I am not a huge proponent of trading in cars at the dealer. Customers can usually make more money by selling the car themselves.
Of course, selling a car on your own means you’ll need to advertise, field phone calls, schedule appointments, let strangers take your car on test drives, and probably deal with negotiations. Then, once your car is sold and gone, there’s the gap in time when you don’t have a replacement….
I’d say unless you’re making at least an extra thousand dollars over trade-in value, it’s not worth the trouble. So there is a time and place for trading in. If you go that route, here are some things you need to know:
The most important piece of knowledge to arm yourself with is the real value of the car you are trading. You can use the CarGurus DealFinder to look up your make, model, and trim and see the real, nationwide average price of cars with similar mileage. Each listing has its own price as well as the difference between that price and the national average. (If you see a gray dash in the circle next to the photo for a listing, that means there aren’t enough examples of that particular trim to determine a national average price. Most have them, though.)
Compare the DealFinder prices with those listed on Kelley Blue Book and NADA, and decide on a trade-in value you can live with. Then, stick with it! Be warned, though: Some dealers will use commercial wholesale price guides not available for consumer use, such as the Manheim Market Report, which will likely be lower than the price you want.
Don’t negotiate the value of your trade-in, though, until you’ve settled on the price you’ll pay for your new car. You should not think only about monthly payments – you need to negotiate and make your decision based on the car’s total price. Negotiate on the price of the new car, then your trade-in, then monthly payment options. That is crucial advice, and the process will take time, but going through it greatly improves the chance you’ll get a good deal.
Finally, make sure your trade-in looks like it’s in great shape. Fix the chipped windshield, make sure the car is washed and vacuumed, and if you can, trade it before the next 10,000-mile increment (78,000 miles looks better than 80,000).
With a little homework, it’s possible to get a good deal when trading in a car.
Go ahead and share your dealer war stories! Did you ever get ripped off – or a great deal – trading in a car?