You’re finally in tip-top financial shape to purchase a new car, but there’s one problem. How will you get your existing set of wheels off your hands?
You don’t have time to deal with the hassle of a private sale, and you have no desire to auction it off.
You decide a dealer trade-in is the best way to earn cash for your vehicle with no strings attached. Afraid of getting lowballed by the car salesman? Don’t fret. Conducting research on the trade-in process and your car’s value will equip you to negotiate top dollar for your ride.
1. Know how trade-in values work
According to CarsDirect, five factors determine the trade-in value:
- Year: Newer models get the most attention from used-car shoppers. “When a dealership anticipates a quick sale, they are more willing to pay a higher price for it,” CarsDirect says.
- Make and model: If the model holds value or is in high demand, the resale amount will be decent.
- Condition: Both the exterior and interior appearance are components of the vehicle’s appraised value.
- Mileage: The higher the mileage, the lower the trade-in value. “Even if the vehicle’s condition is impeccable, an odometer reflecting high mileage may make a consumer less willing to purchase a car at a price acceptable to the dealership,” CarsDirect says.
- Desirability: If your car is popular among consumers, you’re in luck.
So, make note of the mileage and condition of your car. Then, visit a site such as Kelley Blue Book to get an idea of what the trade-in value will be. Note: These sites often offer several prices, including the trade-in value and one for private sales, so make sure you’re checking the right one.
The trade-in value typically will be less than that for a private sale, which requires more effort on the owner’s part.
Keep in mind that values can also be different based on where you live and what is popular in your area. So be sure to look at what similar vehicles are selling for in your community or state. Check Craigslist, newspaper ads and other local sources.
So now you’re prepared to negotiate a decent price. Is the offer you’re getting from the dealership fair? Jack Nerad, an analyst with Kelley Blue Book, told Bankrate: “It is possible to do well in a transaction with a dealer, but you have to do your research.”
Now let’s look at some ways to improve your trade-in’s value.
2. Bring the maintenance up to speed
I’m not suggesting you spend a load of cash and give the car a complete makeover. But the better the condition, the more money you’ll make. If you’re not a car person, you might want to find an expert you trust to advise you on what repairs would be worth the cost. Think of the repair as an investment; you want to get back in a higher price at least as much as you spend on the repairs.
3. Don’t neglect the body work
Too many dents, dings and scratches can be hard on the eye. So, suck it up and fork over the cash to have them repaired.
“Dent removal experts can be very affordable — often charging only $100 to remove several dings,” said Dan Ingle, vice president of valuation at Kelley Blue Book. “You will be saving the buyer the headache of taking it to the body shop.”
“For a major dent where a panel needs to be repaired, it makes even better financial sense to fix it,” Ingle advises.
4. Provide service documentation
This information should be present on the Carfax report, if one is acquired, but don’t take any chances.
“These days, regular oil changes are an even better indication of good upkeep than tune-ups,” said Ingle. “If you changed your oil every 3,000-8,000 miles, in keeping with the manufacturer’s recommendations, that’s a good signal to a buyer that the car has been cared for.”
If you didn’t keep the receipts, ask the shop you used for the documents.
5. Detail your ride
If you’re selling your house, you clean it up and make it look good. Do the same with your car. Some consumers are more interested in a visually appealing vehicle than they are with what’s under the hood.
Sheronde Glover, founder and CEO of Car-Buy-Her, told Bankrate: “Make sure your car is clean. A good detailing job might cost about $50, but it could increase your car’s value by several hundred dollars.”
6. Negotiate the selling price separately
Don’t mention your trade-in until you’ve negotiated the purchase price of your new vehicle. Otherwise, the salesman will talk about them as a package and make the deal you’re getting a source of confusion. “If the dealer asks if you plan on trading in your car, do not say yes or no, just say, ‘Possibly, but let’s just talk about the new car price first,'” NewCars.com advises.
7. Shop around
Not satisfied with the final offer for your trade-in? Shop around at a few more dealerships. You may be able to get more than you were initially quoted, because demand varies by location. If a vehicle identical to yours has been sitting on the lot for a month, don’t expect to get top dollar for your trade-in.
What tricks have you used to boost your car’s trade-in value? Let us know in the comments below or on our Facebook page.
Ari Cetron contributed to this report.