The Trade-In

A red car on a road.

If you are planning to get rid of your current car when you buy a new one, the first thing that you have to decide is whether you will trade in your car to the dealer or sell it yourself to a private party.  You will need to follow a different negotiating sequence depending on whether you will or will not trade in your car to the dealer.

If you decide to trade your car in at the dealership, the next thing you will need to factor in is the trade-in side of the negotiation. When you trade in your car, you are essentially conducting two negotiations at once.

  1. For the new car you are the buyer and you must negotiate the final dealer’s sales price for the vehicle you are buying.
  2. For the trade-in, you are the seller of the vehicle and you do not know the dealer’s best offer for your trade-in at the onset of the negotiation.

Your first task is to try to make an estimate as to the most that the dealer would be willing to pay for your car. The key components will be to establish what the dealer believes is the market value for the car and whether or not the dealer will keep the car to sell as part of their used car inventory (potentially make a lot more money) or will they sell it at auction.

Finding the market value for your trade-in is simple, although does not always reflect the exact amount a dealer may give you.  There are many factors that will determine that final offer amount, including:  condition, make and model, miles and believe it or not, how much you cleaned it up before you brought it in for consideration as a trade-in. To find the value, simply visit our Used Car Value section of this website.  Also, if your market offers a CarMax you may wish to take it to them for a free no obligation true price offer for your car. The offer provided is at no cost and you are not obligated to purchase a car from them.