Get the most money for your trade-in vehicle by follow these easy steps. Let a 25 year veteran of the automotive industry guide you to ways to save money and time. Don’t get robbed the next time you trade-in a vehicle.
It’s time to go to the car dealership and replace old reliable. Instead of the last adventure selling your car to a private buyer, you find yourself too busy for the hassle. Well, too busy can cost you money if you don’t prepare properly. I spent 25 years in the car business and I will teach you quick and simple ways to get the most value for your trade-in. Otherwise I guarantee you, a few days later you will feel like you got robbed by a guy with a pen and a smile.
Game ON!!
Can’t tell you how many times I appraised a vehicle that was filthy both inside and out. It was a distinct sign that the person was not a prepared buyer and I immediately alerted the sales podium that “the game was on.” Now, before you start getting all holier than thou, try to understand, we didn’t solicit them, they came to us, if they came unprepared, is that out fault? Certainly isn’t.
Clean the vehicle before going to the dealership
Clean the vehicle inside and out. Not only do you not show your cards as unprepared, but you immediately increase the curb appeal of the car. Ask any used car buyer why they bought the car they did, they will most generally say, “it was really clean and looked well maintained.” Sending the car to a professional detailer that charges you $80 for a full wash and wax will be the best money you can spend and more than likely to increase the trade-in value by at least $500. The appraiser will have one less thing to do and spend internal money on if they have to try and sell your trade-in down the road.
Get a ballpark figure on what your car is worth
There are plenty of free resources on the internet that offer virtual appraisals online. Some of them are: Kelley Blue Book, Edmunds and Autotrader. Dealerships don’t use these sources for their appraisals but you can get a ballpark idea if you answer the questions about your car honestly. The biggest error most people make is describing the condition. Condition is subjective and people love their cars so they tend to look at that with a less than objective eye. Remember, these above sources are on the high side because they are click generated businesses that rely on people to visit and revisit. If they offer bad news, you will likely not return. They deliver the good news, not reality based.
Quick reminder on condition
- Excellent: 5% of vehicles. Looks brand new and no mechanical issues.
- Very Good : 25% of vehicles. Minor cosmetic issues but no mechanical problems.
- Good: 50% of all vehicles. Has minor cosmetic issues and no major mechanical problems.
- Fair : 15% of all vehicles. Requires both mechanical and cosmetic repair.
- Poor : 5% of all cars. It’s a wreck, don’t expect much more than 25% of the Good condition.
**Seasons Change–A convertible loses value in the winter. A 4×4 doesn’t do well in flat states and terrible when the summer arrives. Also dramatically loses all value when a spike in the national gas price.
How a dealership figures out a trade-in value
Dealerships as I said, don’t use the above sources for a car’s value. They use two sources generally, sometimes a third. Every used car manager carries two small books with them. They are called “Galves Used Vehicle Car Values.” They are dealer subscription based and published according to region and updated every 20 days or so. There is an edition for trucks and cars. They also publish them for motorcycles and anything else where as Dale Earnhardt once said, “Where rubber meets the road.”
Auction Market report
The second place a dealership will get their value is a car auction market report. This report is all the vehicles sold at a particular auction in a month’s time frame. Takes in for softer seasonal markets. This is the best value source for them if they have deemed your car an auction piece and they have no thought of retailing it in their used car lot. If they are going to bring the car to auction, they best be real close to the value of the car, or they will lose money at the auction easily. They are dealing with other car people there who know as much or more than they do about the secondary market.
The Wholesaler
The third source is a local wholesaler. Let’s face it, if your car has 150k miles, is 12 years old and has some issues, the dealer won’t bring it to auction and they won’t retail it on their lot, they will sell it top a local wholesaler. The dealer and the wholesaler work closely together and they expect each other to describe cars accurately and they are willing to offer a solid price to the dealer even before you have accepted the deal. The dealer has per-sold your car to them before you have even signed on the bottom line. That’s why in some cases, the appraisal process seems lengthy. As you can now see there is a lot going on behind the scenes.
Last few things that will give you more dollars in your pocket
Have title and lien release in possession–Dealership needs these things to expedite recouping their money on the trade-in value. No paperwork, it delays them getting whole which will cost you money cause they will make the necessary deductions approximating what the delay in time costs in dollars and you will be paying not them.
Separate negotiations
Avoid combining the buying of the new car and the trade-in into one negotiation, Negotiate both separately. Avoid and deny a trade-in until you have firmly established the bottom line on your purchase before introducing the trade-in. A nice way to do this is after you finish the deal. Just say politely with a smile, “You know, you guys were easy to deal with and I was going to sell the car privately, but if you can meet the price I found on Kelley Blue book I would gladly sell it to you.” The negotiations are open!
Sandbagged
The salesman knows he just got sandbagged but they will not blow up the deal for the trade. They generally will offer you a fair price and chalk it up to a smart consumer. Don’t worry the dealer has a ton of morons to make up any margin they lost.
Finally, check for a tax advantage for your trade-in in your state
In New York, a trade-in value is subtracted from the price of the car so, the net difference is taxable. That is a huge benefit to buyers and can be hundreds of dollars. A quick example: New Car is $25,000, trade-in is $10,000 that leaves a taxable difference of $15,000. That’s what is taxed, not the $25k. So in this case, you would save at 8% tax, $800 or 8 Benjamin Franklins. This is a good reason why a trade-in can sometimes trump the money made selling it privately since you don’t have the tax benefit of the trade-in.
JibbJabber 