Get the Best Value for Your Trade-in
It might seem easy to make money on your trade-in—just get your car in tip-top shape and you’ll get the most money for it, right? Well, that’s not always true and can sometimes lead to spending more money than you’re getting back, so I’m going to walk you through the basic steps of how to get the most for your old car.
Factors You Can’t Control
Before we cover the things you can affect, let’s cover the ones you can’t. These include:
- Market Trends
- Market Value
Dealers are going to look at their bottom line first. They know what kinds of cars they can and can’t sell easily, what models/brands are popular, and what kinds of vehicles sell well at auction. Then there’s the condition of your car—you can’t reduce the number of miles you’ve driven, or how many years old it is, and the dealership will take these into account. So be aware that these not-so-negotiable items will be factors in the final value of your car.
Focus on Your New Car First
Your trade-in should be looked at as a secondary task when compared to the new car shopping process. It’s much more important that you end up in a vehicle that fits your needs and your budget than it is that you get every last penny for your trade. Find a car you like and negotiate a price prior to even presenting your trade-in as a token. This won’t always be possible, but delay mentioning the trade-in as long as you can because any amount they give you for your trade is easily hidden in other costs/fees for your new car. And beware of dealerships that offer “$(fill in impressive amount) for your trade, no matter its condition!” You will often find the starting prices for their cars will be noticeably higher than other dealerships.
BEFORE (not after, BEFORE) you go to the dealership, you need to have an idea of what your car is worth. Use Kelly Blue Book, the National Automobile Dealers Association (NADA), Autotrader, Edmunds, or other comparable reference sites. Use two to three different websites and estimate the high and low values on each of them. Make sure you remember these numbers so that you have them in mind when you start negotiating.
The dealership will factor in that first list of things that you as a seller cannot control. Specifically they are looking at market trends—what sells and what does not in their specific area and at their specific dealership. Just because you see a certain value listed online does not mean your car is worth exactly that much, but it is certainly a step you want to take prior to entering negotiations.
Clean… But not too clean
If you walk into a Vermont dealership in the middle of spring with a spotless car, tires shined up and everything, what do you think the salesman’s first thought is? Probably “they’re trading this in no matter what, so time to lowball them.” The truth is that you really want to strike a balance when you bring your car in to be appraised. You don’t want trash and empty bottles kicking around inside, but skip the professional detail job. Give the exterior a quick scrub, make sure there aren’t any big chunks of mud stuck in the wheels or suspension, and give the engine bay a quick but careful scrub-down.
Fix the things you can handle yourself because those maintenance projects are often used to judge whether or not a vehicle has been taken care of. Make sure the oil is topped off, the coolant reservoir is full, and that there’s some windshield washer fluid in it. If you get your oil changed at a shop, make sure the sticker is up to date. Verify all the headlights, taillights, and turn signal bulbs are in good working order. If you have any add-ons like cell phone holders etc. that you can easily remove, do so before you take it in for an estimate. The closer to factory stock the car looks, the more it will be worth. Likewise, aftermarket stereos, body parts, or anything else of the kind should be removed and replaced with factory parts when possible. These items aren’t going to add any value, so you might as well keep them for your next car or sell them separately on Craigslist or a similar site.
Repairs & Intensive Maintenance
Beyond the basics, what is actually worth doing? The thing to keep in mind here is that unless you are very mechanically inclined, a dealership can probably fix major things cheaper than you can. They get discounted pricing on things like parts and tires, and have mechanics on staff, which reduces their labor cost. The dealer will pay special attention to your tires and check engine/warning lights, so if your tires are completely bald, they may be worth replacing (maybe with a good set of used tires).
Note: If you have an extra set of wheels and tires, you can usually get more money for those by keeping them and selling them on Craigslist or Front Porch Forum because a dealer typically won’t advertise a car for sale with extra wheels.
Look at the Outcome
Be sure that you don’t get too hung up on how much you are getting for your trade. If Dealership A offers you $8,000 but Dealership B only offers you $5,000, take a very close look at the rest of the picture. It’s very likely that the final price at both dealerships will be much closer than $3,000. So get out there, do some shopping, find a car you like, get down to negotiating, and, finally, think of your trade-in as a cherry on top. It will help you get into your new vehicle more affordably.
Don't buy your next car without reading our Car Buying 101 guide to car shopping.
About Nate Messier
Nate is a Senior Consumer Loan Advisor in our eCommerce department, and works with members via remote channels to help with their borrowing and financing needs. Nate owns a home in Barre with his wife Lynsie, and his two year old son, Wyatt. In his spare time, he enjoys mountain biking and woodworking.