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Car Trade-In Options |
| Are you buying a new car and want to trade-in
your old car? It's not as easy as you may think. Here are some tips
that will help you get the best value on your trade-in. |
Some people are lost when it comes to the trade-in portion of the
negotiations. But that's ok, because we're here to help answer your
questions. Below are some of the frequently asked questions regarding
the trade-in issue.
The best thing for you to know before reading on is that you should
not mention to the dealer that you wish to trade-in a vehicle until
the final stages of the negotiations. This will help get you the most
value for your trade-in vehicle.
The most important thing to know is what your vehicle is worth. You
need to remember that you are, in effect, selling your car. And just
like you would do if you were selling your car to someone outside
of a dealership, learning the value of your car is imperative. This
way you have a general price and you won't accept a sometimes deliberately
low offer from a dealer. Make sure you factor in features that may
positively affect the price, such as air conditioning, sunroof, cd
player/changer, power windows, etc. Also be sure to factor in conditions
that may adversely affect the price such as high mileage, dull or
chipped paint, rust, chipped or pitted glass, worn or stained upholstery
and carpeting, worn suspension, poor alignment, etc. These are things
that you may consider addressing before trading in the car.
Also keep in mind you are determining trade-in value (also called
wholesale value,) not retail value.
The trade-in value of a car is basically the amount someone who plans
to resell the car will pay it. There are a variety of books available
at many banks, libraries and credit unions, as well as online, that
can be used as a rough guide to basing a trade-in value. Rough, because
there are too many factors to go into pricing a car to print absolute
prices for each year, make and model. Time and location are also factors.
However, they are difficult to evaluate.
No you can't. A dealer will usually try to get your trade-in for less
than what it's worth. This occurs because the seller generally doesn't
have an inkling of what his or her car is worth. Therefore, offering
$500 less than the car's actual value is possible, and not uncommon.
A lot of dealerships, wholesale managers in particular, will try to
lowball you for about 85 to 90 percent of the car's actual value.
Knowing this, you can go to three or four dealerships, get an offer
from each, average them and then add on 10 to 15 percent. This should
give you a good idea of the wholesale value of your car.
The cold truth is that new car dealerships make more profit from used
cars than they do with their new car sales. They can make a profit
of 300 to 400 percent on a resale. This is why the dealer may try
to convince you that it's a hassle to sell your used car yourself.
Be aware that the dealer may not even offer you a trade-in. Your car
may be too beat up, or have too many miles, or the dealer may already
have 18 Jettas on the lot and doesn't want another. In this case,
you may consider selling it yourself. You can also sell it to a used
car lot, but you are almost guaranteed raw deal from used car dealers.
They rarely pay what a car is worth, considering they're going to
resell it and can't charge more than the car is worth.
Be careful with these. Trade-in allowances are given to people who
the dealer believes puts a lot of emphasis on getting the most for
their used car. In other words, those who demand a great deal on their
used car or who feel that getting a great deal on the used car is
more important than a good sticker price, will get it. However the
dealer will include charges to balance this out, or omit any discount
off the sticker price, often unbeknownst to the buyer. The more savvy
dealer will lead you to believe that by getting a good trade-in transaction,
you are getting a good deal overall. The best thing for you to do
is to tell the dealer that you do not want any allowances. Even better,
just ask how much the dealer will give you for the used car, as if
you aren't thinking of buying a car from them just yet. Then you have
the option of selling the car before buying a car. This strategy can
work out well for you, even if it entails being without a car for
a couple of days.
It's not necessary, but that's just me. I hate paying for things I
can do myself. You can be asked to pay anywhere from $30 to $300 for
a professional vehicle appraisal. As I mentioned above, you can use
the dealerships to provide this for free. Go to three or four dealerships
that have a used car lot, and just say you're interested in selling
the car to them. Get an offer from each, average them and then add
on 10 to 15 percent. This should give you a good idea of the wholesale
value of your car.
If you can do a few minor repairs without breaking the bank, go for
it. It can even add to the value of the car. However, this matters
more when selling the car than it does trading it in. So use your
judgment on what is important and what isn't necessary. Remember,
some repairs may cost more than what you'll have added onto the wholesale
value in the end.
A clean and shiny car is going to look more attractive, and again,
it can't hurt to have it look nice. But a wash and a vacuum will suffice;
no need to wax and Armor-all it.
The tires can play a significant role in the determining of the value
of your car.
First of all, a vehicle that has mismatched tires, either by type
or by size, will take a hit in value. Mismatched tires takes away
from the attractiveness of a car, and can also indicate troubles with
the rear axle.
Also, tires that are worn can indicate poor maintenance, which can
lead to greater scrutiny. And tires that are worn unevenly can indicate
that there's been damage to the frame, or that the alignment is shot.
Either can lessen the value of the car.
You should have these all looked at. For example, if you notice that
your radiator fluid is discolored, you should have the radiator flushed
and add fresh coolant. Check your oil as well. Dirty, sludgy oil can
mean a heavy engine job is on the horizon. Or burnt transmission fluid
means a transmission job. And either of these could cause the dealer
to decline you of a trade-in. Look at all of your belts, hoses, anterior
pipes, muffler, etc. These can all be problem areas that can be fixed
fairly easily and cheaply. Your suspension is a hot spot with the
dealers as well. Push down hard on the hood. If the front-end bounces,
you may need to replace the struts.
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