How Does Trading in a Car Work?
You're ready to get rid of your current car and want to get into something new. For many car owners, there's nothing easier than trading in a car to a local dealer. That way, you avoid the time and effort it takes to list and sell your car online; plus, dealers today are working to make the process fast, easy and transparent.
Before you pull into a dealer's lot, prep your car, make sure it's clean and be sure you've done your research on how much it's worth. If you need to grab a used-car value, Cars.com provides Black Book values, which are calculated by examining prices dealers are paying at auction for similar vehicles. You should also make sure you have all the necessary documents (especially the car's title, if you have it) and valuable accessories, such as extra key fobs.
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When you arrive at the dealership, inform the salesperson who greets you that you're there to trade-in your car. That person will likely take down some of your information, then either the salesperson or a used-car manager will perform a visual inspection of your car, take down the vehicle identification number and run the number through a vehicle history database to check its records.
While this happens, the service department may also take a look at the vehicle to check the condition of the tires, brakes, fluids, and other mechanical parts. A dealership employee may even take the car for a quick spin to see how it runs. After that, it's time to get your offer.
The offer you receive will depend on several factors, but mostly it will rely on the price being sought for similar vehicles at auction. Other possible factors include whether or not the dealer has similar cars on the lot already, the condition of your vehicle and whether the dealership needs to make any repairs to make the car ready for sale.
Many dealers today focus on transparency. The internet has changed the car-shopping process, including trade-ins. If you have questions about your offer, ask the salesperson; you can even ask to see the auction prices or other used-car estimates they might be using to build their offer.
When you're trading in a car, there may be a little more wiggle room on your trade-in value against the price of the car you're hoping to buy. Remember, though, that you're under no obligation to trade it in if you don't like the offer you've been given. You should understand that all dealers in an area are often facing the same market forces, so don't expect wildly different offers. And remember that you can always try to negotiate a bit, as well.
After you agree to a deal for both your trade-in and the new car, the paperwork will start. If you have the title for your current car on hand, you could be done that very day. If you still owe money on your current vehicle, the dealership will have to wait to get the title from your lender before concluding the process. And if you owe more on your current car than you're offered for it, you'll either have to pay the dealer the difference or roll it into the loan for your new car.
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