Trading in your old car for a new model
Trading In Your Old Car for a New 2010 Model
The new car season is here once again, and millions of Americans are contemplating the purchase of a brand new model. There are a variety of things to consider prior to making a new car purchase, ranging from the features and options of the new car to its price. Before you think that your old car has no place in your consideration of a new car, however, there is one important thing to remember: trading in your old car can result in a substantial reduction in the down payment necessary for your new car. In fact, trading in your old car is often an option that can cover all or nearly all of the required initial payment!
Unfortunately, trading in your old car is not as simple as trusting the dealer to give you the best price. Car salesmen are, after all, in the business of making money and offering you top dollar for trading in your old car represents a smaller commission for them. Because of that, many dealers will take every opportunity to pay you far less than your old car is worth so as to maximize their own profits. To avoid trading in your car for less than its actual trade-in value, there are a number of things you need to do.
First of all, you are responsible for knowing the actual value of your car. Few dealers will be willing to sit down with you and make sure that you know that value, so research it beforehand with a source such as the Kelley Blue Book (KBB) to ensure that you know the trade-in value as well as the estimated value of any sale to a private party. Being armed with this information is one of the easiest ways to avoid trading in your old car for less than it is worth.
Before trading in your old car, you should also check with online and local classified ads to determine how close cars like yours are selling to the KBB value. This is important information to have, since it may help you to decide whether to deal with the dealership while trading in your old car, or whether to hold out and attempt to sell the vehicle to a private buyer.
Even with that information, you will have to accept that trading in your old car means that you will receive somewhat less than the car is actually worth in a private sale. The dealer has to absorb the costs associated with cleaning, detailing, and fine-tuning your old car prior to reselling it, and then still has to find a way to make a profit. When trading in your old car you should never lose sight of the fact that you are dealing with a business entity that has to be profitable to remain in business!
If you are trading in your old car, remember that higher mileage vehicles will be worth much less to the dealer, and adjust your expectations accordingly. Still, if the offer is far less than the cars real value, trading in your old car may not be the best way to recover some of your investment. You may instead want to look at self-financing of any down payment, and attempt to sell the car on your own.
Finally, dont be too eager about trading in your old car. Before you even offer to trade it in, allow the dealer to work out the best deal possible for the new car you are buying. You should only mention the trade-in after you are satisfied with the overall deal. At that point, you can ask the dealer how trading in your old car would affect the need for a down payment permitting you to maximize your trade-in at both ends of the pricing process.