Trading in your vehicle
Many shoppers trade in an old vehicle to offset the cost of purchasing an old car. The advantage of trading in a vehicle is that it takes away the hassle of finding a buyer yourself, which, in periods flush with low-interest auto loans, may be difficult and time-consuming. It also reduces the tax base that you’ll pay on a new car, because you’ll only be taxed on the difference in values. But it also means that a dealership may offer you less for your car than it deserves because they incur expenses while trying to sell it and still want to turn a profit. To make sure you get the most for your car:
- Determine its worth: Find out the trade-in value by checking out online sites, such as Kelley Blue Book. By knowing your car’s Blue Book Value, you’ll be able to determine if a dealership is offering you a good deal on the trade-in.
- Take care of your car: Part of the car’s value depends on how well you’ve maintained your vehicle. When giving you a quote for the trade-in value, the dealership will factor in how much work it will take to get your car in salable condition on top of profit margin.
- Don’t negotiate ahead of time: Some car salespeople have been known to wow a potential buyer by offering a high trade-in value of their vehicle to get their business, only to strong-arm them when negotiating on the cost of the new vehicle. To know that salesperson isn’t just shifting money around, don’t offer your car as a trade-in until after you’ve settled on a price for a new vehicle.