If you are looking to purchase a new car, it might be worth considering trading in your current vehicle to use as a down payment. Using your old vehicle as leverage to buy a newer car can be a smart financial move. The key to purchasing the vehicle you want at a reasonable price and getting a fair deal for your trade-in is doing your homework before entering the dealership.
How can I trade-in a vehicle?
The immediate benefit of a trade-in is that it can bring down the price of your new car when you are buying from a dealer. When trading in your vehicle, the value of your old automobile will be deducted from the new car’s price. While the perk of saving money on a new car may sound great, keep in mind that you may not obtain the total value you could otherwise get if you had gone with a private sale. But understanding how to trade in your car and how to gather offers will help you maximize your trade-in value and get a better overall deal.
Look into different resources for estimating the value of your current vehicle. Many online databases can help you determine the worth of your car based on factors such as the model, manufacturer, and condition. It is essential to get your current car’s trade-in value before you go to the dealership, as this information will help set your expectations for what the car is worth and give you a reference point for any offers you will receive.
How does trading in a car work?
Typically, you would see a vehicle you want at a dealership, and the dealer would agree to buy your current car from you and apply that price as credit toward the purchase of the new vehicle. ‘Trading’ is not as simple as swapping keys—it usually requires additional money or a loan to get a new car.
How do I know how much my vehicle is worth?
You can get valuations from a few car dealerships to get an estimation of what your car is currently worth and what the market value is of the vehicle you intend to buy.
How much will a car dealer give me for my car?
It will all depend on your car’s condition and what kind of stock they are after. If you kept your vehicle clean and well looked after and were not in any significant accidents, you will get better offers. However, there is a risk that a dealer might offer you a fantastic price on your old vehicle but simply ‘hide’ this cost as an increased price on your new car. You should always negotiate the price of your old vehicle separately from the new vehicle you are buying.
Considering all vehicle expenses
There are two types of costs that you need to consider when it comes to owning a car. First is the fixed costs (total purchase price, finance or interest charges, sales taxes, car insurance, license and registration fees, depreciation). The second expense is operating costs (fuel and vehicle maintenance/repair costs, parking fees). In addition to the price of purchasing the car, be sure to consider the costs of operating it as well. Fuel, insurance, maintenance, repair, property taxes, and registration may all be affected by the car’s attributes, so you should consider operating costs when deciding which vehicle to purchase.
Routine repairs and maintenance can be more expensive for some cars. A more fuel-efficient vehicle can significantly lower your fuel costs. More valuable vehicles will cost more to insure and will mean higher property (or excise) taxes. Moreover, the prices of fuel, insurance, maintenance, registration, and perhaps property tax on the vehicle will all be ongoing expenses—you want to buy a car you can afford to drive. Be sure to consider these expenses as you narrow down makes and models.
While there are even more costs associated with buying a car, these factors are a great place to start as you begin your vehicle buying journey. Arming yourself with the needed knowledge of the car buying process and pricing will help you get the most value for your trade-in.
Time for a new car? CRS Automotive Hamilton can offer you the best value for your trade-in, so you leave satisfied with your new, used car. For more information, contact us today.