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CarBuyingHelpOnline.com |
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Your Trade In
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Get the most for your Trade In. There are 2 types of trade ins. The first is one with a free and clear title. The second is one with a lien on it. Your approach to each of these 2 is very different. When a car dealer is packaging your deal, the trade in is one major piece to the puzzle. Do not overlook your trade because the dealer will try to steal it from you and offer you a great deal on everything else knowing he will make it back when he resells your car. Know what your trade in is worth. This is the most important thing you must know. If you have no idea what it is worth be prepared to be taken for thousands of dollars. If you have equity in your trade in, it will be lost and it will hurt your down payment. Most wholesale managers at the dealership will try to low ball your trade in by as much as 90% of the car's actual value. The best place to start is to get a trade in value from Kelly Blue Book, Edmunds, and NADA. Run all three because the numbers will vary. Remember, you are looking for the trade in value not the retail value. You will never get retail value at the dealership, because they want to resell your car and make a profit. If a Dealer is offering you retail value then somewhere in your deal they are making up for it. Do not start pumping a lot of money into your trade in to try and get the price up. Just make sure it is clean, the tires match and are not worn and you are aware of any minor problems it may have. Tell the dealer nothing about the condition of your trade because they will use it against you when they low ball the price. If the price comes in low ask them to justify the price and don't be intimidated by their negative responses. If you are sure they are screwing you, go to several dealers and get a mix of trade in values. Again, beware of dealers offering retail pricing because they plan to nail you somewhere else. Get the trade in value in writing to avoid them coming back at you with a different offer if the rest of the deal is not working in their favor. If you are looking to get retail value for your trade in then you may want just sell it yourself privately. Trade in Allowance vs ACV (actual cash value) The trade in allowance is what the dealer puts on the contract for the bank. The ACV is what the wholesale manager has wriiten down as the real value for the car. They will not show you the ACV and it does not show up on your contract. If the dealer is giving you a trade in allowance of $7,000 on your trade in and the ACV is $4,000, the dealer must make up the $3,000 somewhere in the deal. It is easier for a dealer to make it up when selling you a used car because you do not know the actual profit in the car they are selling you. It is harder for a dealer to mark up the trade in allowance when selling a new car because smart shoppers know the invoice price and already have their financing lined up thus, making it harder for them to recoup the $3,000 difference. Some upfront dealers will honestly show you the true ACV and discount the selling price of the used car they are selling you and still make the same profit without all the games. Trade In Allowance works great on buyers that are absolutely stuck on a trade in price and won't budge. If you still owe money on your car. This is where it gets tricky. First of all if you are up side down in your car, we advise you to keep your car until it has some equity or the balance will go on the car you buy and you will be further up side down in your new car. It is a cycle you may never get out of. If you owe money but have equity this should be applied as part of your down payment on the car you are buying. If you have equity, you must work hard to get it! Don't let the dealer tell you we will just pay off your loan because you may leave thousands of dollars on the table.
If you are upside in your current car. If you are upside-down in your car meaning you owe more on it than it is worth, be careful. The options are simple; try to sell it yourself and avoid the wholesale price at the dealer. To do this you must have cash available to pay off the lien. Or you can put a larger down payment on your new car to offset the imbalance. Another way is to look for large cash rebates that can offset the purchase price of your new car. If none of the above will work you should consider keeping the car longer until the negative balance disappears. If you allow the dealer to pay off your loan and put the negative equity on the selling price of your new car you will be even further upside down on your new car and the next time you buy it will be worse. Whenever a dealer advertises that he will pay off your loan no matter what you owe, he will but you will pay the difference. Don't be fooled into thinking he is doing you a big favor. Sell your car on your own. This is an option that in most cases will get you more for your car. But how much more? If the dealer is really low balling you and you know you can get thousands more it is a good option. Be prepared for advertising your car, numerous phone calls from potential buyers, people coming to your house when it is inconvenient for you. We are not trying to talk you out of it but it is not easy to sell your own car and you should be prepared. If your value and the dealers trade in value is close sometimes it is better to eat a little money and focus on getting it back on the rest off the deal you are negotiating. Sell your Car Online
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