Should You Trade In Your Car – If you live on or near a military base, you’ve probably heard radio and TV commercials for car dealerships that say something like, “We’ll give you the best deal on your old car. Late on your payments? No problem, we’ll pay your Loan no matter how much you owe.
Be careful to evaluate autotrade-in offers. If the advertisement claims that you are no longer liable for any amount of your previous financing, the advertisement may be incorrect. With more than 40 percent of car purchases in 2017 involving a “trade-in” vehicle, it’s important to understand the trade-in process so you can maximize the value of your trade-in and get a better overall deal. Here are some tips from the FTC.
Should You Trade In Your Car
Showing up at a car dealership without knowing how much your car is worth is like fishing without bait. You can make do with what you can find, but you’re more likely to get what you want with the right tools.
Sell Us Your Car! We Offer Top Dollar
Before you talk to a car dealer, take a few minutes to consult some online price guides to find out what your car is worth. You can also visit more than one dealership and request appraisals to get a better idea of your car’s value. Keep these quotes and use them along with online pricing guides as a starting point for negotiations.
If you own your car outright, it’s easier for a dealer to sell it. You still need to make sure the dealer’s value for your car matches online price guides (or other sources you’ve consulted) and then negotiate the best amount you can get for the car. The agreed trade-in value is deducted from the price of a new or used car. You pay the remaining amount for the new car in cash or with car financing.
Note that you can negotiate the exchange amount. Also know that if you insist on getting a very high trade-in amount, the dealer may be less willing to negotiate the price of the car and charge you more for the new car. Or the other way around: If you insist on a low price for the new car, the dealer can lower your trade-in price. Be prepared to walk away if you feel the deal is not right for you.
Things get more complicated if you still owe money on your exchange. Some dealers advertise that if you trade in one vehicle to buy another, they’ll pay off the rest of your loan—no matter how much you owe. But some people owe more on their car than the car is worth. This is called “negative equity” and the dealer’s promise to pay the full amount previously owed may not tell you the whole story, as that amount may be added to your new financing.
Value Your Trade
Negative equity has grown in recent years. In 2017, almost 1 in 3 trade-in vehicles had negative equity with an average amount of $5 195. We have heard from some service members and veterans that negative equity is increasingly common for the military population as well.
If you have negative equity, you should be especially wary of vehicle trade-in offers. Dealers can include negative equity in your new car financing. This will increase your monthly payments by adding principal and interest.
Here’s how it can happen: Let’s say you want to trade in your car for a new model. Your financial gain is $18,000, but your car is worth $15,000. You have negative equity of $3,000 that must be paid if you want to trade in your car. If the dealer promises to pay back that $3,000, it doesn’t have to be included in your refinancing. However, some dealers may add $3,000 to your new car financing or deduct the amount from your down payment. Either way, this would increase your total costs and your monthly payments: not only would $3,000 be added to the principal, but you would also finance it by paying interest on that increased amount.
If you have negative equity, either on your current car finance or on a rollover you already had from your previous finance:
Check Out These Tips Before Trading Or Selling Your Car
As with all aspects of the car buying process, it is important to educate yourself on how to trade a car to help you get the best value for your car.
This is the third post in our blog series written in collaboration with the FTC. Read the other three posts in the series on shopping for car finance, deciding whether to buy a new or used car, and be on your toes when it comes to add-ons. Learn more about auto financing and the car buying process at www.FTC.gov/cars and at www.cfpb.gov/auto-loans. So you are ready to buy a new vehicle. Assuming you already own a car, you’re probably wondering if trading is a viable option. Even if you have an older vehicle, you can take advantage of your used car to lower the cost of your new car, resulting in a lower car loan or down payment and potential tax savings.
The better condition your old car is, the better its private sale and exchange values, obviously. We can all easily imagine that a brand new looking car with no engine problems fetches a higher price than an older car, broken down car or damaged car. What isn’t obvious is how much work you need to put into your older car before taking it to the dealer for a trade-in evaluation. Major repairs are best left to the professionals – they can do the job for less money and won’t add the cost you paid for repairs to the replacement cost. However, the small fixes are worth the effort.
As a rule of thumb, making a good first impression at the dealership means giving your car a thorough cleaning, both inside and out. Of course, no amount of cosmetic upgrades can hide a blown engine, but buyers want to know that your car has been properly maintained. It will be hard to convince a dealer (or any potential car buyer) that your replacement is regular oil changes and worth good money if it looks like dirt.
Ways You’re Decreasing Your Trade In Value Pittsburgh Pa
Hand wash and wax outside first. You can pay a professional or do it yourself. If you take the wash into your own hands, make sure you use a proper car wash product, not dish soap, laundry soap, or any other household cleaner. It’s also best to use a special car wash sponge, microfiber cloth or lambswool wash cloth, and make sure to regularly wet that sponge, cloth or cloth in your bucket of car wash suds as you clean each part of the vehicle.
Applying wax after washing gives an attractive shine. Newer synthetic polymer-based waxes are easier to use than carnauba-based waxes, but both work as long as you apply them with a foam applicator in firm, circular motions. After covering the entire car, remove the excess wax with a clean microfiber cloth.
Go inside and remove those empty fast food bags and discarded rubber wrappers. Then delete all personal items or documents that have accumulated over the years. The only documentation you should have in the car is an organized stack of maintenance records stored neatly in the glove box.
Finally, take your car to a professional detailing shop or, if you want to save a few dollars, you can do the interior detailing yourself – shampoo the carpets, clean the windows inside and out, use ionizers and neutralizers to remove unpleasant odors and to enter the doorposts. Use a toothbrush to get rid of the stubborn crumbs and a screwdriver to reach the difficult buttons.
Sell Your Car For Parts
Check all your lights, inside and out, and replace any bulbs that have gone out. Bulbs are cheap and easy to find at any auto parts store.
Fog lights are also quite easy to remove, and clear glass gives your car a fresh look. You can pay to polish the lights, but you can do it yourself by rubbing toothpaste (yes, toothpaste – the white kind works especially well) on the lens cover with a cloth and an extra helping of elbow grease, washing it off with water and then let dry.
Check (and top up if necessary) the oil, radiator, brake fluid, transmission fluid and windshield reservoir. Sure, a car dealer can easily fill and change fluids, but if your oil is low or you’re running out of windshield fluid, the dealer may wonder if you’ve maintained your car properly, which could lead to a lower commercial result. Value.
In addition to topping up the washer fluid, you also need to make sure the wiper blades are in good condition. If not – if they are dry or cracked – buy a new pair of cheap squeegees. You can install them yourself, but if you’re not sure how, the auto parts store where you bought the wipers will usually install them.
Instant Trade In Estimate
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