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Getting a new car is exciting, but the process usually begins with determining what you'll do with your old one. Knowing how to trade in your car to get the most money is crucial, and it can be difficult for first-timers. This guide will walk you through the process step-by-step so you can get the best deal and save the most money on your new car. There are several options available to you when it comes to selling your vehicle.
How to Sell Car the Traditional Way?
Placing an ad in the local newspaper, contacting local car dealers, telling friends and family members and asking them to spread the word, placing a ‘For Sale sign with your contact information on the back windshield of your car, posting leaflets on the notice board of your housing complex, office, clubs, and so on – these are all conventional or offline ways of selling your car.
How to Sell Car the Modern Way?
Some of the new ways to sell a car include placing an advertisement on online classified portals, taking advantage of the trade-in and trading deals, using the power of social media, and using car buying services.
What is the process of trading a car?
Dealerships are still on the lookout for good used cars that they can buy and resell as used cars or registered pre-owned vehicles to other buyers. Depending on the circumstances, this might be a perfect way to save money on a new vehicle. If you own your car or still owe money on a loan determines how to sell it and take advantage of this opportunity.
You can easily trade in your car if you own it outright. In general, dealerships will want to pay the least amount possible for the car to protect potential income. While this method may net you less cash than selling the vehicle privately, it can be a more streamlined, less-headache process.
The method of trading in a car is a bit more complicated for people who already owe money on their car loans. If the value of your car exceeds what you owe on it, you will trade it in and keep the difference. If you owe $1,000 on your car and the trade-in value is $2,000, $1,000 will be used to pay off the debt, and the remaining $1,000 will be yours to hold or put toward a new car purchase.
If your car is worth less than what you owe, you'll have to pay out of pocket, which would boost the cost of a new car. You can also trade in your car if it's worth $1,500 but you owe $3,000 on the loan; however, you'll have to pay the $1,500 difference out of pocket.
Regardless of which of these situations you are in, the steps on how to trade in the car are the same.
Find out your car’s trade-in value.
Finding out how much your car is worth is the first step in the process of trading it in. You can estimate the value of your used car using online resources like Kelley Blue Book or similar sites. You can also look up classified car advertisements to see how much your car is selling in comparison to other vehicles.
However, there are two things to keep in mind here. To begin with, the price a dealership or a private seller lists a car for would be greater than the value you get from a trade-in. When you trade vs. sell, you sacrifice some of the value in exchange for convenience. Second, most people's automobiles are not as good as they believe. Yes, it's probably a lovely car that you've taken good care of, but the dealership will nit-pick every scrape, dent, and a sign of wear-and-tear as much as possible.
Determine an ideal price
Gather the information from step one and decide what you believe is a reasonable price. You should decide on an optimal price as well as a floor price for your trade-in, which is the lowest price you are willing to accept. At most dealerships, you can expect to be given far less than you believe is fair. You can still bargain, but the dealer, as the buyer, has the upper hand.
Begin visiting and speaking with dealerships to determine what they can give you for a trade-in. It's important to remember that you don't have to trade in your old car at the same time as you buy a new one. In some situations, taking the time to shop around for various choices will save you a few hundred dollars or even a few thousand dollars.
Related: Save Money on Auto Insurance
Choose an offer
After you've gathered all of your options, decide which one is right for you. In most situations, the dealer who can give you the most money for your trade-in would be your best option. If you're trading in your vehicle at the same dealership where you're buying, make sure you're not being ripped off by getting more for your trade-in and paying more for the car. Many experienced car buyers advise waiting until you've agreed on a purchase price for the vehicle you want to buy before mentioning your trade-in.
Close the deal
The final move in the procedure is to close the contract. Before handing over your vehicle, make sure to read all of the paperwork. Also, make sure you time it right so you don't end up with a difference between your old car and your new car, leaving you stranded.
Paying the remaining amount with an auto loan
Most people's trade-in value is insufficient to offset the expense of the new vehicle they choose to buy. An auto loan is the most common way to fund the remaining cost of the purchase. The best auto loans will provide you with the funds you need at a reasonable cost. Keep in mind that your car will be used as collateral for an auto loan, which ensures that if you default, you will lose your vehicle. One advantage of using collateral is that people with poor credit may have a better chance of getting approved.