If you are thinking of replacing your current car, you might consider trading it in. Some dealers offer such services and there are a few advantages to trading in a vehicle. The process is also fast and it does not involve a lot of waiting or paperwork. Still, there are a few things that you should be aware of.
The idea of trading in a vehicle means that you offer the dealer your car and then the dealer offers a discount on your new car that you purchase from them. The discount is equal to the amount your car is appraised for. This type of deal is appealing because it saves a lot of time. It can take days if not weeks to find a buyer and you have to deal with the entire selling process. If you are trading in your car, you do not have to bother with selling the car at all.
2. You only have to talk with the dealer
The dealer is the one that will be offering you a new car and will take in your car. You just have to deal with the dealer and it can all be done in just a couple of days. Again, this saves you some time and for many people, time is the one resource they do not have enough to spare.
3. You can get less for your car
Trading in a vehicle may not get you the same dollar value as you would get if you would sell it on your own. Dealers offer you a cash discount on your new car based on their valuation of your old car. Usually, their valuation is a bit lower than the market value. Looking back, what you get in return for accepting a lower amount for your car is saving time. It is up to each individual to decide how much their own time is worth and if the dealership offer is worth considering. Keep in mind that you can try to negotiate. Never accept the first deal you are offered. Try to get a discount on the new car or a better valuation for your old car.
4. It limits your options
If you do decide to trade in your car you have to buy your next car from that dealer. If you sign an agreement with the dealer, you cannot buy a different car from a different dealer. Before signing anything or even mentioning that you want to trade-in your car, check if the dealer has a car that you want.
5. Get the most you can for your car
You really need to know the value of your car. If it has some dents or mechanical problems, the dealer will value your car for much less. For example, if your car has a transmission problem that costs $300 to fix, the dealer will depreciate your car by more than what it would cost to fix. A good practice when trading in a vehicle is to clean it up and ensure that it is in great condition.