The average length in which Americans keep their cars is around 79.3 months. Have you had your vehicle this long? If so, are you ready to trade it in for a newer one? If you want to update to a newer car, you can bring your old one to a dealership for a trade. If you’ve never done this before, you might wonder, “how does trading in your car work?” Trading in a car is simple, yet you might want to complete a few steps before visiting the dealership. As you start planning on trading your car in, here are seven effective tips you might want to follow to help you understand how this works.
1. Clean and Detail Your Car First
When trading in your car, you must go through a series of steps. The first step is visiting a dealership that accepts trade-ins. When you arrive, tell them you want to trade in your car so they will begin working on the appraisal.
Dealerships always appraise vehicles when people trade them in, as this reveals how much they are worth. If you want the appraisal to be as high as possible, you must present a clean vehicle.
Therefore, you might want to spend some time cleaning and detailing your car before you go to the dealership. When cleaning it, make sure you wipe everything down and vacuum it out.
If possible, you should also shampoo the carpets. Running your car through a car wash on the way there can also help. Removing all your personal things is also a helpful step to complete before going.
2. Make Sure You Fix Everything
When the dealership appraises your car, they might reduce the value if it has things that are not working well. While you shouldn’t fix any significant, costly problems, you might want to repair any minor issues that are visible.
Fixing small things and cleaning out your vehicle might help with the appraisal. The car’s appraisal tells you how much the dealer will give you for the vehicle, and this amount affects your new car purchase.
3. Find Out Your Car’s Value
Another one of the top tips for trading in your car is finding out its value before you go. To find out your car’s value, you can look it up online. There are plenty of sites that provide instant car values, and these typically provide a range in value.
For example, you might discover that your car is worth somewhere between $3,500 to $5,500 for a trade-in. If this is the case, you should expect to receive an amount that falls within these two amounts.
If the dealer offers an amount that is less than the lowest amount, you can question it. You have the right to negotiate on the value the dealer offers you for your car. The dealer can say no, but it is worthwhile to try to negotiate.
4. Know How Much You Owe on It
When learning how to trade in your car, it’s also essential to find out how much you owe on it. If you already paid off your car loan, you owe nothing on it. In this case, you should bring the car’s title with you to the dealership.
If you still owe money on the vehicle, you must look up the loan balance. Knowing how much you owe is vital, as it could affect the amount you must pay for your new vehicle.
5. Learn How the Dealer Handles the Trade-In Value
If your car is paid off, the amount of money the dealer offers for it will reduce the purchase price of the car you buy. For example, if the dealer offers $4,000 for your car and the new car’s price is $19,000, you will only have to finance $15,000.
If you owe money on the car, this works slightly differently. If the dealer offers more than you owe on it, the difference decreases the purchase price of the new car you buy.
If you owe more money than the dealer offers, you must rollover the deficit. The deficit is the difference between the amount the dealer offers and the amount you owe.
In this case, you would have to finance more money than the purchase price of the car you’re buying. Rolling over a loan is not always a bad idea, but it will lead to higher monthly car payments.
6. Handle the Trade-In Separate From the New Car Purchase
A lot of dealers like to bundle trade-ins with new car purchases. When they do this, they don’t really explain how much they are giving you for your trade-in or how much they are charging for the new car.
Instead, they give you an amount that settles the deal. It is typically better to keep the two transactions somewhat separate, though. By keeping them separate, you can gain a better understanding of the actual numbers in the deal.
7. Visit a Dealer That Has the Car You Want
One of the last top tips for buying a new car with a trade-in is to shop around before you start test driving vehicles. You can shop around by looking online at cars for sale.
It’s vital to shop around to find the best prices for vehicles. Shopping around also gives you an idea of the going rates for specific car types.
Finally, shopping around helps you save time. If you find a dealership that has several vehicles you’re interested in, you can limit your visits to that dealer only.
When you arrive, you can ask them to appraise your car while you begin test driving the cars you’re interested in buying.
How Does Trading In Your Car Work? More Tips and Information
Does this information answer your question of “how does trading in your car work?” If so, you might want to get started with the process by cleaning your car and shopping for a new one.
If you enjoyed this blog, check out the rest of our site for more informative articles on all kinds of topics.