How to get the best deal when trading in a car

Used car prices have largely tracked the rise in the rate of inflation for other commodities over the past 18 months, with the average price of used vehicles 40% higher than a year ago. year, according to Copilot, a vehicle buying platform that monitors automobile prices.

Although data from the auto industry indicates that used car prices may be stabilizing, car buyers still have a lot of leverage when negotiating the price of their trade-in vehicle.

If, that is, they understand how to negotiate against a tough and experienced adversary – a car dealership.

“Frequently, dealers may make a low offer in anticipation of a counteroffer,” said Tim Davidson, president of Car Title Loan Lenders in Fountain View, Calif. “However, never accept less for your trade than a trusted industry guide estimates its worth.”

It’s up to the buyer to make sure the dealer doesn’t raise the price of the new vehicle to compensate for accepting a decent trade-in value. “This is a common strategy employed by dealerships who monitor their own results,” Davidson noted.

How to negotiate your best auto trade-in price

To ensure you maximize the trade-in price for your vehicle, take these tips to the dealership before signing on the dotted line.

Know the value of your vehicle

Before heading to the dealership, go online and find out the typical trade-in price for your car.

“When it comes time to negotiate with the dealership, you’ll know whether their offer is reasonable or not,” said Adam Wood, co-founder of Revenue Geeks, a financial pricing platform for consumers. “There are various reputable websites where you can find this information. You can consult Edmunds, Kelley Blue Book and Canadian Black Book.

“Because every car is unique, the trade-in value suggested by these sources should only be used as a basic guideline,” Wood noted.

Bring the “receipts”

Another “must do” before entering the dealership – bring a counter offer.

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According to Samuel Lewis, founder of SJL Financial, in Wilmington, Delaware, never walk into the dealership without two key things – a trade-in/sale offer from We Buy Any Car and/or Carmax, and approved financing for the new car you buy.

“Wait for the dealer to give you the trade-in offer first, then show them your counter-offer,” Lewis said.

Sell ​​instead of trade

You might be tempted to trade in your old car for a new one, thinking it will be less of a hassle and even save you time.

“However, unless you’re dealing with a reputable dealer, you still risk seeing the value of your old car undervalued, resulting in a transaction that will cost you more than it should,” said Lanny Tuchmayer, Director of Operations at Loi Bergel, in Toronto, Canada. “Even newer dealerships can be a problem. They would “agree” on the value you want to trade in your old car for, but then add the difference while trying to sell you the new car.

If you are unaware of market costs, these costs could be in the form of exorbitant dealer fees, additional warranty or even a higher price for the new vehicle.

“If you can’t find a reliable local dealership, it’s a better idea to sell your old car first,” Tuchmayer said. “You’ll be able to get more value out of your car this way than you would with a trade-in.”

Roll it back

A big mistake car buyers make is to enter into negotiations for a new vehicle by telling the seller that a trade-in is part of the deal.

“The seller will then come up with an offer that pays a lot for the trade-in,” said Melanie Musson, automotive expert at AutoInsurance.org. “But the car dealership doesn’t tell you that they’re charging more for the car you’re interested in to make up for what they’re paying you for your old car.”

“First, negotiate a sale price for your new vehicle, then discuss the trade-in option and what they would give you for your old car,” Musson advised.

The sale of your car depends on you

The good news? People who are looking to trade in their old car for a new one have more bargaining power than ever before.

“It doesn’t mean they can just throw in a number and expect to get it for their craft,” Musson said. “It’s up to the consumer to do their research to find out what their car is worth as a trade-in vehicle and defend that.”

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