Getting information on purchasing a new vehicle is easy these days. I know of no other business, except automobiles, where you can find out what a seller pays for his or her wares. Advantage: car buyer.
When it comes to used car values, however, the waters get very murky. I have callers to the radio show all the time who put stock in what some of the online websites say their car is worth. There are a couple of things I always remind people of, and that is that these sites makes their money selling ads and customer information to car dealers- and as I often say on air “KBB don’t write checks.” A car is only worth what someone is willing to pay for it.
So, as a consumer, what do you do with your trade-in? Luckily, these past five years or so, dealers have had to be very aggressive with used car trade evaluations. If you have a nice, clean, average mileage trade-in, dealers actually really want your trade-in, and will step up and pay top-dollar for it, knowing it will sell fast and make a buck. I have seen dealers lose money on a new vehicle just to get the trade-in. Those cases are easy, and if your car fits the above criteria, you won’t have any trouble making a trade.
However, what if your car is old or has a lot of miles? Then the decision comes down to how willing you are to maximize the value. If a dealer is not going to re-sell your car, they are hoping to own it for what they can get out of it to a used car dealer, or at auction. They don’t really care about making money on it, but with low-margins on new cars in most cases, they certainly don’t want to take a loss on your old family truckster.
Then the decision comes. Trade it or not trade it? I urge listeners to try to stay objective. Often, cars you have had a long time hold sentimental value to you, but not to anyone else. It is cute your child lost his or her first tooth in the back seat, but that doesn’t really help the value. Keep everything in perspective and try to see your car from the eyes of a stranger.
If you don’t trade it in and be done with it-which is the easy way-then you can withhold it and try to sell it yourself. Good, older cars are always in demand for those who are looking for their kid’s first car, or people who have cash, but cannot finance.
There are also some advantages to donating your car to charity, or perhaps you have a friend or relative in need who could use a good set of wheels that still has some life left in it.
For most people, trading your car in at a dealership is the easiest, and safest, method of upgrading your transportation. No matter how old or new your current car is, a dealer has a vested interest in being fair on your trade value, after all, the sale of a new vehicle is at stake.
Many times, I recommend people get a cash offer from a neutral dealer, like Carmax, just to get a feel for the value of their trade-in. Again, a car is only worth what someone is willing to write a check for.