Understanding Your Cars Price And Value
Youre likely to see four types of prices when youre dealing with trading in a car: wholesale, trade-in, private and retail. Heres how each price works:
- Wholesale price or value: The wholesale price is the vehicles auction price. Some dealers purchase used vehicles at auctions and resell them. The price they pay is the wholesale value, and it is generally the lowest of the four prices you might see when looking at trade-in value.
- Trade-in value or price: If you trade in your vehicle, you could generally expect a value close to the wholesale value of the vehicle. Your vehicle may be worth more if there is a high demand for your particular vehicle or its in great condition.
- Private sale price or value: This is the amount you could expect if you decide to sell your vehicle to another consumer in a private sale, say through Craigslist or other platforms. This number is usually higher than the trade-in value.
- Retail price or value: The retail price is what you would expect to pay for a car at a dealership.
Determine Whether You Still Owe Money On Your Current Car
You may be upside down, or have negative equity, on your car loan. When you have negative equity, you owe more on your car than its worth. In these cases, you may still be able to trade in your car. But the outstanding balance on your old auto loan could be rolled into your new car loan, which can increase your monthly payment and potentially make you even more upside down.
How To Trade In A Financed Car
- Determine how much you owe. Find out how much you still owe on your current car by consulting your lender and asking for the payoff amount.
- Check to see how much your car is worth, using the valuation tool on Autotrader. You can also solicit cash offers from dealers using the Instant Cash Offer tool.
- Select a car. Pick out the new car you want to buy.
- Calculate payment. If you owe more on your current car than it is worth, expect to have that difference added to the loan amount of your new purchase.
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How To Trade In A Car
If you decide that trading in your car is your best option, it is important to learn how to get the most money out of the transaction.
1. Know Your Cars ValueDealers always want to pay the least amount possible. For this reason, some attempt to low-ball the consumer with a price thats below the net value of the trade-in.
If you dont know what your car is worth, youre likely to accept any offer. Therefore, do your own research before stepping foot on the dealers lot. Go to Kelley Blue Book online and enter the make, model, year, mileage, and condition of your car to learn the trade-in value. Print a copy of this information and bring it to the dealership.
2. Fix Up the CarAny cosmetic damage to your car can lower its net value and cause a low trade-in value. You dont have to give your car an entirely new paint job, but it doesnt hurt to clean up the interior or exterior a bit before speaking with a dealership. Shampoo the carpets, drive the car through a car wash, purchase touch-up paint to conceal minor scratches, and repair dents. Simple repairs can add significant value to your car and increase the trade-in offer.
3. Shop AroundShopping around does more than get you the best interest rate on your auto loan or the lowest price on your new car it also helps you get the most for your trade-in. Visit multiple dealerships and request an estimate to learn the value of your trade-in. Keep copies of your quotes and use this information as a bargaining chip.
Shop Around For Trade
Trade-in offers can vary, depending on what the dealer already has in inventory, the cars condition and how well the dealer feels the car will sell. You could prevent some of the back-and-forth negotiating at one dealer by getting a few trade-in quotes from different dealers. Get a quote from one, go to another and ask it to beat what the first offered. Be sure to get all offers in writing. Here are some places you could go:
A different brand dealership. Take your car to a dealer that does not sell your cars brand. An example would be taking your Ford to a Nissan dealer because a non-Ford dealer may offer you more. The reasons behind this are that there are fewer Fords with which to compete and If the car you are driving was a popular rental, lease or fleet model, they also transact at lower prices, says Matt DeLorenzo, managing editor for Kelley Blue Book. If you go to a dealer of the same brand, you could be competing against those depressed prices with your privately owned vehicle.
A used-car-only dealership. Places like CarMax advertise fast, free quotes on trade-ins, so stopping by may be a pretty painless way to get a written trade-in offer.
Online services. Some sites offer to buy your trade-in online. Whether you trade in your car for a new one or sell it using an online site, an offer from an online service might be useful. KBB Instant Cash Offer is one example of a site you could use.
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Negotiate Or Close The Deal
Once you have appraisals, you have a couple of options. You can either take one of the offers you have or negotiate for a better price . If the Edmunds offer is the highest, sell it there. If you have your paperwork in order, you could be done in 30 to 40 minutes. But if you are upside down on the car and need to fold the loan balance into your next car’s financing, the dealership is the best place to do so.
If you’re deciding between two dealerships with similar offers, you might want to lean toward the one at which you intend to buy your car. This tactic gives you some leverage since you’re giving the dealership business on both the trade-in and the car purchase.
The first trade-in offer at a dealership is often on the low end, so there’s room to negotiate. Say something like this: “I intend on buying a car from you today, so if you can improve on the trade-in price, I’d love to give you my business.”
Another strategy is to use the Edmunds appraisal as a guide. Say something like this: “I’ve done some research on this car and it looks like the Edmunds trade-in value is slightly higher than your offer. I realize it’s an average, but can you beat this price?”
At this point, you can either take what you’re being offered or try to sell the car yourself. Some people may even choose to keep the car as a daily driver rather than pile miles on a new car.
How To Trade In Your Car In 6 Steps
Technically, all you need to do to trade in your car is bring it to a dealership, pick a new car and sign the paperwork. But you probably wont get the best trade-in value. These steps can help ensure you dont go into a trade-in blind and get a raw deal.
Step 1: Get an estimate of your cars value
Start by getting an estimate of your cars trade-in value online so you have a number in your head. Be prepared to have the following information on hand to get an accurate estimate. If your cars been damaged in any way, you might want to take it to a mechanic to get it appraised, since its value might have been affected.
- Condition level
- Your postal code
Below is a list of some of the most popular car value estimator sites in Canada and what factors they use to calculate your cars value before the trade in.
Step 2: Calculate your equity
Already own your car outright? You can skip this step. If youre still paying off your loan but want to trade in your car, find out if you have positive or negative equity by subtracting your loan balance from the trade-in value.
Step 3: Gather your documents
- Loan account number
- Drivers license
Step 4: Get quotes from a few dealerships
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Pros Of Trading In A Car
The most significant advantage to trading your car in is that it can save you from dealing with the stress and hassle of selling it on your own. Selling a car requires identifying the right price, posting the car for sale where people will see it and dealing with prospective buyers. But when you trade it in, the dealer does a lot of the heavy lifting for you.
In most states, theres also a tax advantage to buying and trading in at a dealership, Nana-Sinkam says, because in those states, they only charge tax on the difference between the trade-in value and the new vehicle price instead of paying full tax on the full purchase price of a new vehicle.
Finally, trading your car in can simplify the steps between selling your old car and buying a new one. Rather than going multiple places, you can take your old car to the dealership and use the trade-in value as equity toward your new car.
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Get An Estimate From Several Dealers
Getting multiple estimates can help you make sure you get the best price. You can get estimates from the dealer where youre considering buying your vehicle, as well as from other dealerships that sell your cars make and model. For example, if you have a Toyota, your local Toyota dealer may be willing to buy your vehicle back from you. Consumer Reports also suggests taking the vehicle to a used-car dealer, because theyre often looking to buy well-kept vehicles with low mileage. Pay close attention to any special offers the dealer provides and read the fine print carefully. Some may guarantee a certain value for your trade-in, even if its in poor condition. Others may claim theyll pay off your loan, no matter how much you owe on it, when you trade in your car. But if youre underwater, they may just roll over your negative equity into your new car loan. Do your research and ask the right questions when an offer seems too good to be true.
Fantasy: Dynasty Trade Value Chart
In an effort to help you find trades that could improve your fantasy team, we present the Dynasty Trade Value Chart.
You can use this chart to compare players and build realistic trade offers. Values are based on 12-team PPR leagues.
Follow the links below to see the trade values for each position.
Dynasty Rankings & Trade Values
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What Is Trade Equity
Trade equity is the difference between what your vehicle is worth and how much is still owed on it. If your car is paid off, its entire value is equity that you can use as a down payment.
At the same time, let’s say you owe $6,000 on your loan and the dealership is offering $8,000 for your trade-in. In this case, you have $2,000 of equity that you can pocket or put toward your next vehicle to knock down its price.
You should look into where you stand with your trade-in by doing some research before heading to a dealership. Figure out how much you still owe by contacting your lender and asking for a 10-day payoff amount this will be your remaining loan balance plus 10 days’ worth of interest charges, or the rough amount a dealership needs to pay when you trade in the car. Then, you can either research your car’s value on vehicle valuation sites like NADA or have it appraised at a few dealerships to see what they’re willing to offer.
If you find that you owe more on your loan than the car is worth, then you have negative equity, which can complicate the trade-in process.
Do You Need The Title To Trade In Your Car
If you own the car, meaning there’s no loan remaining on it, you’ll need to bring the vehicle’s certificate of title to the dealership for a trade-in. Selling a vehicle without any proof that you own it is illegal in most places. To replace a lost car title, contact your state’s department of motor vehicles or the location where you bought the car. You might need to pay a small title replacement fee.
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Payoff Amount And Trade
If you plan to trade in a car you still owe money on, first contact your auto loan lender and ask for your payoff amount .
Price your car. Look up the current trade-in value of your car on a pricing guide.
Compare values. Subtract the payoff amount from your cars current trade-in value.
Though the final trade-in price is negotiable, youll now have a sense of whether you have positive or negative equity in your current vehicle.
Disadvantages Of Trading In A Car
Trading in a car isnt always the best option. Consider the negatives before making your decision.
1. You May Get Less Money for Your CarTheres no doubt that trading in a car to purchase a new one is simple and convenient. But too often, the amount offered by dealerships is much less than the private party value.
For example, the private party value of a 2009 Toyota Camry XLE in excellent condition with 30,000 miles is approximately $19,479. However, the trade-in value for the same car in the same condition is only $17,426 a difference of about $2,000.
2. You Limit Where You Can Buy a CarWhen a dealership appraises your car and agrees to buy your car, youre obligated to buy your next car from that dealership. If the dealership doesnt have a car that you want, you cant trade in the car. There is no provision that allows you to trade in a vehicle at one dealership and purchase from another, nor at a later time.
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Can You Trade In Your Car If It’s Damaged
As long as the damage isn’t extensive like missing bumpers and shredded fenders, they’ll take your car on trade. Because body repairs are expensive, trading in a damaged car won’t be kind on your trade value. But if your car has been deemed salvage or is an insurance write-off, you might not be able to trade it in.
How To Trade In Your Car
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Trading in a car is the Achilles’ heel of the car-buying process because its tough to get the dealer to give you the full value of your old car. But understanding how to trade in a car and how to gather offers will help you maximize your trade-in’s value and get a better overall deal.
When you trade in your car, your old vehicles value is deducted from the new car price. To get the highest amount, its essential to know that you can separately negotiate the trade-in value and the new car price.
Well break the trade-in process into separate steps and show you how to:
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Things To Consider When You Still Owe Money On A Car
The first thing youll need to do is determine how much you still owe on your current auto loan. Its best to check with whoever is financing your loan to get the exact payoff amount.
It could be different from what you see on your most recent statement due to interest calculations or possible prepayment penalties and other factors. Next, understand that if you owe more on the vehicle than it is currently worth, the dealer will likely shift that amount into the payments of your new vehicle.
As an example, if you owe $15,000 on the car but it is worth only $12,000, that $3,000 difference will be added into the financing for the purchase of your new car.
What you owe on your trade vs. what it is worth are two different things, said Charles Cannon, general sales manager at a BMW dealership in Texas. A lot of times, clients want what they owe on their vehicle.
But that might not match the vehicles actual value, Cannon said.