How a Car Trade in Works How a Car Trade in Works

Knowing how to get the most out of your car trade in can save you hundreds, if not thousands, of dollars on the purchase of a newer vehicle. The fact of the matter is that most car dealerships will not thoroughly inspect your trade in. To them it’s a basic numbers game. Therefore, understanding how to use their game against them can work out in your favor.

The Value of Your Trade in to the Dealership

Although, most dealerships do not perform regular car inspections, they will, however, value your vehicle on several different factors. The most common are blue book value, mileage and overall appearance. The dealer will try to low-ball you at every chance they can get, even though you are purchasing a vehicle from them. The dealer wants to make a profit on every car on their lot, including your potential trade in. Therefore, before they determine the amount of your trade in, they will deduct the amount that it will cost to fix unexpected repairs, even if there are not any, the amount it will cost to get the car cleaned and the amount it will cost to perform routine maintenance.

Importance of the Blue Book Value

The Blue Book value is really important to the dealer, because it provides them with an estimate of the value of your potential trade in. Kelly Blue Book is the primary source used by many dealerships. Kelly Blue Book provides estimates based upon the condition of the vehicle, the age of the car and the mileage amount. Although, it is just an estimate, many dealerships uses this method as their starting point for determining how much your car is worth to them.

Importance of the Mileage

The mileage amount on your potential trade in is a big factor when it comes to a dealership. Again, the dealership is looking to make a profit. Cars that have a higher mileage, usually anything over the 12,000 to 15,000 a year mark, is not considered profitable to the dealership. In this case, the dealer will more than likely sell the vehicle to an auction. The auctioning company however, will not pay the dealer as well as a customer would have, thus providing the dealership with a loss.  

Importance of Appearance

The overall appearance of your potential trade in is very important to the dealership. As previously stated, the dealership usually will not perform a thorough inspection on your vehicle when you first enter the lot, because the salesperson is more focused on making a sale rather than talking about your trade-in amount. Therefore, a cleaner, polished and dent-free car will usually render a higher payout than a car that is dirty, full of trash and has several dents and dings. Dealerships use the appearance of a car to attract customers. If you ever noticed, there are not many damaged cars sitting on the dealership used lots. That is because potential buyers do not want to purchase an unattractive car, even if they are buying a used vehicle.

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