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Advice and tips for trading in your car:
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Advantages:
There are some obvious advantages to trading in your car to an automotive dealership.
Trading your car in is quick and simple. A lot of people don't have the time or desire to sell their own car outright. First, you have to get the vehicle "lot ready" and this usually entails detailing, changing the oil, and doing a routine inspection of the car. Second, you have to list the vehicle, and put up with all the calls, people coming to see the vehicle, and those who want to do nothing more than test drive the car. Next, when the car finally does sell, you'll have to figure out all of the payment details, and then worry about making sure the car is no longer titled to you.
Trade-In tax advantage. In most states, you're only taxed on the remainder of balance, once your trade-in is deducted. e.g. Your trade is bringing $10K and the car you're buying is $20K, which means you're only taxed on the $10K difference.
The dealership isn't going to make demands. If your car ends up having problems, the dealership isn't going to want it fixed or demand their money back.
Disadvantage:
You'll lose money. If you don't mind putting up with the concerns above, you will make more money selling the car yourself. The dealership has to get the vehicle "lot ready," pay overhead, and then make gross (a profit) on your car. You can usually make about $2K-$5K more selling the vehicle yourself.
Dealership trade-in tricks:
Mental devaluation/Walk around. The salesman or manager will take you out to do a walk around on your car, and during the evaluation, they'll touch the blemishes on your car. You will do one of two things when this happens: You will mentally deduct money from what you think your car is worth or you will offer up more ammo that the dealership will use against you later in the negotiations.
Holding on the trade. The dealership is never going to show you full ACV (Actual Cash Value) during the first pencil (opening negotiation numbers.) The dealers usually come back $2K less than what they're really willing to pay for your car and this gives them room to move numbers around and/or hold more gross.
Holding your keys hostage. Not many dealers are going to throw your keys on the roof anymore, but most do leave them at the sales tower. This allows them to hold you at the dealership a few minutes longer if the deal turns sour. Also, they can tell you they're going to get your keys, when they're really getting the manager to take a take a turn on you.
Do's and Don'ts:
Do clean your car. No matter what anyone tells you, a clean car brings more money.
Don't lie about mileage or damage: These people do this for a living and you're not going to pass anything over on them. Anyway, you could be held legally liable if you would happen to get something by them.
Don't live and die by KBB (Kelly Blue Book) or NADA pricing guides. These guides are not always up to date with market factors that could alter the value of your car.
Do ask for an auction report: This will show you what cars like yours are bringing at auction, and it will give you a true idea on the value of your car.
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