When it's time to replace your old car with a new or used one, there is always a question: how to dispose of the old car in the best way. Of course, if your old car is in pretty good shape, you may get a fair amount of money selling it or trading it into a dealer as part of the deal of buying a new or used vehicle. The game is to finally minimize the amount of money you actually pay as the result of the whole deal.

You may surely sell the old car at higher prices than to trade it in. Potential buyers are not so well trained in vehicle valuation as used car dealers, therefore, they won’t be squeezing every buck out of it, letting you some ease. But it will take much longer and will include all bearable risks. You would have to factor in so-called exposition time, which means how long you’d have to wait until a qualified buyer comes up to buy the vehicle finally. Also, bear the risks of dealing with all kinds of prospective buyers, including possible conmen, setting up the vehicle exchange for money on your own.

Another thing is when your old car is in a really poor shape it's hard to sell it at any reasonable price. Then your choice is between trade-in and dumping options. In that case, it’s much more beneficial to trade in your old car and get at least some amount for it than to pay utilization fees.

One way or another up to 50% of all car purchases in the US include a trade-in. Yes, usually you get less money trading in, but it’s convenient and helps to get rid of the burden of selling an old car on your own.

First of all, it’s important to figure out the so-called fair value for your car (some people name it a “Blue Book Value”). To do that, go to the Kelley Blue Book “What’s my car worth” page and fill out the information on your car’s location, mileage, engine type, and horsepower, transmission, suspension, wheels and tires, steering booster, electric and electronic equipment, style, condition, design of the car interior and so on. Be honest and accurate describing the car options and actual condition, as the fair value is calculated based on the data you actually input. Keep in mind that a majority of used cars are either in “fair” or “good” condition because the requirement for “very good” and “excellent” conditions are quite strict. If you’re not sure what condition to rate your car, always choose the lower one to be on the conservative side. Finally, you’ll get the fair price range on the results page. This figure will give you a basic idea oа the trade-in price offer to expect from the dealership.

Generally, there are three types of vehicle trade-ins on the market:

1. 2-4 years old cars, very recent models in good condition requiring minor repair or tune-up. These vehicles are to be sold retail on a dealer’s lot.

   For retail reselling, a dealer usually wants to make a 15-20% profit. All repairs and necessary improvements such as restyling or new tires will be added to that. The final discount may go up to 23-25% off the Kelley Blue Book value, for example:

   Suggested retail price	$32,000
   Kelley Blue Book Value	$30,000
   Dealer’s operating profit	$6,000
   Repairs	$2,500
   Tune-ups	$2,000
   Trade-in offer	$21,500

   Kelley Blue Book Value

2. 2-6 year old cars requiring major repairs, to be sold at an auction

   For an auction selling, the dealer will factor its profit, the suggested auction value, and transportation costs either on flatbed or carrier:

   Suggested auction price	$19,000
   Kelley Blue Book Value	$20,000
   Dealer’s operating profit	$4,000
   Transportation	$1,000
   Trade-in offer	$14,000

3. Vehicles of no value to a dealer but probably of interest to somebody else. Perhaps, to be sold on Craigslist.

   The trade-in value a dealer will offer for that kind of car will be deducted from the discount on the vehicle you’re going to purchase as a part of the entire deal.

Which cars can be appraised

To be placed into categories 1, 2, or 3 of the above, your car needs to go through the appraisal process. First of all, your car must be physically presented to a dealer for inspection. Second, the appraiser will decide whether your vehicle fits into category 3.

For all other vehicles, the appraisal process consists of the following steps:

• Fill out the appraisal form, which is quite similar to that of the Kelley Blue Book’s one
• Run the Vehicle History Report from which a dealer will get a full info on accidents, airbag deployments, and so on
• Physical inspection
• exterior
• engine compartment
• interior
• wheels and tires
• headlamps and turn signals
• Test-drive
• engine running on different RPMs
• transmission shifting
• electric equipment
• servos
• infotainment center.

As a result of the appraisal process, a dealer will come up with a trade-in value based on suggested fair value, vehicle history, and physical inspection of the car. 

As soon as you get the appraisal numbers, several strategies are used for negotiating the trade-in and purchasing deal. An initial trade-in offer is usually on the lower side of the fair price range. You can move it up by looking more closely at comparables, timing, and lot times for similar vehicles.

1. Split trade-in and purchasing into two separate prospective deals (at one or two separate dealerships). That way, you may get trade-in and purchase offers from two or more dealerships having them compete with each other separately pricing trade-in and purchase transactions. You may finally lean towards the dealership offering the best prices. 
2. Make trade-in and purchase the one package deal. In this case, you’ll be trying to maximize the trade-in vehicle’s value as a discount off the price for the car you’re purchasing.  
3. Run an independent appraisal and use it as the guide to price negotiating. You may always try to negotiate a higher price by stating that “the independent appraisal value is slightly higher than the one you offer.”

Ask a dealer to give you the trade-in offer in writing.

When using these strategies, pay attention to:

• average lot time for similar vehicles. Lot time is the exposure period a vehicle has to be displayed on a dealer’s lot (or web page) in order to be sold. Time is money, and after 30, 60, and 90 days of exposure, a dealer’s premium usually diminishes from 20% to 15 or even 10%. You can find out a lot exposure time for a car by browsing web offers for similar years models cars. The shorter lot time for your car, the higher the profit a dealer can get out of selling it retail - the higher trade-in value you may demand. 
• comparables. Find a few comparable vehicle prices offers online and compare all the vehicle options. Answer yourself the question “why may prices differ for similar cars”? After two or three exercises like that, try to come up with unbeatable points why trade-in for your car should be higher.
• timing. Car sales is a highly seasonal business. Prices, supply, and demand vary from month to month and from week to week inside the month. The slowest days are usually Mondays and Tuesdays. The slowest months are January and February. Hustle time is the end of the month when sales people are trying their hardest to make their percentage of sales and bonus incentive money. So, probably the best time to trade-in your vehicle getting the most value out of it - is January 25th or something like that.

Now let’s briefly get through some things to avoid when trading in your car.

• Repairing or tuning your car. This is mostly useless since a dealer can make the same work or tune-up on your car at a substantially lower cost. Therefore, your investment in repairs won’t increase the trade-in offer.
• Hiding information. These days a dealer and an appraiser can have explicit data on the vehicle by running the car history using VIN and title. Physical inspection will uncover any possible flaws not listed in car history.

Is trading in a car worth it?

Yes. It is saving you the time that otherwise would be spent on selling the car by yourself. It mitigates the risks of setting up the exchange of a vehicle for money on your own. Finally, it gives you the convenience of getting the money right away while purchasing another vehicle.

How do I get the most trade-in value for my car?

Find out the Kelley Blue Book value for your car. Get the vehicle appraised. Use the appraisal price as a guide for price negotiation. Pay attention to lot times, comparables, and timing for a projected trade-in.

How is trade value calculated?

It’s calculated based on appraisal results, retail or auction approximate value, the dealer’s operating profit and costs such as necessary repairs, improvements and/or transportation.

What do car dealerships use for trade-in value?

Dealer offers trade-in value based on market price, fair value appraisal, and cost calculation.

What is the trade-in value of my car?

Come over to Rolls Auto Sales to find out. We’ll give you a written trade-in offer.

What are the best trade-in value cars?

2-4 years old vehicles, very recent models in good condition requiring minor repair or tune-up, getting the best trade-in values.  

Can I trade in my car if it is not paid off?

Yes, there are trading-in and financing options for situations like that.

What is the value of a 2020 used vehicle?

The value for 2020 or 2021 used vehicles will be at least 15% lower than the new vehicles' price.