It used to be that trading in a car was an invitation for the consumer to receive the lowest offer possible. Now consumers have more trade-in options, from up-front price quotes to guaranteed values and beyond. Don’t be afraid to explore your trade in options.
A smoother transition into a new vehicle
Trade-ins are certainly a convenient way for consumers to complete all auto-related chores in one visit to a dealership, notes Edmunds. It eliminates the effort of selling the old car independently, plus the dealer takes care of all the necessary paperwork. Trading in a car in some states entitles the consumer to a sales tax break, too.
On the flip side, however, trading in a car at a dealership can sometimes lead the consumer to take in slightly less money on the exchange than the vehicle could net in a private sale. Also, Edmunds warns that some dealerships play games with the consumer by ordering salespeople to “steal the trade.” In essence, this is when the salesperson presents grossly undervalued prices to the consumer, claiming that the prices are low because that’s what the trade-ins actually sell for at auction.
Following supply and demand
While the vehicle trade-in process at a dealership has become more user-friendly, the ultimate regulator remains supply and demand.
“Dealers have been increasingly desperate for trade-ins, as new-car inventories are tight and used prices have sustained at elevated levels,” said Jessica Caldwell, Edmunds.com’s director of pricing and industry analysis.
Consumers can follow the automotive press to discern industry trends. This process should also include online tools like Edmunds’ True Market Value valuation tool. Perusing online classified ads for cars for sale that are similar to yours is also useful.
Some popular trade-in options to consider
Autotrader.com gives users the power to appraise their trade-in, get an upfront price and connect with dealers directly. AutoNation Direct does much the same, and all parts of the transaction can be concluded at the car buyer’s home or office, trade-in included. Hyundai and Subaru even offer trade-in guarantees at purchase time. When the consumer buys a new Hyundai or Subaru vehicle, the dealership quotes a guaranteed future trade-in price that is good for a number of years.
“Depreciation is the single highest cost of car ownership,” said Hyundai Motor America CEO John Krafcik. “While Hyundai’s depreciation is now among the lowest in the industry, Assurance will remove many of the barriers and concerns about vehicle ownership.”