When you go to the dealership to start pricing new cars, they will usually ask you if you’re wanting to trade-in. If your answer is yes, you should be very careful how you proceed. There are plenty of ways the dealership can scam you based on your trade-in vehicle. One of the easiest ways for an auto dealership to make money is by low-balling trade-in vehicles because consumers are typically ignorant of what their cars are worth. They assume that the offered price is accurate and accept it without investigating the situation further.
The best advice for customers wanting to trade in their vehicles, says Edmunds.com, is to find out the value before you take it into the auto dealership. You can expect to get less for a trade-in than for a private party sale, but you shouldn’t get ripped off, especially since you’re giving the dealership your business. A friend of mine once traded in his Ford Explorer and was offered $4,000 for the exchange. When he went back to the dealership to pick up his new car, he found the Explorer in the Used Car lot with a sticker price of $13,000. A mark-up is expected, but a $9,000 difference is completely unreasonable.
So how do you find out the value of your car before you attempt an auto dealership trade-in? The Kelley Blue Book (KBB.com) is the best place to start. Although you can’t get a personalized appraisal of your vehicle, the website will get you to the closest possible estimate. Not only are the prices based on the make and model of your vehicle, but you can also choose between trade-in value and private seller value. From there, you can take a short “quiz” to determine the approximate condition of your car (Excellent, Good, Fair, Poor).
If the Kelley Blue Book value doesn’t satisfy you, there is always a third-party dealer. CarMax, for example, will appraise your car in about thirty minutes and give you an offer that’s good for seven days or 300 miles. While you aren’t under any obligation to sell them your car, you can compare the price they offer with the trade-in value assessed by an auto dealership. If the prices are significantly different, you know that you’re getting ripped off.
It’s important to remember that auto dealerships will try to pass a trade-in off as a convenience to you. There’s no rule that says you have to sell them your car, however, and you might be better off getting cash for it elsewhere, then putting the money toward a new vehicle.
If, however, you decide that you’d rather take the trade-in from an auto dealership, negotiate that price before you start looking at new cars. This way, they aren’t making mental comparisons and trying to figure out how much money they’re going to make. Plus, you haven’t had time to get your heart set on something in their inventory and you won’t feel pressured to take the deal. If you don’t think their offer is appropriate for your vehicle, tell them that you’ll have to take your business elsewhere.
