If you’re planning to get a new car, you may be wondering what to do with your current vehicle. Instead of relying on a private buyer, consider trading in your old car at a local car dealership. It’s a faster and more cost-efficient approach that offers many potential benefits.
However, getting the best possible value for your used car can be challenging. Don’t go to the dealership unprepared, follow these tips to boost your old car’s trade-in value.
Research Your Car’s Current Value
One of the first steps before even visiting a dealership for a quote is to get an idea of your vehicle’s current worth. Free online resources can help you determine your used car’s value, depending on its specifications.
One of the most popular online car pricing guides is the Kelley Blue Book, although you should also check out alternative sites and resources, such as AutoTrader or Edmunds. Although you can search by make and model, these services will usually ask you to enter your vehicle’s number plate or VIN code.
Factors that affect the base value of your vehicle include:
- Model year: It’s a simple fact: the newer the car is, the higher your starting offer will be. Consequently, an older vehicle fetches a lower price, and the older it becomes, the lower the value typically falls.
- Make and model:The make refers to the manufacturer, such as Acura, Chevrolet, Subaru, etc., and the model is the car’s nameplate, e.g., IS 300, Camaro, Impreza, etc. The more reputable the make and model, the more likely the starting trade-in value may be higher, Examples of the most popular nameplates in the United States include the Ford F-150, the Toyota Corolla, the Honda Civic, and the Chevrolet Silverado.
- Mileage: The number of miles your vehicle has traveled is used by consumers and dealerships to estimate how reliable or worn-out it is, even if it has been well-maintained. The higher mileage, the lower the value, regardless of the actual condition.
- Vehicle class: Sedan, Hatchback, or SUV are all descriptions of the car’s class or general type. Specific vehicle types are in higher demand than others, affecting your trade-in value.
- Condition: The actual physical condition of your vehicle has the most significant impact on your vehicle’s trade-in value. Beaters (vehicles with mechanical problems and a well-worn appearance) will always fetch a lower price than well-maintained, properly functioning cars. Fortunately, this is also one of the aspects you have the most control over. When looking up your vehicle in the Blue Book or other similar resources, you will likely have to enter your vehicle’s condition to get an estimate. Be realistic, and don’t overestimate it. You can also contact online car dealers and retailers to get a quote or a cash offer on your vehicle.
Get Different Opinions
If you plan to trade in your used vehicle, it is worthwhile to spend the time driving it to different dealerships and ask the local dealers for trade-in quotes. Each location has different needs and cars on the lot, and your vehicle’s value may vary significantly from one dealership to the next.
For example, suppose your used vehicle is a 2013 Honda Accord Coupe. If you find two other Honda Accords of the same generation at the nearest dealer’s lot, it suggests this dealership might have difficulty selling this model. Consequently, they may offer a lower trade-in value for your car.
If you drive it to another dealership located further away, you might be able to get a better deal from that location, especially if it turns out they’ve recently sold that model. This may indicate that the dealership has no issues finding customers for this model and would be happy to offer a higher price to take it off your hands.
Regardless of the dealerships you visit, ensure that the dealer makes the first move (do not suggest a value first) and ask for trade-in quotes in writing. A written quote provides information about your car’s value and excellent leverage for negotiating a good deal when you’re ready to trade it in.
Don’t Forget the Sales Taxes
Trading in your vehicle for another helps reduce the amount of sales taxes you need to pay. This is because the value of your old car is used to reduce the value of the new one; you pay sales taxes on the final value, not the car’s initial sale price.
For example, in Michigan, the sales tax on cars is 6%. If the new vehicle’s value is $33,000 and you trade in your old car for $9,500, you’ll have $23,500 left to pay to the dealership. The 6% tax applies to the latter value; instead of paying 6% of sales tax on the total sticker price ($1,980), you’ll pay 6% of the remaining value after the trade-in ($1,410, or $570 less).
Keep Your Car in Good Shape
Give your used car a check-up, establish a list of known issues, and fix as many as you can. Even repairing something as simple as a worn-out taillight or investigating the source of a “Check Engine” light can help bring up your vehicle’s value.
Many required fixes are relatively easy and inexpensive to do on your own. Your efforts will pay off, as every problem you remove is a problem the dealership won’t use to reduce the trade-in value.
Although ensuring your used vehicle’s history report shows no accidents or severe damage is essential, an even better way to show you’ve been taking good care of your vehicle is to keep maintenance records and offer to supply them to the next owner if they buy your used car.
Additionally, consider researching your car’s make and model for potential product recalls. According to the NHTSA, if your vehicle is eligible for a recall, your dealership will offer free repairs on the recalled parts or elements.
Don’t Neglect the Curb Appeal
While keeping your car in proper working order is essential to get the best trade-in value, don’t neglect the vehicle’s exterior appearance. Like houses, cars are often judged by their curb appeal, making how they look as important as their mechanical condition.
Give your car a thorough exterior and interior cleaning. You can clean the bodywork using car wash detergent and water. If your car has alloy or steel wheels, such as those found on many Jeep models, spend extra time cleaning them to remove dirt, grime, debris, and road film.
If your windshield and car windows aren’t tinted, you can clean them with commercial window cleaners, both inside and outside. If they have tinting, use a homemade cleaning solution of one part water and one part white vinegar.
Clean and detail the interior as much as possible using microfiber cloths dampened with water and disinfecting wipes. Remove as much clutter from the interior as possible (don’t forget to check under the seats), empty the ashtrays, and clean out the glove box.
If your car exhibits minor signs of damage such as star-shaped cracks in the windshield, dents or scratches on the body, chipping or fading paint, take it to a body shop and have the damage buffed out or removed by professionals. Although you’ll pay for these services, it is worth the investment and can increase the offer you receive for your trade-in.
Choose the Right Time of the Year
Correctly timing your trade-in can significantly affect the final value. There are multiple potential factors to consider here; the type of vehicle you want to buy, the current weather and season, and fluctuations in supply and demand.
Traditionally, the best calendar period to trade-in is the first two quarters. There are more buyers at the start of the year and the buyer’s perception of the model year.
Although it is purely subjective, many buyers may perceive a used car feels newer and, therefore, a better deal if its model year is 8-9 months away from turning a year older than just 2-3 months.
Draw the Line Between the Trade-in and the New Car
When you visit the dealership to initiate the trade-in negotiations, don’t let the dealer try to combine the trade-in and the purchase of your new vehicle into a single package deal and monthly payment options. Car dealerships commonly employ this tactic to process two transactions simultaneously, which gives them more control over the final price of the new car or the value of your trade-in.
Be as firm as necessary, negotiate the trade-in separately, and demand a written quote before moving on with the second part of the transaction.
Mind Your Mileage
The more you drive your car before you trade it in, the more it will depreciate. The average depreciation rate is approximately $0.08 per mile. An average car driven 10,000 miles per year loses 40% of its initial value within the first year and 60% within three years. The actual depreciation rate starts slower, then progressively increases as the mileage rises.
Traditionally, extended warranties for new cars expire after 30,000 to 40,000 miles. If your odometer shows 40,000 or less, you may get away with using it as a daily driver before you trade it in.
However, if you have more than 40,000 miles on the counter, every extra mile causes the value to depreciate even more. Consider limiting how much you drive your old car before trading it in to avoid reducing the final value.
Trade Your Old Car at a Trusted Dealership
At Hometown Chrysler Dodge Jeep Ram, we believe in keeping the car-buying process as easy for you as possible. Browse our inventory of new and certified pre-owned (CPO) cars, get a free trade-in estimate, or view our auto financing services on our website.
No credit? No problem! We offer auto loans and financing options regardless of your credit score. Visit our showroom today and ask for a test drive of your new ride.
