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Trade In a Car and Use It to Your Advantage
Trading in your car can help you to buy a new car without having to put a large amount of money down. However, you need to keep in mind that dealerships will want to sell you a new car for as much as they can, while paying you as little as possible on your trade-in.
Today, we’re going to cover how you can use your trade-in to your advantage. We’ll discuss the best ways to boost your car’s trade-in value and give you tips on how you should negotiate while you’re at the dealership.
How to Trade-In a Car for Maximum Value
You’ve decided to trade in your car. What should you do next? Learning how to trade in a car is vital to getting the most bang for your buck. Here are your next steps.
Research Your Car’s Value
Understanding how much a dealership should be offering is essential to successfully negotiating your trade-in value. You can use CarEdge Pro to gain an understanding of what similar cars are going for. It’s smart to bring printouts of your car’s fair value with you to the dealership to show that you’ve done your research.
Fix Cosmetic Issues
There’s no need to give the car a new paint job, but fixing any cosmetic issues will go far in getting the most for your trade-in. It’s also worth cleaning the interior and exterior before you take the car to a dealership. Break out the shampoo for the carpets, go through a car wash, and fix any dents. You might be surprised how big of a deal this can be.
Shop at Multiple Dealerships
There are plenty of reasons to shop around at different dealerships. Every dealership will offer you a different amount for your car, and some will be more open to negotiating than others.
Make sure to obtain quotes from these dealerships for your trade-in and take them with you to the next dealership. Don’t lose them! These quotes — along with your used car values from CarEdge — will help you when it’s time to negotiate.
Once you have a firm understanding of your car’s value, have fixed any minor issues, and you’re prepared to shop around at multiple dealerships, it’s time to negotiate.
How to Negotiate Your Car’s Trade-In Value
Avoid the temptation of negotiating your car trade-in value when you’re negotiating the price of a new car. You should negotiate both numbers separately. When you mix the negotiations, there’s too much potential for the salesperson to tweak the numbers so that it seems like you’re getting a better deal than you really are.
Your first order of business is to negotiate the price that you’ll pay for your new car. Once that is nailed down, then you can start talking about how much you’ll receive for your trade-in.
Use quotes from other dealerships and the Kelley Blue Book estimate to illustrate that you know what a fair offer looks like. Since many car dealerships will directly resell your trade-in on their used car lot, there’s an incentive for them to be competitive.
Stay firm in what you’ll accept. If they won’t give you a good price, then it’s time to leave that dealership. It’s worth taking your time to trade in a car the right way.
How to Trade-In a Car: Keep Timing in Mind
Timing matters when it comes to trading in your car. Being patient can often pay off. Factors such as weather, the type of car that you have, and other socioeconomic factors can come into play with the trade-in value that you receive.
For example, trading in an SUV that is in great condition right before winter can often result in a better trade-in value, as winter weather tends to drum up extra business from people that are looking for something that can handle snowy conditions. Think about the time of the year as it relates to what you’re offering.
Other factors can impact the sales process, too. It’s always better to try to buy a car at the end of the month or at the end of the year. That’s when car dealerships are trying to boost their numbers at the end of their sale periods. You’re likely to get a great price on your new car and a high trade-in value at these times.
How to Trade-In a Car: Stay Informed and Stay Firm
Do your research to make sure that you know what your car is worth when you want to trade in a car. Stay firm on the amount that you’ll accept for your trade-in. Be aware that some dealerships may try to manipulate the numbers. Sometimes, what looks like a good deal on your trade-in is made up for with a bad deal in another area.
Remember, you can always say “no” and walk out of the dealership. It’s your car and you deserve to get a great deal.
What Are Car Brokers and Should I Use One?
Most people don’t look forward to buying a car. While the act of owning a new car is enjoyable enough that some people can power through it, it’s just not worth it to everyone. That’s where car brokers come in.
Car brokers can help you to navigate the automotive world on a personal level to help you buy your dream car. They can even help you to find a rare or specific vehicle.
Today, we’re going to examine what a car broker is, when you should use one, and how you can find a quality one.
What is a Car Broker?
What is a car broker? A car broker, also known as a car buying service, is basically a professional car buyer. The goal of a car broker is to level the playing field between you and the car dealership.
An auto broker is familiar with car dealership’s sales tactics, strategies for negotiating, and profit margins. They know how and where to save money throughout the entire process. They won’t fall for some of the numbers manipulations or specific strategies that might work on other customers. Instead, they’ll see these tactics coming and have a rebuttal already prepared.
Some auto brokers work for themselves or a small company, while others are part of a concierge service at a bank or credit union. An auto broker will often work for dealers and customers, helping to connect the two.
There are two ways that car brokers make their money: As a flat rate or as a percentage. An auto broker might charge everyone a flat rate, ranging from $200-$1,000. Other brokers opt to charge a percentage of the money that they saved you on your purchase. Expect to pay a retainer of approximately $100 once you decide to use an auto broker.
Car brokers can help to negotiate deals for new and used cars with dealerships.
Reasons to Use a Car Buying Service
Now that we’ve answered the question “what is a car broker,” we need to discuss the reasons that you should use one. People typically decide to use a car buying service to save time and money. Car brokers know exactly how to navigate the sales process to find any opportunities to save you money. You also won’t have to waste your time negotiating and spending hours at a dealership.
Other car buying services might be used when you’re looking for a rare or vintage car. Specialists hunt down these cars and buy them for their clients. This is a much more high-end service than the kind offered by the average car broker.
Using a car broker is similar to using a real estate agent. They help you to minimize mistakes and maximize your savings. For those looking to skip the whole car buying process altogether, this is a great way to go.
How Do You Find a Car Buying Service?
There are several things that you need to do when you want to hire a car buying service. You should begin by asking about options available through your favorite warehouse club store or the credit union that you bank with. Many types of brokers that offer car buying services may even have their fees included with your memberships.
If you don’t have a free option, it’s time to head online and look for a well-reviewed auto broker. Some attributes to look for are:
- A flat fee that varies based on the quality of the car being purchased
- A fee structure based on a percentage of savings under MSRP
- Not taking any form of payment or kickback from dealerships
- Offering services like trade-in brokering or delivery to your home
You will need to make sure that the auto broker is licensed to sell cars in your state and that they are able to abide by any other regulations that may apply to your specific transaction. Research any potential auto brokers on review-based sites to see how other customers have felt about working with them.
Want to get a better deal by yourself? Join CarEdge to get access to a suite of tools and information to help you get the best deal buying a car.
Auto Brokers Might Be Worth Your Time
Deciding to work with an auto broker might well be worth your time. If you don’t care to learn the ins and outs of car buying in order to score a great deal, auto brokers are an excellent alternative. Keep in mind the requirements that we’ve outlined above and do plenty of research before deciding which one to work with.
Of course, if you want to learn how to negotiate and handle the work yourself, we’ve got a deal school that’s designed just for you.
Guide to Buying, Selling, and Trading EVs
If you’re looking for a new car, you might be tempted to investigate a new or used electric vehicle (EV). An EV is powered entirely by electricity that charges your battery at charging stations. There are a number of unique factors that must be considered as a result, such as the lifespan of the battery and the location of charging stations.
There are many aspects to consider when you’re looking into buying, selling, and trading EVs. Today, we’ll take a look at everything that you’ll encounter as you start shopping around for electric vehicles.
Is Owning an Electric Car the Right Decision?
Buying an electric car might be the right purchase for you, but it’s also not for everyone. Instead of simply heading off to the nearest Tesla dealership to check out the latest models, it’s important to take some time to consider a few unique factors that will bring entirely new variables to the car buying equation.
Just like buying a traditional car, buying an EV requires plenty of time and research before you head to the dealership. In this electric car buying guide, we’re going to go over some of the prime factors that you need to consider before you buy this type of car. We’ll cover home charging, the importance of range, and whether an electric vehicle really saves you that much money.
Is Home Charging an Option?
One of the biggest perks of an EV is also its biggest downside: No gas. While this does mean that it will have a cheaper cost-to-own, it also means that you can’t fill up on your way to work in the morning when you need a boost. You will need to be able to charge your car either at home or somewhere that’s conveniently close to your home.
If you are on a standard 120V electric circuit, it would literally take days to charge your vehicle. These breakers aren’t even rated for the number of hours it would take to charge your car fully. Instead, they are most commonly used to run your standard appliances and electronics in your home.
The other option is a 240V electric circuit. On these breakers, you can have a Level 2 charging station installed that will most likely fill you up — or at least get you close to full — every single night. Your electric oven, dryer, and central AC run on 240V.
Either option comes with a home charging setup that can be purchased and installed by a number of companies. Exact prices will vary, but as a general rule for this electric car buying guide, set aside about $1,000 to $2,000 to install a home charging station.
How long do EVs take to charge? The exact answer will vary based on the vehicle, charger, and amount that needs to be charged. On average, most vehicles take about eight hours to charge fully.
The latest and greatest charging stations put out enough power to easily stop a heart. Keep in mind that your car has an inherent charging capacity that will restrict how much power can flow between the charging station and your car. This can matter greatly when you’re buying an electric car.
You need to keep electricity rates in mind for your home, as well. Electric vehicles are measured in kilowatt-hours per 100 miles, notated as kWh/100 miles. In order to figure out how much it’ll cost to have a given car charge at your home, multiply your vehicle’s kWh/100 miles rating by the rate you’re charged for electricity at the times that you’re most likely going to be charging.
Does Range Matter to You?
In reference to EVs, range is used to describe how far a car can go on one charge. For quite some time, the lack of a comprehensive charging network was a large deterrent to the adoption of EVs. While it will certainly depend on your area, this problem has been resolved for much of the country.
You’ll need to consider where you usually drive if you plan to charge at home. You will also want to consider how often you take road trips to decide if the range limitation is even an issue for you.
For anyone looking for a nice easy daily-driver, the range might not be that big of a deal. Even people who take regular road trips should look up the network of charging stations before being deterred, since the network has grown substantially in recent years.
Electric Car Buying Guide: Cost to Own an Electric Car
Some people are drawn to EVs for their environmental friendliness. You won’t be chugging gas every time you head to the grocery store, so many people also assume that this will directly translate into saving money. However, with other maintenance purchases taken into consideration, does this assumption hold true?
Consumer Reports recently found that the average EV owner saves over $800 to $1,000 per year on fuel costs over an equivalent gas-powered car. We assumed there’d be some savings in this arena!
Maintenance and repair were also found to be about half of the amount necessary for gas-powered vehicles, with an average savings of approximately $4,600 over the life of the car.
Depreciation has traditionally hit EVs harder than gas-powered cars, but newer reports are indicating that the new lines of EVs are on par with gas-powered cars for depreciation. Teslas also tend to hold their value well, making a strong case for buying a Tesla.
Ultimately, the true cost of ownership will be different for everyone. There will be variance in how quickly your car depreciates, what you can expect costs for repairs and maintenance to be, and fuel costs.
Based on Consumer Reports, the cost to own an electric car is generally lower than a gas-powered car; however, that isn’t necessarily true of all-electric vehicles. You’ll need to research your exact cost and be satisfied with those prices before you buy an EV.
Our electric car buying guide wouldn’t be complete without mentioning that insurance rates for electric vehicles are often higher than their gas-powered equivalents. This means you need to remember to get insurance quotes while you’re shopping around.
Should You Buy a Used or New Electric Car?
Deciding between a new or used EV is a tough choice to make. Much of the traditional advice applies here, such as obtaining a pre-purchase inspection and considering a CPO if possible.
One of the main unique aspects to consider is the life of the electric battery that powers your entire car. Replacing this battery is akin to replacing an engine in a gas-powered car. This means that when you buy a used EV, you will often have fewer miles on your electric battery.
EV cars also have the potential to make you eligible for a $7,500 tax credit. Assuming that you are eligible for this credit, this can significantly offset the cost of a new EV. Only 200,000 credits were given out to each manufacturer to provide as an incentive for buying a new EV. However, many of these credits have already been awarded, and the number of credits available will need to be increased at the federal level.
Depreciation is also a factor to consider. The value of new cars depreciates once they trade owners. If you buy a new car, you’re guaranteed to lose money on depreciation, but the trade-off is that you’ll get a brand-new electric battery and the latest technology in your vehicle.
There’s a great opportunity for a flexible buyer in the used electric vehicle market. After three years or so, many electric vehicles are traded in or sold out of the desire to buy something new. Many EV owners want the latest and greatest cars out there, especially when they know they’ve been piling up mileage on their batteries. As such, there is an excellent market of used EVs available.
Leasing or Buying an Electric Car
We can’t talk about buying EVs without bringing up leases, too. There are two main points that need to be addressed when you’re considering leasing or buying an electric car.
Drained Batteries
EV batteries can cost about the same as a new engine when they need to be replaced. As such, never having to replace them can be quite advantageous. This is a major benefit of leasing a vehicle over owning an electric car. Once your lease is over, simply trade it in for a car with fresher batteries.
Outdated Technology
This point is technically true for any lease, but the technological differences that EVs have between model years are more significant. A few years of EV evolutions could greatly increase charge speed, expected distance of travel on a single charge, and battery life. Leasing to constantly have the best technology in each of these categories is well worth considering.
Look Beyond Buying a Tesla
Tesla didn’t invent electric vehicles, but its impact on the marketplace cannot be understated. Their success launched EVs into the spotlight, and now, there are EV options from many major automakers.
Let’s take a quick look into the ways that major automakers are adapting and evolving with their EVs:
- General Motors: Aiming to sell one million EVs by 2025, GM has gone all-in.
- Ford: This automaker already offers a handful of EVs and continues to keep developing more.
- Nissan: With over 500,000 Nissan Leaf EVs sold since 2010, Nissan is still pushing to sell one million EVs by 2022.
- Honda: Honda is looking to have two-thirds of all of its auto sales become electric by 2030, including hybrids, plug-in hybrids, and EVs.
- Toyota: They got an early lead on the hybrid market and they’ve carried it over to the EV market with a goal of 5.5 million EVs by 2030.
- Volkswagen: Over the next five years, this automaker is going to spend $85 billion in EV development.
- BMW: With a few EV models currently available, BMW aims to have EVs account for 15% of its sales in the coming years.
- Hyundai: This automaker has goals to sell 1 million electric vehicles by 2025.
- Kia: The goal for Kia Motors is to have EVs make up 25% of global sales by 2029.
With plenty of money being invested into EVs and a large amount of these vehicles currently in operation, we expect to see EV sales soaring throughout the next decade.
While Tesla is more like buying an iPhone, other manufacturers sales are similar to their gas-powered counterparts. See our guide to buying a car in 2021.
Is an EV Right for You?
Is buying an electric car the right move for you? As with many questions that relate to the car buying experience, the answer is: It depends.
As you’ve seen in our electric car buying guide, there are unique factors to consider at every step of the way. While many aspects of buying an electric car are the same as buying a gas-powered car, there are some unique points to consider. Put in plenty of time into researching charge locations and electricity prices, along to your standard car research if you plan to buy an EV.
Is It Better to Sell a Car or Trade It In?
It’s time to buy a new car. What should you do with your current car? You have two primary options: Trade it in at a dealership or sell it privately. Deciding whether you should trade or sell a car requires careful consideration.
Today, we’re going to discuss some of the pros and cons of each option so that you can get the most out of the sale of your car, whichever option you may choose.
Should I Trade in My Car or Sell It?
Presumably, everyone has the same goal: To get the most out of their existing car. When you’re asking whether you should trade in or sell a car, the decision will likely depend on your situation and your priorities.
If you’re looking for a streamlined, simple experience, consider trading in your car. You can trade in your car at any dealership, and it’s much simpler than selling it to a private party. When it comes to ease, nothing can beat trading in a car.
Another benefit of trading in your car is that your total taxable price for your new car will be lower. Depending on the numbers, this has the potential to make trading it in much more lucrative. Of course, this benefit only applies to places that charge sales tax.
The biggest con in the battle of trade in vs. private sale is that a trade-in will have a dramatically lower price. You’ll get more direct cash with a private sale almost every time. However, you may need to spend a lot of time to get this higher dollar amount. You’ll spend time on marketing your vehicle, meeting up with people who may not end up buying it, and may have to haggle over terms for a while.
Should I trade in my car or sell it? That depends on the time you’re willing to wait. You might discover that it’s nice to have an instant payment when you trade in your old car. However, for most people, as they consider the difference between a trade-in and a resale value, they decide that it’s worth the extra time to sell the vehicle privately.
Trade In or Sell a Car: How To Get the Most Value for Your Car
Whether you trade in or sell a car, you’re going to want to make sure you get as much value out of your car as you possibly can. Here are a few things that can help.
Repair Mechanical Issues
Nobody will buy a car when the check engine light is on. Having audible sounds when the engine is starting or idling is also a bad sign.
Since there’s a high probability that someone will want to take a test drive before they buy it, you should make sure that the vehicle is able to accelerate smoothly.
Repair any basic issues that your car might have. You should also consider fixing cosmetic issues. When you’re weighing the options to trade in vs. sell, this will matter.
Stay on Top of Maintenance and Keep Records
Follow the maintenance schedule and keep records of everything done to the car as you own it. Anything from new tires to a new engine should be documented. This will boost your value, whether you sell it or you trade it in.
Trade In vs. Sell: Pick the Right Price
When you’re pricing your vehicle, research is key. Pricing it too high will mean that you’ll likely be stuck waiting for a buyer, while pricing it too low can mean that you’ll miss out on potential income. Use the Kelley Blue Book and our Market Price Report to gain a thorough understanding of how much you deserve for your car.
Trade-in vs. Private Sale: Consider the Perspectives
You’re probably going to have to negotiate, whether you sell your vehicle privately or use it as a trade-in.
Think about the buyer’s perspective. A private seller is most likely buying the car for personal use. They’ll want a reliable car that still has plenty of years left on it.
In contrast, a dealership will be looking to sell your car to another customer or sell it at an auction. Either way, they’re looking to turn a profit.
Keep these perspectives in mind when it comes time to negotiate.
Should I Trade In or Sell a Car?
Should I trade in or sell a car? It depends. Do you want to spend the time to show your car to various private parties and go on a dozen test drives with them? Is it worth it to have an easy transition directly from your old car to your new car? Whatever you decide, make sure to get a good deal by fixing issues upfront, keeping the car maintained, and researching the right price.
Myths That First-Time Car Buyers Believe
Car-buying myths seem to be just as common as urban legends. Nobody knows how these myths get started. We’re willing to bet they get started when someone misunderstands the terms of a deal or when they misunderstand car buying in general. First-time car buyers can start their experience off right when they don’t let these common myths get in your way!
We’ve gathered five common car-buying myths that you may have heard at some point in your life. We’ll take a look at each myth and pull it apart to find out why it’s incorrect. Let’s get started.
Myth #5: Buying a Car in the Rain
For some reason, buying a car in the rain has become a rock-solid piece of car-buying advice for some people. Every first-time car buyer beware: The rain has no impact on car sales! This idea is based entirely on the belief that car dealerships will be slow on rainy days, so they’ll be desperate for sales.
In truth, this myth has been around for so long that some car dealerships have reported being busy on rainy days. Let’s put this myth to rest and stop flocking to car dealerships when it rains.
Myth #4: Buying Cash Will Get the Best Price
We’ve all heard that “cash is king,” and while that’s true in some areas, car buying is not one of them. This myth implies that you’ll receive a better price if you walk with a briefcase full of $100 bills and offer to buy your dream car using cash.
It might seem like a car salesperson would be all over that, but in actuality, you may get a worse deal than the next customer who is financing their purchase.
When you finance a car, the car dealership is able to bake in some profit into your loan. Financing is one of a dealership’s main profit streams. As such, dealerships are more motivated to make a deal with someone who is going to finance their car than someone who is going to pay in cash.
Learn the dealer lingo. Check out our F&I office glossary of terms.
If you want to pay for a car using cash, finance it at the dealership and make sure there is no prepayment penalty. Then, pay it off in full a few weeks later. It’ll work in the same way as it would if you had bought the car with cash, but you’ll receive a better deal.
Myth #3: Buy Now or the Deal Will Disappear
One of the main pieces of car-buying advice that we always tell first-time car buyers is to walk away if you don’t feel comfortable with a deal. As strange as it may seem, buyers can get stuck in the mentality that walking away means they’ll lose out on the car. That’s why this car-buying myth has been around for so long!
Yes, walking away from a deal will mean that you won’t get that specific deal. But next week or next month, chances are that you can get an extremely similar deal. That’s why we always recommend talking to multiple car dealerships.
The only exception to this myth comes when you’re after a limited make and model. If there’s a chance that the dealerships will run out of the car you’re after, then this myth may actually be true for you.
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Myth #2: Buying Used Will Save You Money
One of the most popular car-buying myths is that used cars are the best way to buy. The idea comes from the fact that the value of the car has already depreciated, so you’ll be buying a car that’s closer to its true value.
While there is some truth here, you shouldn’t rule out buying a new car in total. You also need to consider the cost of maintenance and upkeep that comes with a used car.
Most importantly, you’ll have far more lending options if you go for a new car. Because dealers are incentivized to reduce the time on the lot for new cars, they may be more willing to negotiate on the price of a new vehicle.
Myth #1: I Don’t Know Enough to Negotiate
Some first-time car buyers think that negotiation is a matter of knowing specific key phrases that will turn the tide in their favor. While knowing what to say and when to say it does help, knowing the value of the car that you’re buying and being confident and firm is actually the thing that is the most important.
There’s no knowledge threshold to keep you from being a skilled negotiator. Use our member solutions to determine how much you should be paying for a new or used car and confidently remain within the realms of the deal that you’d like to land.
Unraveling common car-buying myths can help you to win in negotiations. While some of the myths have nuggets of truth in them, others are legitimately bad advice. Stick with the sources that you can trust for quality advice about how to score a great deal.
