If you're a consumer, selling your used car to a dealer for credit towards the purchase of a new vehicle is considered a trade-in. This section is designed to provide you with information about trade-ins, including the advantages and disadvantages associated with the vehicle trade-in process as well as the steps involved with preparing your car for trade.
To begin, when you trade-in your vehicle, you don't need to worry about advertising the car to prospective buyers, including writing an ad, posting an ad in a print or online publication, or paying for the ad once its posted.
Additionally, you don't have to entertain a host of prospective buyers by fielding inquiries, setting appointments, showing the vehicle or taking test-drives.
Finally, the process involved with transferring credit of your trade-in towards the purchase of another car is relatively easy. Additionally, the dealership handles the bulk of the credit, transfer and sale documentation, and in most cases, all thats required from you is your signature on the paperwork.
As we mentioned in earlier sections, when you sell your car to a private party, you stand to make more money on the deal and, ultimately, more profit.
When you trade-in your vehicle, however, you typically end up getting less money for your vehicle than you would if you sold it outright. This lower value is directly related to the costs the dealer incurs for flooring, advertising, transporting and selling the vehicle. As a result, the dealer pays less money for the car in an effort to cover the potential costs associated with reselling it.
In our Preparing your Car for Sale section, we offer a detailed overview of the steps involved with preparing your car for resale. These same rules apply to the trade-in process as well. Let's look at a few of the pointers outlined in our earlier section.
Detail Your Car
When it comes to selling your used car, think clean. A dealer is going to appreciate (and will potentially pay more) for a car that looks good, one thats shiny and clean on the outside and one that smells good and looks good on the inside. Most importantly, a dealer will see that you care about the car and have kept it in good condition, a psychological element thats extremely important in any successful used car sale.
Repair Your Car
When it comes to making repairs to your used car, you need to determine whether or not the repairs will actually increase the value of the vehicle at resale time. Most importantly, you need to determine if you'll be able to increase the selling price of the car enough to recoup the cost of those repairs. When it comes to safety or emissions requirements, we suggest you have a certified mechanic inspect the vehicle and make sure it meets or exceeds state requirements to make the vehicle roadworthy.
Your car may also need repairs to make it operate properly. In this instance, we suggest you fix the vehicle to ensure it functions correctly before you sell it.
Organize Your Records
Nows the time to collect and organize your maintenance records, if you've kept track of the service your vehicle has received during the time you owned it. Any and all fluid changes, tire rotations, paint or body repairs, engine repairs and service and any other related maintenance documentation is important to have because it demonstrates to a dealer the care the vehicle has received during the time you owned it. If your car has been serviced at a dealership, you can call that particular dealer and ask for a copy of the service history.
We also suggest you obtain a detailed vehicle history report about your car based on its VIN number (the cars vehicle identification number) as back-up documentation about the validity of the vehicles title and mileage as well as other important historical information.
Get a Value
To begin, you need to research the vehicles trade-in value or low retail value (depending on the year of your car) by inputting the make, model, year and mileage information at the NADAguides.com Used Car Information Center. Once you've inputted this information, you'll be provided with a value report outlining several different valuations, including their descriptions.