Your Trade - You'll Give Me What!!!

It’s gotten you safely to the hospital for the birth of your first born. It’s taken the family on the last five memorable vacations with no problems. It’s taken you to all those early morning business meetings. It’s worth it’s weight in gold, right? Wrong.

Unfortunately that’s how you feel about your used car at trade in time. Because of the emotional value you place on your car, to you it has loss very little of its original value.

To the professional appraiser your used car is just a hunk of metal. Used car values are determined by the price paid, for similar cars, at weekly auto auctions held around the country. Similar cars can command different auction prices depending upon the area of the country. Each week all the used car prices set by the auctions are published in the Black Book. This book is the leading source for true used car wholesale values.

Professional appraisers and used car managers use the Black Book. Not the Blue or Red Books used by financial institutions.

Keep the trade as a separate transaction when buying a new car. Research the value of your used car just as you do for the new car. Determine what the dealer will pay to buy your car if you were just selling it to him/her.

If you have a balance or payoff on your trade don’t expect it’s market value to cover this balance. Rarely is that the case. If the market value is not high enough then one of two things will occur; first the dealer will inflate the price of the new car to off set the payoff or two, you will have to come up with the cash to payoff the difference. Either way you will pay.

Negotiate hard for a good buy figure for your trade. Call several used car lots and get a buy figure. Place an ad in your local paper to see what buyers will offer. Check the prices of similar cars listed in your local paper. Compare all these prices to the quote given to you by your selling dealer.

One of the classic lines from a salesperson is, "We’ll sell you the new car for $$$ plus your trade." Does this tell you what your trade is worth? Keep it separate.

Questions to ask the salesperson: Will you shop my used car to get the best price? Will I get more for my car if I repair these minor problems? Is my car in good enough shape to place on your used car lot?