars. Find out if it’s worthwhile, and learn the best way to go about a trade in to make sure you get every penny possible.


First, Do Your Research

Before you even start looking at new cars, you’re going to want to do your homework. A good place to start is the Kelley Blue Book. Plan to spend a few minutes entering information about your car into its user-friendly calculator — and be honest. If your car isn’t in great shape, don’t inflate its condition to get a higher estimate. You will see that Kelley Blue Book offers three different values: trade in, private party, and retail. Those first two are the ones you should pay attention to. (Retail is what the dealer can expect to sell your car for — you will not get that price when you sell it.) If you’re really into research, compare the KBB prices with those on Edmunds.com, and maybe even glance through the local classifieds to get a sense of how the used car market is where you live. Now, armed with this information, you can head to the dealer.


The Dealer Will Lowball You

This is simply a fact of life. Don’t be surprised if the dealer offers you less than you think — or know — your used car is worth. But before you start to feel morally outraged, look at the transaction from the dealer’s point of view. He is going to fork over money to get your car into a saleable condition. That means giving it a thorough inspection, fixing any problems that might be lingering under the hood or in the wheel wells, and completely cleaning and/or detailing it. If your car is a little long in the tooth, expect the offer to be particularly low. Most dealers don’t want to bother with vehicles that are more than, say, five years old. Why? Simple: they’re aren’t in demand like late model cars are.


Tips on Negotiating the Trade-in Price

If you walk into a dealership and announce that you’d like to trade in your car as a down payment on a brand new vehicle, the dealer will see dollar signs. What a wily dealer will do in this situation is give you a “too good to be true” trade in price — you’ll be hard-pressed not to see dollar signs yourself. But make no mistake. You are not getting that high figure because your 2008 PT Cruiser with the busted suspension is worth a lot of money. It is because the dealer’s going to compensate for the trade in offer when he quotes you the price of the new car. Now, this tactic isn’t necessarily a terrible thing. You may want to get the whole shebang dealt with quickly and easily. If you can still afford the monthly terms once your trade in has covered the down payment, then great! Just know that you are paying for the convenience of handing over your keys. One tip to help you get the most of your money is to keep quiet about your plans to trade in until you’ve settled on the new car price. Negotiate as though you had a cash down payment. If the dealer asks you what you expect from the trade in, turn the question back to him. Ask what he can give you. That helps you establish your ground. It’s also OK to stand that ground. If you don’t like the terms, you can always try another dealer. And chances are that if you start to walk out, the dealer will lure you back in with a slightly better deal. That’s just how the haggling happens.


What Other Options Are There?

Remember that you can always sell your car to a private party. This will still require haggling, as well as the hassle of meeting up with potential buyers. You may want to spend some money and time getting the vehicle in tiptop condition, to get the best return. Of course, you can always sell a junker “as-is” to someone who’s happy to put in the elbow grease in return for a lower cost. Donating the car to a charity — or handing it down to a relative or friend who is in need — are other options. In the first scenario, you’ll get a tax break. It won’t be close to the trade in value, but it’s something. And with both of these moves, you can feel good about helping others in need.


Is It Worth Your While To Trade In Cars?

Unfortunately, the answer to that million dollar question is “it depends.” Trading in cars is likely worthwhile if you meet one or more of the following criteria:

·        You are depending on the value of the trade in to serve as your down payment for a new car

·        You don’t have the time or the desire to sell the car to a private buyer

·        You just want to get the whole thing over with and don’t much care about getting the maximum value for your old car

Buying a new car and want to ensure that you won’t get stuck with a lemon? Contact Lemon Proof to learn why it’s a great idea to lemon proof your new ride.