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How to trade in your car: 5 simple steps to take Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our mission is to help you make smarter financial decisions by offering interactive financial calculators and tools, publishing original and objective content. This allows users to conduct research and compare data for free to help you make informed financial decisions. Bankrate has agreements with issuers including, but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn money The products that appear on this site come from companies that compensate us. This compensation may impact how and when products are featured on the site, such as the sequence in which they be displayed within the listing categories, except where prohibited by law. Our mortgage, home equity and other products that lend money to homeowners. This compensation, however, does affect the information we provide, or the reviews appear on this website. We do not include the entire universe of businesses or financial deals that could be accessible to you.



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6 minutes read. Published October 11, 2022
Authored by David McMillin by a contributing writer

David McMillin is a contributing writer for Bankrate and covers topics like mortgages, credit cards, banking, taxes and travel. David's aim is to help readers discover ways to save money and worry less.








Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since the end of 2021. They are dedicated to helping readers gain the confidence to manage their finances through providing precise, well-studied data that breaks otherwise complicated topics into bite-sized pieces.









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The trade-in of your car takes away much of the work of selling your vehicle. The most significant benefit of trading in a vehicle, however, is that it allows you to apply the trade-in value of your old vehicle directly towards a new purchase. This is particularly beneficial if you're . These steps can help you maximize the value of a vehicle trade-in. Five steps to sell your vehicle. Doing your homework and knowing how to navigate the trade-in process can allow you to maximize the amount your trade-in is worth. 1. Find out how much you can get for your automobile.. The first step to trading in your car is to know what exactly . Knowing this figure yourself will help you to feel confident when it's time to negotiate, and will help increase the likelihood of getting the best price. Rather than being patiently waiting to learn what the dealer's thoughts are you should do some investigation to find out the value of your car. Free online appraisal tools such as Kelley Blue Book or Edmunds and can help you assess the worth of your car. If you have them, try using estimator tools that will give you a deeper sense of the amount your car can be worth based on the car's characteristics that are beyond the make, model and year, as well as mileage. The value of your car could also be affected by external factors. If the price of gas is excessive, as they are and they are, a car with more gas mileage could be more popular as opposed to a truck that is too big. 2. Check out your financial situation. Trading in a car involves more than assessing the vehicle. You'll also have to consider your financial situation to on the other side of the transaction. If you are , determine whether its trade-in value will be enough to cover the remaining part of the loan. You can do this by contact your lender to inquire about the amount of loan's repayment and then comparing the figure with your car's trade-in value. Contact several dealers to request trade-in estimates and gain an idea of how the dealers will be willing to give. Remember, if a dealer is willing to pay your loan off on your behalf, you will likely include the amount of the payment to the new loan for the next car you purchase. 3. Request offers from several dealers. You do not need to visit the dealer to begin the process of trading in. You can instead make dealers contact you for an offer. A lot of online value estimators, such as Kelley Blue Book and TrueCar are connected to dealers who extend deals based on information you provide about your vehicle. It also may be smart to start with the place you purchased the car. "If the buyer can go to the same dealer where they bought the car, he might be able get a better deal because they have a connection and history with the dealership," says Meghan Davlin, director of communications and member engagement at the Illinois Fuel and Retail Association. 4. Freshen up your car A better-looking car is more likely to be sold. Make the effort to clean the interior and exterior of your vehicle to ensure that you're showing your vehicle in the best condition to make it easier for buyers "Make sure that your vehicle is in good condition and that you present it in the same way you'd want to be receiving it if you were purchasing the vehicle," says Alain Nana-Sinkam, senior vice president for business development with TrueCar. "Also should you find small flaws you had planned to address prior to the transaction, ensure that you make them happen so that the vehicle is delivered to the dealer exactly as you reported and as they are anticipating it to be." If you maintain your vehicle well, the car will fetch a better value. Be sure to not pay more to repair the vehicle than you anticipate selling it for. Be sure to have any service records on hand. This is an excellent time to review any recall notifications for your vehicle. If there are any defective components that triggered recalls this could result in the risk of injury. Most recalls lead to the repairs or the replacement of a car part for no cost to the buyer. 5. Set up an appointment with a dealer Car dealerships are often busy. Schedule an appointment well in advance to avoid waiting. The appraiser will review the car to confirm that all information that you provided online is accurate. "Ask whether you're able to be with the appraiser to ask them questions on how they are determining the value of your car," says Joe McCloskey, director of McCloskey Motors which is located in Colorado Springs, Colorado. "Most dealerships will be able to share this information with you, and having this information will help you to better understand what the dealer is doing and how it determines the value of your car." Make sure you bring the registration of your vehicle along with the title and all keys. If you don't have the title because you're selling a vehicle which is still a loan be sure to have the lender's contact information available to be handed over. And remember, you don't have to accept the first trade-in price a dealer suggests. You may negotiate your vehicle's trade-in price. Dealers typically start by offering the lowest price possible. Tell the dealer the price is too low in comparison to other dealers or the value you've found in your investigation. Negotiating the trade-in price separate from the purchase price for your new car will also help ensure that you are getting the highest value you can for your trade-in. When to trade in your vehicle The most important factor in knowing if it is an appropriate time to trade in your vehicle is the car's equity. Your car's equity can be defined as the distinction between the amount you still owe on the car and the current value that it holds. It's best to avoid trading in your vehicle in the event that you're not having the same as having . It means you have to pay more on your vehicle loan than the vehicle worth today. This is an extremely difficult circumstance to find yourself in since you will still have to pay for the remaining loan balance after trading in your car. If you can, hold off and keep paying until you're not underwater. If you need to trade in your vehicle that has negative equity, you should consider purchasing a less-expensive vehicle to help reduce the loss. Positive equity on the other hand, is a good spot to be in as it lets you take the extra value of your vehicle and use it towards the purchase cost of the new car. Pros and cons of trading a vehicle before you trade your vehicle in, make sure you understand the benefits and disadvantages of selling the vehicle yourself. Benefits of trading in your car The main benefit to selling your car that it will free you from the hassle and stress of selling the vehicle by yourself. requires identifying the right price, placing the car for sale in a place where buyers can view it, and negotiating with potential buyers. But when you sell it to a dealer, they do a lot of the work for the buyer. "In most states, there's also an advantage in taxation when buying and trading in at a dealer" Nana-Sinkam states, "because in those states they charge taxes only for the amount that is the sum of the trade-in price and the price of the new vehicle instead of paying full tax on the entire cost of purchasing a new vehicle." Finally trade-in your car can simplify the steps between selling your old vehicle and purchasing a new one. Rather than going to multiple locations, you could simply bring your old car to the dealer and use the value of your trade-in as an equity towards your new vehicle. The disadvantages of trading in a car There is one major downside when trading in your car, but you won't get as much profit than if you sold the vehicle yourself. The car dealership wants to make money by selling your car to another motorist and you'll lose this extra sum of money. Trading your car in might be a disadvantage in the purchase of your next vehicle. If you're looking to use the value of your old vehicle to pay for the downpayment for a new car then you might want to purchase your new vehicle from a dealership willing to purchase the previous one. The next step is trading in your old car rather than selling it on your own can simplify the process of getting into a new vehicle. To maximize the money you earn, begin by researching the value of your vehicle using free online car estimators. Before heading to a dealer, make sure your car is cleaned inside and out and do minor repairs that are cost-effective. It's an excellent idea to obtain offers from multiple dealers, and keep in mind that you have the option of negotiating the trade-in price.


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Written by a contributing writer

David McMillin is a contributing writer for Bankrate and writes about topics such as mortgages, credit cards banks, taxation, and travel. David's goal is to help readers understand how to save money and also stress less.




Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since the end of 2021. They are committed to helping readers gain the confidence to manage their finances through providing concise, well-researched, and clear facts that break down complex subjects into digestible pieces.






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