Buying a new or used car is tough enough without worrying about how you’ll dispose of your current ride. You might believe that selling it privately is the only way to get top dollar, but before you do, consider the hassle factor. Coordinating a private sale means taking high-quality photos, writing descriptions, and paying for costly online ads, and that’s just the beginning. Add in stressful meet-ups and sketchy test drives, and the extra bucks you’ll receive when selling privately seem pretty hard-earned. Instead, searching for car dealerships will net you a long list of potential sellers, and each of them will happily – and fairly – value your trade.
Trade-in values are figured by a variety of factors, but the best way to get an idea of what your car is worth is to check Kelley Blue Book or Edmunds True Market Value. These sources offer easy ways to determine your vehicle’s value, whether you’re looking to sell it privately or trade it in on a newer model. You’ll need to know the specific year, make, model, and trim, along with any extras, such as optional equipment, upgrades, and packages. Simply enter this information into their easy-to-use online tools, and the system will give you a price range.
While KBB and TMV are great tools, they’re not the only data source. Many factors affect a vehicle’s trade-in value, and unfortunately, consumers tend to overstate their car’s condition. It’s less about embellishment than it is about not having familiarity with how dealers value trades. A car that appears to be in excellent condition may end up ranking closer to good or fair after a dealer has the opportunity to take a closer look. What are the factors that go into valuing a trade, and how can you ensure your car is set up to trade for the highest possible price? Here are our tips and insider secrets.
#5 Consider Timing
Is there an ideal time to reveal that you’re planning to trade your vehicle? According to U.S. News & World Report, the answer is absolutely yes. They suggest treating your new car purchase and your trade-in as two separate transactions. This gives you clarity on pricing and eliminates the potential for adding an extra margin to the vehicle you’re buying or adjusting trade-in value down to accommodate a bigger discount, both common tactics at less-than-scrupulous car dealerships. Instead, they recommend staying vague on your plans until after negotiations are complete on your new car.
Even better, take the time to find a reputable dealership with great customer reviews. Schedule an appointment with a sales consultant and spend some time getting to know them. A dealer that’s willing to spend time, answer questions, and manage the transaction at a pace that works for you will earn your trust. Dealers that put the emphasis on customer satisfaction want you to recommend them to your friends and family, so timing becomes less important.
#4 Get a Second Opinion
If you’re determined to trade your vehicle, it might benefit you to get a second opinion on its value. Separate from the online trade-in tools, an actual mechanic can help you strengthen your negotiating position once you’re ready to move forward at the dealership. They’re unbiased and honest, which can inject some much-needed reality about the condition of your vehicle.
Be careful here, though, because the appraiser might recommend minor fixes or upgrades (like a new set of tires) to boost your vehicle’s value. These improvements almost never pay off, especially if you’re trading your car to a dealership with a service center. The slight increase in value won’t offset the retail price you’ll pay for parts and labor.
#3 Don’t Be Aggressive
People believe negotiating a car purchase, and trade-in is only successful if someone gets strong-armed. The thing is, dealers know that today’s consumer is far more educated about pricing and they have more options than ever before. They won’t risk irritating you by haggling, but they also won’t bend just because you’re aggressive.
Dealers are for-profit companies, and just about the only retailers that have to continually justify and negotiate their prices. There is give-and-take, sure, but an overly-aggressive approach only creates animosity and tension. Consider confidently presenting your best offer and recognizing that 1) it’s bad business for the dealer to give their entire margin away, and 2) you catch more flies with honey.
#2 Be Aware of What They’re Looking For
It’s helpful to know how dealers value trades. They’ll likely conduct a quick visual inspection, looking for significant exterior damage, rust, or other signs of excessive wear. They will also check the windshield for cracks and inspect the interior, including checking for evidence that it was driven by a smoker. Remember, dealers are experts at recognizing red flags, such as evidence of bodywork (e.g., mismatched paint lines), so expect a reduction in value if they find any. They’ll drive the car, put it up on the lift, and thoroughly inspect it before determining its value.
Every vehicle has a Carfax report available that shows information about the quantity of owners, any accidents or insurance claims, and a recall history. Dealers will scan your VIN and run a Carfax on your vehicle, so they’ll know instantly about any problems that might affect value. Their research will also include checking current average sale prices on similar vehicles and ultimately make a determination about whether your trade is bound for the sales floor or a trip to the auction for a wholesale transaction.
#1 Don’t Forget About the Convenience Factor
It’s easy to balk at a lowball offer and start plotting your private sale, but before you do, remember the time and convenience factor. It’s easy and safe to trade your vehicle in: what’s the cost of that convenience? By the time you find a private sale buyer, you will have spent hours taking photos, writing copy, and placing ads. You’ll also spend money detailing your car and preparing it for sale, not to mention the extreme hassle of assembling the correct paperwork. It’s easy to underestimate the stress involved in private sales, not to mention they can be extremely unsafe.
You will rarely match a private sale price with a trade-in value. Sometimes these dollar figures are hundreds – even thousands – apart. The question to ask yourself is, do I want to handle my trade and purchase as quickly and efficiently as possible, and is that time savings worth sacrificing a little bit of money on the front end? Dealers aren’t looking to rob you of savings, but there is a price involved with prepping and reselling your car. That’s why they’re going to give you a bit less.
Find a Dealer You Can Trust to Get the Best Deal
The bottom line is, finding a dealer you can trust is the most important indicator of your overall satisfaction, including how your trade is valued. Reputable dealerships handle hundreds of new and used vehicle sales. They understand how to work within your budget and aren’t afraid to offer transparency throughout the purchase process. They partner with you collaboratively and don’t resort to pushy, aggressive tactics to close the deal.
Trades are important not only to get the price of your new car down but also to help the dealer keep a large inventory of quality used vehicles. It’s in everyone’s best interest to help customers decide to trade their vehicle instead of selling it privately. Buyers win by experiencing fewer hassles, and sellers win by increasing their inventory. So, finding a dealership for trading in or selling your car is really the best way to go.