if you’re in the market for a new car, one option to consider is trading in your old car. But how do you know if you’re getting the best deal?
This was a question that Sherry — a friend of mine — had when she came to trade in her 2015 Forester. She believed the offer of $11,000 for her car as a trade-in was significantly lower than it should be — based on her research.
The dealer explained to her that they can’t offer retail value for the car as they need to buy it for less and then recondition it before selling it at retail.
After some negotiations, a deal was reached of $14,000, including tax savings, which equates to around $14,840. Sherry was happy with the deal, and the deal was closed.
Armed with good knowledge, you can often save a few thousand dollars on the price of purchasing a car — or you can get a few thousand dollars more when trading in your car.
Here are five tips to help you get the most value when trading in your car:
Do Your Research on Price
If you’re thinking of trading in your car, let me tell you, it’s important to do your research first. You don’t want to end up in a situation where you’re getting a bad deal, right?
CarEdge.com in particular has caused headaches for some car dealerships because it empowers consumers with information. But that’s not a bad thing, right?
Knowledge is power — it can help you negotiate a better deal.
Knowing the trade-in value of your car can give you leverage when negotiating with a dealership. If they’re offering you a price that’s significantly lower than what you found online, you can use that information to negotiate a better deal. And if they won’t budge, you can always try another dealership.
Your goal is to get the most value for your car. Doing your research can help you achieve that goal.
So, take some time to research the trade-in value of your car before you head to the dealership. It’ll be worth it in the end.
Negotiate on Your Own Behalf
Negotiation is a critical component of getting a good deal on your car trade-in. Don’t be afraid to speak up and advocate for yourself.
Remember the dealership is trying to make a profit, but that doesn’t mean you have to accept the first offer they give you.
If you’re not satisfied with the initial offer, don’t be afraid to counter it with a higher amount. It’s essential to have a clear understanding of what your car is worth and what the dealership is willing to offer. That way, you can make an informed decision about whether to accept the offer or not.
In Sherry’s case, she negotiated her deal and was able to get $3,000 more than the initial offer. That’s a significant increase in value and shows the power of negotiation.
If you’re not comfortable with the offer, be willing to walk away. There are other dealerships out there that may be willing to offer you a better deal.
Be confident in your research and know your worth. Don’t be afraid to stand your ground and fight for a fair deal.
Shop Around for Your Best Interests
When you’re looking to trade in your car, don’t settle for the first dealership you come across. Shop around and get quotes from multiple dealerships to see who can offer you the best trade-in value.
Once you have a good idea of what your car is worth, you can use this information to negotiate with the dealership.
If the dealership isn’t willing to match the value you’re looking for, don’t be afraid to bring in an outside appraisal from another buyer. This can be a great way to show the dealership that you’re serious about getting the best value for your car.
It’s also a good idea to check out different resources online, such as car buying websites and forums. These can provide valuable insights into the current market value of your car and can help you make more informed decisions when it comes to negotiating with dealerships.
By shopping around, you can ensure that you’re getting the most for your trade-in, and you can avoid settling for a lowball offer. Keep in mind that the goal is to get the best value for your car, so don’t be afraid to take your time and find the right dealership that can give you a fair deal.
Minimize Negative Equity
When you owe more on your car than it’s worth, it’s known as negative equity. But don’t panic; you can still trade in your car.
As mentioned earlier, the dealership can make the payoff to the bank, and you just need to worry about the difference.
If the difference is not significant, like $200, the dealership can roll it into your new lease or loan. However, before doing so, it’s crucial to be cautious and ensure that you’re getting the best deal possible.
The dealership may make it seem convenient for you to roll in that negative equity, and you may not question it too much, but it’s crucial to be mindful of the financial implications.
Shop around for your trade value and have the dealership match it. Suppose they refuse to do so. In that case, you can bring in an outside appraisal from another buyer, like Carmax or a local car dealership that buys cars — and have the dealership match that price.
In some cases, the price difference may be significant, and rolling it into your new lease or loan may not be feasible. You may have to take an additional loan to cover the negative equity.
Although it’s not ideal to take on more debt, it may be the only option for some people. In such cases, it’s essential to ensure that you can afford the additional payments and not stretch yourself thin.
Can you see the point being made here… when dealing with negative equity, it’s crucial to be cautious and make sure you’re getting the best deal possible.
Don’t just settle for convenience; take the time to shop around and negotiate to minimize the negative equity. And always make sure you can afford any additional payments before taking on more debt.
Pay off the Car Before Trading it In
Before trading in your car, it’s essential to make sure you’re getting the best possible deal.
If the dealership won’t match your desired trade value, or if the amount of negative equity being rolled into the new loan is too high, it’s time to start looking elsewhere.
One way to maximize the value of your trade-in is to pay off the car before trading it in. Once you have the check from the dealership, use it to pay off the balance on your old loan. Then, you can trade in the car somewhere else for a better value.
Keep in mind that it’s essential to shop around for the best possible trade-in value. Use resources like CarEdge.com, Kelley Blue Book, and Edmunds to get an idea of what your car is worth. You can also visit other dealerships or even try selling your car privately to get the best value.
Remember, it’s okay to negotiate and walk away if you don’t feel like you’re getting a fair deal. The dealership is giving you the convenience of rolling in the negative equity, but that doesn’t mean you have to accept it.
Take control of the situation, and don’t be afraid to explore all of your options. By doing so, you can get the best possible deal and drive away in a car that you love without breaking the bank.
At the end of the day, getting the best deal for your trade-in car is possible. Remember to do your research, negotiate, shop around, minimize negative equity and pay off the car before trading it in somewhere else.