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Buying a New Car? Use These 4 Trade-In Tips to Max Out Your Car’s Value
When buying a new or used car, you have the option to keep your old car, sell it privately or trade it in at the dealership. A private sale will typically net you more money because a dealer has to worry about profit when it buys your car, so its offer is typically lower than what your car is actually worth.
However, selling your car privately can be a major inconvenience. You have to keep the registration and insurance active on your old vehicle, and regularly market it on social media, free sites like Craigslist and Cars.com, paid sites like AutoTrader, and traditional media.
And the worst part? You’ll have to brave meeting strangers in public locations and let them take your car for a spin. After finding a buyer, some states require you to handle all the paperwork together at everyone’s favorite place: the DMV.
The amount of work and hassle associated with private sales leads a large portion of the American public to just trade their vehicles in. In fact, according to Edmunds, 48% of all car purchases include a trade-in.
But be careful: Just as you want to get the most out of your old car, so does the dealership. That means it wants to pay as little as it can and then sell it for as much as it can. Here are some ways you can get the most out of your trade-in.
1. Research, Research, Research!
The internet is your best resource when it’s time to trade in your vehicle. Determine the value of your car with tools like Kelly Blue Book. Include all your car’s special features, like navigation, premium audio system and anti-theft system, but be honest with yourself as you evaluate your vehicle’s condition. Researching your vehicle’s Blue Book value as if it were in perfect condition won’t set real expectations if the hood is dented, the cloth has burn holes and the check engine light is on.
But the Blue Book value and other tools only tell you part of the story. Bankrate also recommends doing research on dealership websites to see what cars like yours are selling for in your area. If your local market is oversaturated with black 2010 Toyota Camrys, a dealership is likely to offer you less than it would if the car were in high demand and difficult to find.
Finally, get your paperwork in order, including your maintenance reports. Being organized is a good sign to the salesperson that you have done your homework. Plus, these documents are helpful in proving you’ve taken good care of your vehicle.
2. Prep Your Car for Sale
Experts are divided on how much work you should do to your car before driving it to the dealership. Should you take it through the car wash? Should you get it detailed? Should you fix those scratches?
Edmunds unequivocally says “no,” claiming that it is a pure myth that you should pretty up your car before bringing it in. In fact, Edmunds calls this a mistake and a car-buying myth, arguing that a freshly washed and detailed car is effectively showing your hand to a salesperson. It says you‘re interested in purchasing a car that day, destroying any chance at effective negotiating.
Others, however, disagree. While Bankrate doesn’t call for complete detailing, the experts do argue that removing smoke and pet odors, and cleaning out your personal items can make the car more attractive to a dealership. Former car salesman and author of Inside the Minds of Car Dealers, Ray Lopez, told NerdWallet that a thorough wash and vacuum (or even detailing) could net you an extra $500 in the negotiation process.
My partner, Nick Kreider, has worked on cars his whole life, engaging in private sales and dealership trade-ins. He told me that he details every car he trades and repairs any issues he’s comfortable taking care of on his own, like dents and scratches. In doing so, he has managed to get $500 above the Blue Book value for his trade-ins, most recently with a 2015 Chevy Malibu.
“But if you can’t do those things well,” Nick told me, “you’re better off leaving it alone.”
3. Negotiate Like a Pro
You might do awesome research and have your car looking as new as the day you bought it, but if you don’t negotiate well, the salesperson can lowball you.
“I always act like I don’t need the trade-in,” Nick explained. “I usually just let them know that I’m seeing what my options are. That forces them to do the work to get me to sell.”
But when you do discuss the trade-in, make sure the salesperson knows that you’ve done your homework and know exactly what it’s worth. Don’t forget to let them know what extra features your car might have that could increase its value, such as remote start or all-wheel drive.
Experts also advise negotiating the new car sale and the trade-in separately. Rebecca Bernard, editor at The News Wheel, told me, “I negotiated the price of the car before I said I was trading my old car in. That way I had them as low as they would go without considering what loss they were taking on my super-old Focus.”
Doing this is also beneficial because it keeps dealerships from finding other ways to make up value lost on your trade-in. If you determine the trade-in value before settling on the price of the new car — and the salesperson feels like they’re taking a hit — then the salesperson is much more likely to find a way to recoup that loss in the new vehicle’s purchase price.
Jenny Liddic, another trade-in negotiating pro in Dayton, Ohio, who most recently got a good deal when trading in her Dodge Caliber, told me she negotiates via email instead of going in and doing it in person. “Trading in my Dodge Caliber, I had the dealership check it out to give me a price, took it home to ‘think on it’ and responded via email to negotiate a day later.” The dealer accepted her higher counter, and Jenny felt less pressure by avoiding making the decision while on the hot seat.
4. Shop Around
Perhaps most importantly, never accept an offer that you are not comfortable with. You don’t have to buy your new car from the first dealership you go to. In fact, visit quite a few before making a decision.
In terms of your trade-in, you are likely to get the best offer from the dealership that services your vehicle. Katelyn H., who works in the service department at a Honda dealership, told me, “You’re always more likely to get the best trade-in at the dealership you service at because they have all the service records for your car. It’s an easy transfer/resell to a new customer, and it’s easy for the dealership to see what’s been done to the car throughout its life.”
Another option is to go to CarMax before taking your car to a dealership. According to Edmunds, CarMax will give you an appraisal following a detailed vehicle inspection. That appraisal will be in writing and is good for seven days, giving you enough time to visit multiple dealerships and use your CarMax appraisal to try to get a better offer.
Sometimes, however, your best offer will come from CarMax, in which case you should absolutely sell there instead of the dealership. It’s fast and easy, but it does mean a few extra steps compared to the dealership sale.
Ultimately, you get to decide where to sell your car. If you have the time and are willing to put forth the effort, consider selling your vehicle privately. But if you like the convenience and ease of a dealership trade-in, arm yourself with the tools to make sure no salesperson can take advantage of you.
Timothy Moore, a Nashville-based editor and writer, has written for the automotive industry for five years. He currently drives a Hyper Blue 2017 Subaru Crosstrek and wouldn’t trade it for the world, but maybe for a Tesla.