Trading in your vehicle has advantages that selling doesn’t. First is convenience. Most trade-ins can be done the same day. A retailer is willing to take your car as-is, meaning you don’t have to clean up your car before trading it in. Trading in a car is a pretty easy process. There is little paperwork; no post-sale headaches to deal with and once your car is traded in you’re absolved of any liability for your used vehicle.
The advantage of selling your car yourself is that you’re in control of the whole process. When you trade your car in at a dealership, it may feel like someone else is in control of the process – leaving you asking, am I actually getting the best value? In reality, an individual seller often makes the same or close to the same amount as a dealership when you factor in time, advertising, negotiating, and cash value less tax advantages.
Trading in your car
The key to a good negotiation is to see your used car through the eyes of a buyer or in this case a retailer. Don’t let your emotional attachment to your car overshadow getting top dollar for your trade-in. To get the most value for your trade-in consider these three points:
- Value: A retailer takes into consideration two things when offering you a price for your trade-in. What third-party sources say a similar car is worth based on age, mileage and condition of your vehicle. The retailer also considers what the profit margin could be for your vehicle, minus any money owed on the car, reconditioning costs, advertising costs, holding the car in inventory (cleaning, upkeep, taxes, lot security) and demand (how long the car might stay on the lot until sold).
- Condition: While you might be willing to overlook the coffee stains on the interior or the few nicks caused by shopping carts and door dings, a new buyer will not. Retailers know this and take reconditioning, repairs and certifying a vehicle into consideration when offering you a price for your used vehicle. While they want your business, they also want to sell your car. Higher than average driving puts more miles on a car and can lead to excess wear and tear on your tires and engine, all of which will be deducted at trade-in.
- Benefit:Trading in your vehicle to a retailer has benefits for you and the new buyer. Generally, the larger the retailer, the bigger the benefits available. In most states, you pay sales tax only on the difference between the new car price and the value of your trade-in. If your trade-in value is, for example, $10,000 and the sales tax is 7%, then you could save $700.Benefits for buyers: A buyer can expect a dealership to provide certain certifications, warranties and conveniences that they won’t get from an individual selling a car. A retailer like AutoNation with dealerships nationwide, can offer a buyer financing, professional inspection, full car histories, 3-day money back guarantees and a warranty.
Tips to get top dollar for your trade-in
- Do your homework before taking your car to a retailer. Know what the value of your car is by checking multiple used car pricing guides online through reputable resources such as Edmunds, Kelley Blue Book, NADA, and Black Book. While they may provide different value prices, the information will provide you an estimated range to work with.
- Take the time to have your car thoroughly cleaned inside and out. Not only does it show better, it also makes a better impression during the appraisal process.
- If your vehicle is one that a dealer can re-sell, take care of the major cosmetic and mechanical issues as long as they’re affordable. Anything you leave for the dealer to do adds to their reconditioning costs and lowers your trade value.
- Bring all receipts of maintenance work and authorized repairs done on your car, including oil changes, new tires, etc. Receipts are a ticket to a higher return.
- Trade-in your vehicle with a larger retailer, such as AutoNation, who has dealerships that sell the same model.