If you are thinking about trading in your old car you might want to do some research before you go to the car dealer ask what’s my trade in worth. There are a few places to go online and do that research for free. One of the best is Edmunds.com, they keep up very closely with the car market and can provide you with a good idea of your trade in worth while avoiding any car dealer scams.
How to Determine Your Trade-In Worth
When you go to Edmunds.com (Click Here NOW! this link will open in a new window for your convenience) you will see a link to appraise your trade in car. Click on that link and go ahead and select all the options that pertain to your car. Make sure you select all the factory installed options, do not select anything that was added on later by you, because a dealer will not take anything into consideration that was not factory installed. Then go ahead and choose the condition of your trade in, be honest with yourself when it comes to condition. What you overlook, the car dealer won’t, so read the descriptions and be accurate if you want a true idea of your trade in worth. Now go ahead and click on your Pricing Report.
The next screen you will see is you trade in worth displayed over 3 columns. These 3 columns will show you Retail Price, Private Party price and Trade In worth to a dealer. These numbers in your pricing report are a very good guide to the worth of your trade in. Notice that I said guide, there is nothing cast in stone here. The dealer decides the ultimate price, but if o=you have pricing report it will aid greatly in any negotiations of your trade in worth.
Know You Trade-In Worth Before You Go to the Car Dealer
When you go to the car dealer they will approach the your trade in worth a little differently. They usually use an auction guide to see what similar cars to yours have sold for at auction. In addition to that guide they will closely look over you trade in and look for any issues they can use to get you to accept a lower amount than you feel your trade is worth. They also look for scratches, dents, bodywork and tire wear to try to devalue your trade in. The dealer will also make a quick mental estimate of how much they will have to spend to bring your trade in up par to sell on their lot.
Now the car dealer has a good idea what your trade in worth really is, They will present you with a number that is 18-35% less than the actual worth of your trade in. Some people will accept this first number that the dealer presents to them when they are shown all the minor imperfections that their trade in has. That is exactly what the dealer wants to happen, for you to accept less for your car than the true trade in worth.
Your Trade-In Worth is Less to the Car Dealer
The objective of the car dealer is to get you to agree on a worth for your trade-in that is lower than the actual worth.
When the car dealer takes your trade in on a purchase they use the agreed dollar figure on the paperwork that you can see, and then they book the true trade in worth. An Example: If we agreed on your trade in worth at $10,000.00 and the actual trade in worth was $11,800 , I would book your trade for $11,800. So if the profit on the vehicle purchased was $1,000 there is an additional profit of $1,800 on your trade-in. Now the transaction nets a $2,800 profit. Your salesman’s commission is based on the $2,800 profit. Now you can see why the sales person wants to get you to accept a lower trade in worth. They can substantially raise their commission. Many customers accept less as their trade in worth if they believe they got a good deal on the new car.
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