What's Best - Selling your vehicle Privately or Trade-In at Dealership
Trade less hassle ? It's a fact the majority of people that trade a vehicle at a dealership is thinking less hassle, but is it less of a hassle when 99% of the time their first offer is a low ball trying you on for size.
Selling privately more $$$$ ? " I agree " you will get more $$$$, but how much more when you factor in you will only be paying sales tax on the difference in cost between a trade-in value and the price of the new car, not the full amount
Prepare for resale privately there are an abundance of websites with long drawn out boring detailed ideas on the matter you can surf... Let's narrow it down to the foremost important factor " eye appeal " first impression sells - and that spells clean inside and out, everything else that transpire from that moment has to do with how good you are at negotiations. Vehicle may have issues that are worth the investment to be fixed prior to sale and just as many there are not.
Prepare for trade-in with dealer I got to let of a little steam here " There is nothing more disgusting than appraising a filthy car loaded with clutter and sticky stain touching areas, makes me puke, but in all fairness dirty or clean an experienced appraiser will arrive at the same dollar amount,,, I always thought,,, look at you,,, so clean on the outside and beyond your cover dress code what a pig you really are.
To the point,,, don't waste money beyond a car wash and a vacuum showing your trade to a dealer, most dealers have a set procedure in place and if it's something that you fixed that went through their radar chances are it did not come into play or if it did they could have fixed it for much less than your wasted money.
Focus on the trade difference …lets say you've been looking at a $15,000 car at one Dealership and your trade allowance was $3,000…but another dealer allowed $4,000 trade for the same type car in same condition but the Dealer wanted $16,000…there is no difference…you would like the high trade in value from the one dealer…and the discounted price from the other…this can be very frustrating…You must concentrate only on what you have to pay difference, not what Dealer tells you the trade is worth...
Trading your vehicle to purchase brand new its a very simple process shopping your trade one dealership VS another...
Trading up a few model years for another used vehicle becomes more complicated as there can't be 2 identical used vehicles, they may look the same with about same miles but will not have same history and most likely wont perform the same
Shopping at a one price store where the prices are firm you are more likely to get a true value for your trade
Shopping at a store where prices are negotiable you will get a higher trade value on paper as your trade allowance figure will show against the asking price...
Your Trade is " upside Down *
A dealer can roll a negative amount into another car,but the maximum amount will be subject to how the car your buying " books " with lender.
" example " dealer appraise your trade in at $5000. but you still owe $8000., the vehicle you are buying is $15,000 , the bill of sale will show you paid $18,000 for vehicle, and the dealer will payout the lien in the amount of $8000.
It's red flags to trade a vehicle with a negative factor, unless you can pay the difference out of pocket
(1) If it's written off in an accident the Insurance will only cover current market value, and you will be making payments without wheels
(2) Should you want to trade again prior to termination of loan, you most likely will be even further in the hole compared to your last transaction
(3) Instead of paying taxes on $15,000 you will be paying taxes on $18000.
How to Deal with a Vehicle being Upside Down
A high Interest rate is the most likely cause for being upside down because the major portion of the monthly payment goes toward the Interest rate and not the depreciation factor, end result being upside down.
There is no escape from this messy situation, going to a dealership is not the answer, dealerships have no compassion, they will try to get you refinanced with the negative factor build into another loan, if they succeed getting you financed end result down the road, will be " YOU " owing thousands on a clunker that's worthless.
OPTIONS, going bankrupt is a nasty way out as it will take years to reestablish a credit rating, make the vehicle last till it's paid in full is a valid option, and then pay cash for another vehicle if your Interest rates are high, or buy the least expensive transportation if you're financing with high rates, if your emotions take over you will end up with fancy wheels, but you will be back to square one.
SUMMARY,,, If you been making payments on time for over a year and stuck with upside down payments, your best approach will be trying to lower the Interest rate, contact lending institutions, start with current lien holder and where you do your banking, lay your cards on the table, you want to refinance the loan to get a lower rate to pay out the lien to get your feet back on the ground.
How a Dealer Evaluates Your Trade
You found the car you want to buy and your thinking ( example ) if I can get $ 7000. for my trade its a deal.
The salesman fills out an appraisal form and ask's you how much were you thinking because the first question used car manager will ask salesperson , how much you need to make the deal " The right approach " you tell me " let dealer make the first move.
The used car Mgr will inspect your trade going through a series of steps you will find if you navigate to " the test drive " webpage.
Mgr will make notes
EXAMPLE needs 2 tires $ 150. - noisy muffler $ 100. - damaged fender $ 250. - total visual re-condition cost $ 500.
The Next Step Can Branch Out Having Several Answers
# 1...Your trading a Ford at a Ford dealership and the used car Mgr wants the trade for his inventory. His next step is checking dealer auction results for the past few weeks and Mgr will most likely find same type vehicle with about same miles and price it was sold for, Example he found same at $ 5000. now he deducts the $ 500. for re-condition and will be willing to pay $ 4500. for trade, but its testing time to see how sharp you are having done some homework and will most likely send salesman back with an offer $ 3500. to $ 4000. for you to accept.
# 2...Your trading the Ford lets say at a Toyota store, If the Mgr is a real pro with experience he will arrive at a trade value without shopping your trade, most Mgr's lack the experience to this level and will phone wholesalers and in this example Ford dealers to get bids and at same time disclose his findings about the Tires - Muffler - damaged Fender which allows bidder to arrive at a fair bid.
I came across an add in bold letters DRIVE- DRAG OR PULL YOUR TRADE $ 1000. GUARANTEED
I showed the add to two friends and asked, if you were in the market for a new car right now and had a trade worth less than $ 1000. would this add be of interest. one comment was, i would sure look into it, the other comment, wow how can dealer afford to do that.
Both answers made me shake my head and laugh as it confirmed once again the average buyer is gullible not having done any homework falling for scam advertisements. I have never questioned the intelligence of dealer adds only the intelligence of consumers reading them.
HERE IS HOW I READ THE ADD... if you arrive at dealership with an old clunker thats totally worthless you get $ 1000. in a trade on another car, its going to cost the dealer having it shipped to the wreckers...that tells me to arrive at dealership knowing any car will have $ 1000. discount before i even start to negotiate...now if i had a trade worth about $ 500. i then know $ 1500. discount is where i am at before negotiation for a further discount.
Want to know some more dealer advertised scams ? http://usedcartips.org/SCAMS.html