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How to trade in your car: 5 simple steps to take Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make smarter financial decisions by providing you with interactive tools and financial calculators as well as publishing independent and objective content. We also allow you to conduct your own research and compare information for free to help you make financial decisions with confidence. Bankrate has agreements with issuers, including but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this site are from companies who pay us. This compensation could affect how and where products are displayed on this site, including for instance, the sequence in which they appear within the listing categories in the event that they are not permitted by law. Our mortgage, home equity and other products for home loans. However, this compensation will affect the content we publish or the reviews appear on this website. We do not include the entire universe of businesses or financial offers that may be available to you.


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6 min read Read Published 11 October 2022

Written by David McMillin by a contributing writer

David McMillin is a contributing writer for Bankrate and covers topics like credit cards, mortgages tax, banking, and travel. David’s aim is to help readers discover ways to save more and stress less.

The edit was done by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping readers gain the confidence to control their finances through providing concise, well-researched and well-structured facts that break down otherwise complicated topics into bite-sized pieces.

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The trade-in of your car takes away much of the work of selling a car. The most significant benefit of trading in a car, however, is the possibility to transfer the value of your trade-in of the vehicle you have traded in directly to a new purchase. This is especially advantageous when you’re . These steps will help you get the most value from the vehicle exchange. Five steps to sell your vehicle. Doing your homework and understanding how to navigate the process of trade-in will help you maximize the amount your trade-in earns. 1. Find out how much your car is worth. first step to trading in your car is to know what exactly . Knowing this figure yourself will help you to feel more confident when it’s time to negotiate, and will improve your likelihood of getting the best deal. Instead of being patiently waiting to learn what the dealer’s thoughts are, do some research to determine your current car’s value. Online appraisal tools that are free like Kelley Blue Book or Edmunds and can help you assess the value of your vehicle. If they are available, you can use estimator tools that can offer a deeper sense of the dollars your car will command based on car attributes that go beyond model, make year, mileage, and make. Value can also be affected by external factors. If gas prices are at a high level, like they are right now and they are, a car with more gas mileage could be more sought-after than a large truck. 2. Check out your finances . Trading in a car involves more than assessing the vehicle. You’ll also need to evaluate your financial situation in the event of the deal. If you’re in the market, consider the value of your trade-in will be enough to cover the remaining portion of your loan. You can do this by calling your lender to determine the amount to pay off the loan and then comparing it to the value of your car’s trade-in. Visit multiple dealers to request quotes for trade-ins and get a firm idea of how many dealers are willing to give. Be aware that if a dealer offers to pay your loan off for you, you will likely apply the payoff amount to the new loan for the next car you purchase. 3. Ask for offers from multiple dealers You don’t have to go to the dealer to start the trade-in process. You can instead make dealers come to you with the price. Numerous value estimators on the internet like Kelley Blue Book and TrueCar have connections to dealers who extend deals based on the details you provide about your vehicle. It also may be smart to start with the place you purchased your car. “If the customer is able to visit the same dealership where they bought the vehicle, he or could be able to negotiate a better deal since they have a connection and history with that company,” says Meghan Davlin, director of member engagement and communications for the Illinois Fuel and Retail Association. 4. Get your car clean cleaner vehicle is more likely to be sold. Make the effort to clean both the outside and inside of the vehicle so that you are showing it in its best condition to make it easier for buyers “Make sure your car is in good condition and that you present it as you would want to be receiving it if you were buying the vehicle,” says Alain Nana-Sinkam, senior vice president of development for businesses at TrueCar. “Also If there were minor flaws that you planned to fix prior to the transaction, ensure that you complete them so that your car arrives at the dealer exactly as you reported and as they are anticipating it to be.” A well-maintained vehicle is likely to fetch a more favorable value. Make sure you don’t spend more money to repair the vehicle than you expect to sell it for. It is important to keep any service documents in your possession. This is also a good time to check for any recall notifications for your vehicle. If you find any defective components that triggered recalls, it could lead to an increase in safety risks. The majority of recalls result in repairs or the replacement of a car part for no cost to the buyer. 5. Schedule an appointment with a dealer . Car dealerships are often busy. Set up an appointment ahead of time to cut down on time. The appraiser will inspect your car to verify all information that you provided online is accurate. “Ask whether you’re able to be with the appraiser to be able to ask them questions on the process they use to determine what value they will assign to your vehicle,” says Joe McCloskey who is the vice president at McCloskey Motors located in Colorado Springs, Colorado. “Most dealerships will share the information they have with you and knowing this information can help you to better understand the process by which the dealer is valuing your vehicle’s value.” Be sure to bring your vehicle’s registration, the title and all sets of keys. If you do not have the title due to you’re trading in a car that is still under loan be sure to have the lender’s details ready to hand over. Remember, you don’t need to agree with the initial amount of trade-in the dealer suggests. You may negotiate your vehicle’s trade-in price. Dealers generally start by offering the lowest price that they can. Tell the dealer the price appears too low, according to offers from other dealers or the value you’ve uncovered through your investigation. Negotiating the trade-in price separate in relation to the cost for the next vehicle will help ensure that you receive the most value for your trade-in. What is the right time to sell your car . The primary factor being able to determine if it’s an appropriate time to sell your car is your vehicle’s equity. The equity of your car represents the gap between what you owe on the car and the current value of the vehicle. It is best not to trade with your car while you’re in the process in the same situation as having . It means you have to pay more on the car loan than the car is currently worth. This is a challenging circumstance to find yourself in since you’ll have to pay for the remaining loan balance after trading with your car. If possible, wait and continue making payments until you’re not under water. If you have to trade in your vehicle with negative equity, think about buying an affordable vehicle to minimize the losses. Having positive equity, on the other hand is a great position to be in because it lets you take the additional value from your car and put it to finance the purchase of the new vehicle. The pros and cons of trading a vehicle in Before you trade your car in, make sure that you know the advantages and disadvantages of selling the vehicle yourself. The advantages of trading in a car The main benefit to trading your car in is that it can save you from the hassle and stress of selling it by yourself. requires identifying the right price, putting the vehicle up for sale in a place where buyers can see it and dealing with prospective buyers. But when you sell it, the dealer does a lot of the heavy lifting for you. “In many states, there’s an advantage in taxation when buying and trading in through a dealer,” Nana-Sinkam states, “because in those states they charge taxes only on the difference between the trade-in price and the new vehicle price instead of imposing a tax on the entire purchase price of a brand new vehicle.” In addition the process of trading in your car can simplify the steps between selling your old vehicle and purchasing a brand new one. Rather than going to multiple places, you can take your old car to the dealership and use the trade-in value as an equity towards your new vehicle. The disadvantages of trading in a vehicle There’s one important disadvantage of trading in your car but you won’t earn as much than if you had the vehicle sold yourself. The car dealer wants to make a profit by reselling your used car to another motorist, so you’ll miss this extra sum of money. Trading your car in might also limit your options when it comes time to purchase your next vehicle. If you’re planning on using what you have earned from your current vehicle as the down payment on a new one then you might want to buy your new car by a dealer who is willing to buy your old one. The next step is trading in your old car instead than selling it on your own can streamline the process of getting into a new car. To maximize the money you make, begin by analyzing the worth of your vehicle using free online car estimators. Before heading to a dealer, make sure your car is cleaned both inside and out, and then do minor repairs that are cost-effective. It’s recommended to solicit offers from several dealers, and keep in mind that you have the option of negotiating the price of your trade-in.


Written by the writer who contributed to the article.

David McMillin is a contributing writer for Bankrate and covers topics like mortgages, credit cards and credit cards, banking, taxes and travel. David’s goal is to help readers discover ways to save money and also stress less.

The edit was done by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate since late 2021. They are passionate about helping readers gain confidence to control their finances through providing concise, well-researched, and clear data that chops complex topics into manageable bites.

Auto loans editor

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