So you’ve decided on your next vehicle. You have researched amply price and interest rates. You’ve looked into all the local dealerships and did business with one in particular. You have done a wonderful job on the front end. What’s the front end, you ask? That would be the portion of the deal most people focus on.
rice,payment,interest rates etc. For most people, this is all there is. There is, however, one more piece to the puzzle. That piece is your trade-in.
A trade-in can make the difference between a few dollars difference per month and, sometimes, over 100.00 dollars. An average loan will run about $20.00 per month for every thousand dollars you borrow. If you borrowed 5,000.00 dollars, your payment would equal 100.00 dollars per month. So consider a trade that is valued at 5,000.00 dollars. If the regular fee for the new vehicle were 400.00 per month, this trade of 5,000.00 would drop the amount down to 300.00 per month. While every business may not bring a value of 5,000.00 dollars, it has some value if it made it to the dealership.
In the car business used car profit is made when you buy not sell. Meaning, you must try to get the trade-in for less than the market value to make a profit. Just as your focus is on getting the new car for the lowest price possible, the dealer’s focus is on getting your trade-in for the lowest price reasonable.
There are several ways to devalue a trade-in. Keep in mind that car dealers do this every day. They know just how to approach business in to set the stage for a low value. They may say things like, is it still under warranty? If you’re trading in a car over five years old, chances are, the answer is no.
The reason they ask you this is to get you thinking it could break down any time now and planting the seed in your mind to extend the warranty on your new car. Another tactic is to park the new car right next to your old one.
If your old car looks anything like older cars on the road, it will probably look even less desirable next to that shiny new car your considering. Again, just another tactic to get you thinking low number on your trade. The less you willing to accept, the more they stand to gain.
Here are a few tips for getting the most for your old car.
#1 Get it cleaned before taking it into the dealership. A clean car is much harder to devalue than a dirty one. A simple 20 dollar car wash might add hundreds to your appraisal.
#2 Service records. Most people take their car to a particular mechanic or dealer for their service work. A quick trip to that service station to collect a print out could also save you big in the long run. Being able to provide proof that you took care of your old car will undoubtedly show the dealer you don’t see your trade as a piece of junk but as something you’ve invested money in.
#3 Go online and get a Kelly Blue Book print out of your car. Showing the dealer that you already have a good idea of what a vehicle in good condition is worth will help you big time. It’s not enough to tell the dealer you think your car is worth more money, you must be able to prove it is.
Following these simple tips, the next time you’re thinking about trading your old car might save you thousands. If you have questions, send them in, and as always, I will do my best to help you. Thank you, and always remember rule number one, “Always Leave Happy.”