Trading in your previous vehicle is a good way to save money on a new vehicle purchase. A trade in will reduce the amount of money you have to spend out-of-pocket or reduce the amount of an auto loan you have to take out. However, negotiating your trade-in value is the key to achieving these benefits. Here are five tips to make sure you get the most value for your trade-in.
Know the value of your vehicle.
Knowing what retail price your vehicle is realistically worth is an important tool for negotiating your trade-in. You can check your car value on sites like Kelley Blue Book. A dealership will attempt to offer a lower value for your vehicle in order to maximize their profit margin from the transaction.
For example, Kelley Blue Book states that for a standard 2015 Honda Accord with 50,000 miles that is in good condition, you can expect to get $13,801 from a trade in at a dealer but closer to $15,685 when selling directly to a private party. Knowing the value of your car can help you negotiate the price up from that $13,801 mark, as you will be knowledgeable about how much the car can actually sell for.
Watch your timing.
Timing can also play a role in how much you might get for your car. If gas prices have been rising lately, then the demand will be higher for eco-friendly cars with more miles per gallon. As a result, the dealer will likely be willing to offer more money on trade-ins for eco-friendly vehicles. Another example would be that convertibles tend not to sell as well when the weather is hot and muggy. Keeping an eye on what vehicles are popular and what time of the year it is can help with trading in your car. During a season where demand is high, you will have more negotiating power.
Spruce up your car.
Don’t spend a ton of money on your vehicle before you trade it in, but fixing up what you can make a difference in the value. Make sure the outside of your car is clean and that you have performed basic maintenance on your vehicle (checking tires, oil, windshield wipers, etc.). Additionally, try what you can to get any odors out of your car, even if you don’t think there are any. Your car may smell different to other people since you have gotten used to any scent within the vehicle. Once your car feels like a new vehicle you will have more pull when you attempt to push the trade value higher.
Have records with you.
If you have kept the records from any previous maintenance performed on your vehicle, bring these with you as well. Some dealers will be willing to offer more money for the trade in if they know specifically what has been done to the vehicle during repairs. Additionally, if the dealer attempts to question anything about the vehicle, you will have these records to validate your claims.
Negotiate purchase and trade separately.
Dealers may try to lower the trade amount by negotiating your purchase price at the same time. They do this in an attempt to earn more profit from either a higher purchase price or a lower trade value while deceiving you into thinking you are getting a good deal. Negotiating the two separately will allow you to lower your purchase price and then to raise your trade value without being drawn in by what seems like a good deal
