Buying a new car can be a stressful process. But sometimes even more stress is the process of selling your old.
While selling your car on the private market typically nets you the most amount of money, you have to deal with poor communication and terrible offers just to find someone that may potentially buy your car. And the deal still might not work out.
If you don’t want the hassle of selling your car on the private market, or simply don’t have the time, trading in your car can be a good option. GOBankingRates asked a few folks about their trade-in experience, including how much money they saved, how the process went and if they’d do it again. Here’s what they said.
I Did My Research
The most important step to trading in your car is doing the research ahead of time.
Brett Schiller, founder of Fishkeeping Wisdom, did his research online. “I initially researched the market value of my car, and then compared it with the trade-in value offered by various dealerships,” Schiller said. “I also browsed online platforms to find the best deal on a used car that met my needs.”
Gareth Boyd, editor of Range Rover Fanatic, used several online tools to figure out what his car was worth. “First off, I got my current car appraised at several places to have a clear idea of its value,” Boyd said. “Kelley Blue Book was a helpful resource. Visiting a few dealerships allowed me to understand the trade-in value they were willing to offer, and it varied slightly among them. Simultaneously, I did an in-depth analysis of the new car I wanted to buy, negotiating the price down from the MSRP (Manufacturer’s Suggested Retail Price). Negotiations were more straightforward after having done my homework on the car’s value and the trade-in value of my old car.”
Andrew Kuttow, editor-in-chief of Lambo Cars, also used online research tools before going to the dealership. “Before I headed to the dealership, I did my research,” Kuttow said. “Using platforms like Kelley Blue Book and Edmunds, I got an estimate of my car’s trade-in value. It’s essential to be honest about the condition of your vehicle, as the dealers will thoroughly inspect it.”
I Visited Several Dealerships
Once you’ve done some research, you need to visit dealerships to get an idea of what cars are available for purchase. And it’s important to visit more than one to find the best deal.
Kuttow got quotes from multiple places before deciding on a car he wanted. “I didn’t settle for the first offer,” Kuttow said. “Instead, I went to multiple dealerships to get quotes on both my trade-in and the price of the new car I wanted. This helped me get a sense of what was a fair offer.”
You shouldn’t just walk into a car dealership, pick your car out and drive it off. You can save more by negotiating to get the best price.
Boyd saved thousands by negotiating the price of the car he purchased, along with getting a decent sum for his trade in. “In my case, the trade-in offer for my old car was $7,000 while I managed to negotiate the price of the new car down to $23,000 from an MSRP of $24,500,” Boyd said. “This meant I saved $1,500 on the new car price and effectively only had to finance $16,000.”
Kuttow added: “Trading in is essentially a sales process. I had to negotiate both the price of the new car and the trade-in value of my old one. I made sure to treat them as separate transactions to maximize my savings.”
Peter Jones, founder of Motor and Wheels, also visited multiple dealerships to get a better offer on his trade in. “I […] started browsing used car listings online and discovered that I could get a three-year-old compact SUV with 30,000 miles for around $15,000,” Jones said. “Eventually I got a quote from CarMax offering me $3,000 for my trade-in. Meanwhile, a local dealership offered me $4,000. Armed with both quotes, I went to another dealership. I was upfront about my trade-in offers and they came back with $5,000 for my sedan.”
I Saved Thousands Of Dollars
Trading in your car can save money, but how much? Here are some real-life numbers.
Jones saved money in repair costs, plus got thousands extra for his trade-in. “The SUV I wanted was priced at $18,000,” Jones said. “With my $5,000 trade-in value, I only had to finance $13,000 at 3% APR for 48 months. My new car payment was $250 per month — only $150 more than my previous car payment. However, I no longer had to pay for repairs every few months. In the first year alone, I saved over $1,200 that would have gone toward repairs. Over the life of the five-year loan, I will save at least $5,000 versus keeping my old car.”
Boyd saved money and time trading his car in. “Comparatively, selling the old car privately could have potentially fetched a slightly higher price, but the convenience and the savings on sales tax (since the trade-in value was deducted from the new car’s taxable amount) made the trade-in option more attractive,” Boyd explained. “This streamlined process saved time, and the sales tax reduction saved an additional amount, around $420 based on the 6% sales tax rate.”
Kuttow also saved a significant amount. “Overall, I was able to save around $5,000 from the price of the new car,” Kuttow said. “Not only did I get a decent trade-in value for my old vehicle, but I also managed to negotiate a bit off the new car’s price, thanks to the trade-in.”
It Was Worth It
Boyd had a great experience with his trade in. “Would I do it again? Absolutely,” Boyd said. “The time saved was invaluable, and the process was significantly simplified. The key is to be well-prepared: know the value of both your trade-in vehicle and the car you aim to purchase, and be ready to negotiate. This preparation made the transaction transparent, easy to navigate and ultimately satisfying. The financial savings, combined with the hassle-free experience, made trading in a highly appealing option.”
Kuttow agrees, and thinks the process is a great option for anyone looking to upgrade their vehicle. “Trading in my car was a convenient way to reduce the price of my new vehicle and saved me the hassle of trying to sell the car privately,” Kuttow said. “However, I believe it’s essential to be well-informed and prepared to negotiate to get the best deal possible.”
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