Trade In Tips
Read these 7 Trade In Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Car Buying tips and hundreds of other topics.
A Trade-In To-Do-List
For the consumer with plans to trade in their vehicle, the negotiating process is a little more intricate. All moves should be synchronized according to the findings of one's new car research. Use the following tips to streamline your trade in:
1) Create a dream list of three models that are conducive to your budget.
2) Be sure to include any special car features
3) Next research the cost and any associated customer incentives offered on your models of choice
4) Visit the National Auto Dealers Association Website at www.nada.org or the Kelley Blue Book at www.kbb.com to research your vehicle's current fair-market trade-in value
5) Shop your car around with a few local car dealerships to and inquire how much the dealer will pay for your vehicle from an outright sale. (If dealers are not interesting in your car, expect the trade in price to be low)
6) Make competing dealers vie for your business by making them aware that you are shopping around. Obtain all quotes in writing
7) Show no emotion and do not let the car salesmen tempt you with an expensive cars or features
8) To avoid an inflated price of your new car, do not acknowledge the trade in until the salesperson has confirmed the cost the new car.
9) Do not give the salesperson the keys to your trade-in until the salesperson has met your objectives; otherwise you could be subjected to being held hostage until the salesperson pressures you into signing a sales contract.
Do not forget to test drive the new car.
How Dealers Rate Trade-Ins
When it comes to calculating the value of your trade-in, it's important to understand how dealers rate trade ins. Not to mention, knowing the trade-in value of a used car is a primary facet of knowing how much of new car you can afford. Trade-ins may leave ample room for car dealers to finagle fees and inflate the cost of a new model. Here are a few vital facts regarding trade ins:
1) The trade-in value is the amount a dealership will deduct from the purchase of a new car in exchange for a used vehicle.
2) Many dealers refer to the Internet based service, Black Book to set the value of a trade in.
3) Trade ins valuations are based on the "wholesale" value rather than by it retail value. The wholesale price will become the car dealership's asking price one the car is placed on the lot).
4) Dealers are unable to offer more than the wholesale value for a car that does not have a good trade-in value.
5) Trade-in values are based on the present state of the car or ‘as is'.
Smart Tips to Calculate Trade-In Values
Calculate trade-ins by deducting the dealer's maintenance costs. Regardless of the condition of your car, many dealers will charge a reconditioning fee of $500 or more.
The reconditioning fee will cover the cost of a safety check, car detail, smog check certification and other maintenance fees. If a car dealer makes a deal to trade-in your car, be sure to ask the following questions:
- Is the trade-in offer before or after reconditioning?
- Can you rollover the outstanding debt of your trade-in to your new car purchase? (Remember to refinance the rolled over loan to avoid a long term loan where you will pay more for the new car than its value).
- What is the wholesale and retail value of the trade?
- If you are under warranty with your trade in, ask the salesperson if he can recommend a new car with an incentive amount that covers your debt. This tactic will help you offset trade-in debt while eliminating the effects of a "rollover.”
- To ensure that you are getting the best deal, request a breakdown of each fee and credit associated with your trade in purchase of a new car.
How Dealers Calculate the Value of the Trade In
Car dealers do not perceive or calculate trade-in value the same way a consumer does. The manager of a car dealership will calculate a trade-in and assign a price by taking the following steps:
-- The car's exterior condition will be reviewed (body damage, the paint, etc).
-- The trade in will be evaluated and driven for a mile or so
-- Track the vehicle identification number VIN at CarFax.com
-- Look at the mileage, transmission, under the hood
As far as curb appeal is concerned, mileage and the condition of the body are important facets of the trade in value.
Maximizing the Value of Your Trade In
Trade-ins are undervalued by car dealers and over assessed by consumers. The value of the automobile trade-in is commonly misunderstood by consumers.
When consumers research the value of their car, the highest amount is not what most car dealerships expect to pay. Unfortunately, a trade-in is worth much less to a dealer because their target gross profit per unit is $1,200 and up.
When shopping around for a car dealer to trade in your used vehicle, look at the other cars on the lot. If you have a Saturn and most of the dealer's cars are foreign imports, the chances of making the most from your trade in are nil. If you have a red Acura and three other cars on the lot are red Hondas, do not expect much for your trade in.
To maximize the value of your trade in, remember to size up a car dealership's other vehicles.
Calculate Your Car's Trade in Value
To take the guesswork out of calculating your vehicle trade-in value and test drive these smart strategies. Certain car owners will pay for a professional appraisal to assess the value of their trade in. The cost of a professional vehicle appraisal ranges between $30 to $300 dollars.
To save money and acquire a feel for the used car market, take your car to a minimum of three dealerships with used car lots. State that you are trying to sell your car.
After each dealer provides you with an offer, tally up the total of the offers, and divide the sum of each offer by the number or dealerships that looked at your car.
Take the final average and add ten percent to the amount. The total should provide an approximation of the wholesale value of your used car.
The Downside of Private Sells vs. Vehicle Trade-ins
By and large, car sellers will make more on their old car than from a trade-in.
The risks and work associated with selling to a private party may give the trade in more appeal. Here are a few of the tasks and risks involved in selling a car a vehicle privately:
-- With a private car sell, you may be opening your home to unsavory strangers
-- To avoid any liability issues in regard to transferring the title of the car, the paperwork must be prepared for DMV documentation
-- Drop insurance coverage as soon as your name has been removed from the title
-- A current smog certification is required in certain states
Unlike the vehicle trade-in where most of the work can be performed online and consist of a few offers from dealers, selling to private buyer requires a little more work.
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| Heidi Splete |
