Navigating the Trade-In Process

When planning your next car purchase, take some extra time to evaluate the trade-in process. This is the Achilles’ Heel for many buyers as they neglect to take into account everything involved in the trade.

One key is staying focused. Do not be dazzled by your new car, or your dream of getting that new car. Think about your trade-in and do not let its significance disappear as you negotiate with the dealer. They are in business to make money – just make sure they don’t make it all on you!

First you should consider selling it yourself. This will most always yield a higher return. However, many of today’s new car buyers just don’t have the time, energy or desire to do this effectively.

If selling it outright is not for you, spend an hour to get an actual appraisal for your trade. If you have a local CarMax, take it in and get a guaranteed appraisal from them. It’s painless. In fact, their prices are often higher than BlackBook trade values or what your dealer may be willing to pay.

If you don’t have a CarMax nearby, check with your local bank or credit union. Many of these institutions will offer an appraisal if you ask.

Take these appraisals with you and use them in your dealer negotiation. Also be sure to spend the roughly $100 necessary to fully detail your vehicle. A clean car will always bring more money.

The next thing is to keep in mind that many trade-ins offer a high source of profit for a dealership – but certainly not all of them. Keep this in mind as you shop your trade-in. Not every dealer will offer the same price for a particular car. Some won’t give you the top dollar because they have other similar cars or no demand for the make and model in your local market.

Nevertheless, emphasize you expect full credit for your trade-in. Write down the figure before you begin negotiations and stick to it.

Lastly, you need to be realistic throughout the trade-in process. Be firm about the value for your trade but keep in mind the dealer costs of accepting your trade. They incur very real expenses as a result of this process. They will need to insure, inspect, repair, service and detail your car to make it ready for resale.

In addition, they are not only accepting the resale risk of your car, they are also risking a no-sale. If the dealer cannot sell your vehicle in roughly 45 days, he will incur transportation, additional detailing, and auction fees. All of these weigh heavily on the actual profit a dealer will make on your trade.

Knowing what your vehicle is worth going into the negotiation is certainly important. However, recognizing the dealer’s risk in the transaction will help ensure you get the best deal possible.