5 Tips for Negotiating a Car Trade-In
Wednesday, May 10, 2017, 6:00 AM | Leave Comment
A car trade-in can be a great way to pay for the upfront costs of getting a new car.
It is important to be prepared so you can get the best deal possible on your trade-in.
Those who come prepared to the dealership will be able to reap the full value of their car with as little hassle as possible.
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Understand What Dealers Do With Cars
Many people mistakenly believe that a dealership will buy and resell any old used car they are offered. This is rarely the case unless the dealership specializes in used or older cars of a certain type.
Dealers offering a mix of new and used cars are only likely to put models that are three years old or newer on their lots for resale. The remainder of the used cars they buy will either go to auction or be scrapped and resold in pieces to regain whatever value remains in them.
This plays in important part in how you should approach the negotiation and preparation for your trade-in.
You may have more negotiating power on a newer car the dealer may resell on the lot, and you should work harder to get a good deal.
It may also be more important to ensure your car is clean and in excellent condition before you present it to the dealer. Cleaning up an older car to pristine condition may actually work against you.
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Know the Car’s Value
You can expect that a car dealer will at least try to sharply undercut the value of your car when they make their initial offer.
It is critical that you have a good idea of the car’s value from a source like Kelly Blue Book before ever walking into the dealership.
If you have offers from multiple dealerships, use them to negotiate against one another.
You should also have some numbers fixed firmly in your mind based on that research.
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First, have a starting offer value that is in the upper range of the value from your research. Don’t try to be too outrageous, or the dealer may be less likely to work with you, but asking for a trade-in at the upper range is expected.
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You should also have a price you want. This is what you are hoping to negotiate, keeping in mind you will probably not get the upper range.
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Finally, have a bottom price that you won’t go below. Be firm on this bottom price, and if you can’t get a dealer to negotiate above it, then find a deal elsewhere.
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Timing is Important
The timing of your sale is important. Dealers don’t want to have used cars filling up their lot space for very long, so they will be more likely to offer a good deal on a car they know they can resell quickly.
As stated above, the age of the car is one of the most important factors. The timing is also important.
If you have a model that obviously caters to a specific time of year, like a convertible, make sure you don’t go trying to sell it in the cold and rainy months or even on a cold and rainy day.
Time of the year can also be a factor. Car sales tend to increase dramatically in the spring as people want new cars for summer and may have tax return money they are willing to use to finance a new car.
Demand has a powerful effect on whether a dealer will offer fair money on a used car. If you offer a model that is in or is soon going to be in high demand, you will get a much better price upfront and negotiations will be easier.
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Clean the Car…But Not Too Much
The condition of the car you offer is an important balancing act. Obviously, you want to present the car as being in good condition and maintained inside and out. This is especially true on a newer model the dealer will be looking to sell right away.
If they feel the car is going to need a lot of touching up to be presentable to the next seller, they are going to factor those costs in the deal they offer you.
The car should at least be thoroughly cleaned inside and out and all personal belongings should be removed.
The extent to which you have the car touched up depends on the car’s age. In some cases, it may actually work against you to present a perfectly spotless vehicle.
Some dealers see this as a sign the seller is looking to get rid of the car immediately. The dealer may try to negotiate a low price under the assumption the seller really doesn’t want to take the car back home.
A good rule of thumb is to make sure your car is clean, but not necessarily detailed or like new.
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Negotiate Separately
If selling to a dealer, most people plan to sell their old car and buy a new car at the same time.
Even if these transactions happen on the same day, it is important to negotiate them separately.
Start with the new car and don’t mention you have a trade-in up front. If asked directly, just say you haven’t decided what to do with your old car yet. Stalling will let you get the best deal on both the new car and the trade.
Don’t offer the trade-in until the price of your new car has been finalized.
Some dealers will be less flexible on the price of the new car and may keep it higher if they know the customer is trading in or has already signed the old car away.
After all, if you’ve already lost your old car, you basically have to buy a new one at whatever price is offered or go without a car at all. Don’t give the dealer this advantage over you.
While negotiating with car salespeople can be stressful, a little research and preparation are all you need to get the best deal on your trade-in and new car purchase. Contact a company like AutoStart if you’re having trouble or have questions about the trade-in process.
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