When you trade in a car, you’re essentially swapping out your old vehicle for a new one. The dealership will subtract your vehicle's trade in value from your new car's total purchase price. Trading in your car can be a great alternative to selling it. The whole process, however, can be a bit intimidating, especially for the for people who have never traded in a vehicle before. To make the trade in experience a bit easier, we’ve compiled a quick guide on trading in your car to a dealership.
Tips when trading in a car at a dealership
Here are important things to keep in mind when trading in a car:
Know your car’s value
Figure out how much your car is worth to better negotiate with dealerships and get the most out of your trade-in. Go online to see how much vehicles similar to yours in make, model, and/or age are going for. There are also plenty of appraisal websites and tools that can help you determine your car’s value. If you’re calculating your car depreciation, always consider its mileage and current condition as these factors will affect its total value.
Finding out your car’s market value may seem taxing, but it is definitely worth it. To get the best deal from your trade-in, you have to come prepared. The last thing you want is to trade your car in for much less than its market rate.
Make sure your car is trade in-ready
During trade ins, dealerships also consider the damages and defects of the vehicle when determining its trade in value. To get the best value, ensure that your car is up to date with its maintenance checks and hasn’t missed any necessary tune ups. Visit a mechanic beforehand to fix any minor defects that could significantly decrease the trade in value of your car.
Check out offers from other dealerships
Ask around different dealerships to see where you can get the best deal. Going to the dealership where you originally bought your car could net you a good price because of your established relationship with the dealer. But don’t let that stop you from looking for even better deals elsewhere. Talk to various dealerships to get an idea of what you can get for your car.
If that seems like too much work, there are websites like OnlineAuto that offer trade in services. All you need to do is submit an application and they’ll connect you with dealerships so you can get a great deal on your trade-in without all the hassle of talking and haggling with dealerships.
Get your finances in order
Determining your car’s value is only half the battle. Trading in a car is not a one-sided affair. After agreeing to the trade in price with the dealership, that amount will be deducted from the purchase price of your new vehicle. What you need to do next is figure out how to finance your purchase.
Some dealerships offer car finance but, these often have higher interest rates and stringent terms that may not meet your financial needs. It’s best to shop around and compare car finance options. For those trading in a car that’s still under a loan, talk to your lender to understand what you should do next.
Prepare the needed documents
Get your car title, vehicle registration, quotes or car valuations, loan standing, maintenance records, and other necessary paperwork ready. These official documents may take time to gather, so preparing them beforehand can help streamline the whole process.
Figure out your car’s equity
You can calculate your car’s equity by subtracting the amount still owed on the vehicle and its current value. If your remaining loan balance is higher than the current value of the vehicle, you have negative equity. In this situation, trading in your car could be more trouble than it’s worth.
It is still possible to trade in your car even if it has negative equity. You can use what you get from trading in the car to help pay off the remainder of the loan. However, your costs could compound as you still have to pay for the purchase of your new vehicle. When it comes to trading in your car, it’s wise to wait until you have your finances are in a better place.
Don’t be afraid to negotiate
If you think a trade in offer is too low and have the research to back it up, don’t hesitate to negotiate with the dealership. If you have offers from other dealerships, you could use that as leverage during negotiations. During trade ins, you can negotiate both the value of the car you’re trading in and the price of the car you want to buy. The key to a good deal is getting a good trade in value for your old vehicle and the purchase price of your new vehicle.
What do dealerships look for when trading in a car?
Dealerships prioritise the condition of the vehicle above all. A car with updated maintenance records showing it was regularly serviced will net a better value than one without. Also, a car with little to no issues will garner a better trade in value because dealerships won’t have to send it for repairs.
The type of car and time of your trade in can also have an effect on the value. However, these other factors vary depending on the state of the used car market.
Need a car loan for your trade in?
Let the expert brokers at CarLoans.com.au lend you a hand! Our brokers are here to help you find the perfect car loan that matches your financial needs perfectly. Because we have such an expansive network of lenders and dealerships, you can rest assured that you’ll get competitive rates on your car loan. Learn more about your car finance options by calling 1300 889 669 or get a free quote today!