Trading Your Old Car In.
By all means, if you can, sell your old car by yourself. Every used car dealership is going to place their asking price $2,000 to $5,000 above their cost for it and their cost for it is going to be at or below the wholesale value. This means that when you trade your car in, the absolute best price you are going to get for it will be wholesale.
The dealership will also complicate the math to such an extent that the average person can’t really keep up with how it all works out, so they will just take the car dealer’s word for it, which gets even more tricky, because now you’re not only getting a bunch of numbers jumbled up and thrown at you, you’re also getting distracted by the terminology they are using.
For some people, selling your car by yourself is just too time consuming and inconvenient or maybe you just don’t want to be a car salesman or maybe it’s some other reason. If this is you, then another option you might try would be to take your old car to a small used car lot (NOT the one you’ll be buying anything from) and make a deal with the owner to sell your car for you on consignment. Call your banker that has your loan waiting for you and ask him or her to look up the loan value for your old car. Hopefully it will be a price that you can live with, and you and the owner of this small car lot will be able to come to an agreement where you can decide the minimum amount you need to get for it, and anything that he makes above that price is his to keep.
Whether you sell your car by yourself, sell on consignment or trade it in, you’ll still want to know the loan value of your old car.
Don’t let the dealer "steal" your trade-in! They will offer you the absolute minimum you will let them get away with. The best way to avoid this trap is to check the current Kelley Blue-book trade-in value for your car before you ever go to the dealership. Blue-book value on cars is reputable and fair. Be careful to be honest with yourself when assessing the condition of your car. Blue-book uses "poor"; "fair"; "good"; and "excellent" as categories you have to choose in order to assess the accurate value. You want the legitimate value and it’s common for all of us who love our cars to rate them better than they actually are.
On a side note here, I just did a hypothetical check on the Blue-book trade in value for a 2004 Toyota Camry with 47,000 miles on it, and I chose the "Good" option as its condition---trade in value was $9,760.00.
On the same site I did a check for the retail value, and it was $14,815.00!!!
That’s a difference of more than $5,000! This is a good example of why you should sell your car either by yourself or on a consignment basis. Either way you should be able to get at least $11,000-$12,000 in this example. That’s an extra $1240-$2240 in your pocket.
However you decide to get rid of your old car, you should clean it inside and out quite thoroughly. Your car only gets one chance to make a first impression, and an appraiser at a dealership will be going over it with a fine toothed comb.
Make sure the odometer is working. A car with a non-working odometer is virtually worthless to a dealer (or to anyone trying to sell it for that matter). Make sure the air conditioner is blowing cold air. Air conditioning systems are very high priced items to repair, and if the dealership has to repair yours, then he will figure in "X" number of hours times the dealership labor rate + parts, and will knock that off his appraisal of your car’s value.
Vehicle appearance & cleanliness, a working odometer, and working air conditioner are the three most important things you should be aware of prior to either letting an appraiser get near your trade in, or trying to sell the car yourself or on consignment.