How Does a Car Trade-In Work?

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A trade-in allows you to sell your current vehicle and buy a car from your local dealer. The trade-in value is subtracted from the price of your next purchase, so you borrow less with car financing. The process also avoids creating classified ads and waiting for a potential buyer.

The dealer is your only point of contact. Trading in a car usually takes a day or two, during which the vehicle is appraised and an offer is made to the vehicle owner. It saves a lot of time but there are steps to take beforehand and when youโ€™re at the dealership.

First: Prepare Your Car to Be Sold

As with all dealership transactions, the more you know the better.ย  Before you speak to the salesperson, treat it as if you are going car shopping and:

  • Research the Carโ€™s Value: This gives you negotiating power when you visit the dealer, so you get the fairest trade-in price. Kelley Blue Book is a good place to start. Youโ€™ll get an estimate by entering the vehicleโ€™s make, model, and mileage.
  • Prepare Your Vehicle: Clean out the trunk, glove box, and any other place you store things. If there are dents and scratches, visit a body shop so your car looks like new. Complete any necessary repairs and have the tires, brakes, and fluids
  • Calculate What You Still Owe: If you owe more than your car is worth, it doesnโ€™t mean you canโ€™t trade it in. However, the outstanding balance will be rolled into the new loan and possibly increase your monthly payment.

Gather the Paperwork

Dealerships take care of most of the paperwork. If you have the car title, make sure you have it; this will save a great deal of time. Car dealers are familiar with the documents needed to register vehicles and file them with the local DMV.

At the BHPH Dealership

At a Buy Here Pay Here (BHPH) dealership, the salesperson will have someone from the service department look over your car, test drive it, and even run it through a vehicle history database. Then they will prepare an offer based on the insights of a skilled appraiser, but will also consider the used car value it can profit from during an auction.

Before settling on an offer, get several estimates. Visiting a few dealers can give you the opportunity to settle on the best price. Focus on dealers that sell your make and model. If your car is well-kept and the mileage isnโ€™t too high, a used car dealer may be interested in it.

If the appraiser suspects a mechanical problem you didnโ€™t notice, bring it to a professional mechanic. The vehicleโ€™s condition is an important factor in determining an offer or accepting your trade-in. If you receive a lowball offer and everything seems fine, you can refuse it or try to negotiate. But if you accept, the paperwork will start, and you can choose and pay for your new car or set up a new loan. Always remember to check for errors or emissions on documents, as well as add-ons or fees you didnโ€™t know about.

Buy a Used Car in Hawthorne

At CarWorld, you can trade-in your vehicle and find the best used car for the money. Choose from our extensive pre-owned inventory and get approved when other dealerships have turned you down. We are open during the COVID-19 crisis; our team is following the latest guidelines to keep our customers and employees safe. To speak with our used car manager, call 833-219-9951 for friendly service and answers to your questions.

Author: CarWorld