In recent years, the vehicle industry has been challenging to manage because to inventory shortages and soaring pricing. But the average cost of new cars decreased marginally in September for the first time in the previous five months. The price of used cars has also steadied, according to Kelley Blue Book.
Don’t rush to the dealer and blow a good bargain if the market changes have prompted you to trade in your automobile for a new set of wheels. Start by making improvements to your car’s trade-in value. These include finding out the current worth of your automobile, repairing technical problems, and maintaining your car’s appearance.
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It’s crucial to know your car’s worth, especially if you want to trade it in. Find the market worth of your car by doing some research. To determine its current market price, you may use resources like Edmunds and Kelley Blue Book, but you should also be honest with yourself regarding repairs and the state of your car.
Additionally, bear in mind that you won’t get as much for your trade-in as you would if you tried to sell your automobile yourself.
According to car expert Lauren Fix, “Many people believe they will receive the best value, but dealers accepting the trade need an amount of profit and are going to give you less than the advertised trade-in price listed on these sites.”
Address recognized mechanical issues
Your car’s mechanical and physical condition have a significant impact on its worth. Therefore, it’s better to remedy any problems that are reasonably easy to fix.
In general, it’s wise to think about making little repairs to your car that won’t cost you much money and are likely to raise its resale value. This might include changing out-of-service lights or doing minor aesthetic repairs to dents and scrapes.
To determine which repairs will be the most economical, research the improvements that may be made to your car’s resale value as well as the cost of each repair.
For any vehicle recalls impacting your automobile, you could also search the National Highway Safety Administration database. Recalled components may be repaired for free, and the added work may increase the value of your automobile.
Maintain receipts for maintenance and repairs, and search your files for older ones. These might demonstrate to the dealer or potential buyer how well-kept the automobile was. When the dealer evaluates your trade-in, take into consideration getting a car history report for your vehicle.
Ensure that your vehicle is in top condition.
Fix notes that the best trade-in value is most likely to be obtained by a clean and well-kept vehicle.
She commands, “Clean the car, inside and out.” “Detailing the car is like staging a house for sale,” someone once said.
Therefore, curb attractiveness is important.
Compare trade-in values.
Zach Shefska, the co-founder and chief executive officer of Your Auto Advocate, advises consumers to “shop around” for the best possible trade-in value before purchasing a vehicle.
Before speaking with the dealer, “get as many competitive quotes on your trade-in as you can,” he advises.
Before discussing the value of your trade-in with the dealer you want to purchase from, for instance, you should collect estimates from Carvana, CarMax, and any other significant used vehicle dealers in your region. You may calculate your car’s basic value using these numbers and further price research.
Separately bargain the trade-in value
You may make sure you receive the greatest trade-in value and the best price on the new car you’re purchasing by haggling your purchase and trade-in separately.
Shefska advises customers to be wary of dealerships who attempt to merge the two purchases into a single transaction. They do this because managing two transactions at once gives a dealer additional opportunity to make money.
Getting the trade-in offer in writing is also a good idea. This safeguards you against the dealer altering or withdrawing its offer for whatever reason. If you decide to leave the dealership to look around further and return to the exact same dealer later, a formal offer is extremely crucial.
When to trade in
Depending on the year, make, and model of your automobile, selling it to purchase a new one may make more sense at some times of the year than at others. The offer you get may also depend on the weather and other variables.
Fairpoint Wealth Management’s Matthew Kircher, a financial adviser, claims that he recently timed his trade-in value depending on demand.
In January 2021, he swapped in his outdated Ford Escape for a brand-new 2021 Toyota 4Runner. He planned his schedule well because he anticipated that all-wheel-drive SUVs would be in great demand throughout the winter and just before the start of the spring semester.
To increase the value of our old car, we waited until the right moment to trade it in, explains Kircher. We also planned everything out properly, taking advantage of the finest new car deals at the same time.
Due to often increased buyer demand in the first two quarters of the year, trading in a car might also be advantageous. To fulfill demand, dealers need more automobiles on their lots, so they could pay extra for your trade-in.
When you still owe money on your automobile, trading it in
If you’re still making auto payments, especially if you owe more than your vehicle is worth, trading in may not be the best course of action. To get a better price for the automobile, you could wish to put off buying your new vehicle or sell it privately. However, if you trade it in, the negative equity doesn’t simply go away; it will probably be rolled into the next auto loan.
The Federal Trade Commission (FTC) warns consumers not to do business with dealerships who guarantee they would “pay off your loan no matter the amount you owe.” Even if the dealership may pay off your previous loan, it must make up the difference somewhere, and that “somewhere” will ultimately come up with you.
According to the FTC, “Dealers may include the negative equity in consumers’ new car loan.” “That would add principal and interest to their monthly payments.”
Getting the greatest trade-in value might help you acquire the new or used car you desire for a cheaper price and monthly payment. Doing your homework, making necessary repairs, sprucing up your vehicle, and obtaining several quotations are all well worth the effort.
Use the same research techniques to compare vehicle loans when the time comes to purchase. You may be dealing with a dealership that offers in-house financing, but that doesn’t always imply it’s the best offer. You may be able to get approved for a better auto loan online, and you can use the loan offer for leverage when haggling over the price of your next automobile.