Your ‘baby’ just passed the 100,000 miles milestone, and even though the vehicle performs exemplary, you know that you’d rather it trade-in soon since the trade-in value1 won’t be higher than it currently is. Thus, before you head on to the car dealership, here are some pros and cons of trading in your car.
Advantages of Trading in Your Vehicle
Car trade-ins are popular, and the process is faster and easier than when you opt to sell the vehicle to a private party. Nonetheless, some people tend to avoid trading in their cars and prefer weeding out potential buyers themselves than bargaining with a dealer. So, before, you dismiss the trade-in idea, here are some of the pros of trading in your car:
You Only Deal with One Person
When choosing to trade-in your vehicle, you’ll have to visit various dealerships since you want a dealer who’ll offer you the best trade-in deal. When you’ve completed the negotiation, you’ll then have to deal with only one dealer who’ll handle the whole process, including your paperwork.
It’s a Quick Transaction
Selling your car to a private party can be a long and tedious process that requires a lot of effort. You’ll have to find ways to advertise your vehicle then set up several appointments with potential buyers and also handle all the paperwork yourself, which takes several days. Nevertheless, trading in your car through a reliable car dealership will take only a few days.
There Are No Comebacks
Trading in your vehicle will allow your next purchase to be more affordable. Moreover, once the trade-in is concluded and the dealer has taken your car, you won’t have to worry about them coming back to you if any disputable mechanics turn up regarding the vehicle. In a private party sale, on the other hand, there will be numerous chances that the buyer will come back to you if they experience any issues down the line.
It Lowers the Price of Your New Vehicle
If you own your vehicle outright, the car dealership2 will apply your car trade-in value to your new ride. For instance, if you want an automobile for R30, 000 and the auto dealership offers you R10, 000 for your trade-in, you’ll only need a loan for R20, 000. Moreover, since the dealer knocked down a couple of bucks off your final price, you’ll also pay less in taxes. Isn’t that incredible? If you want to figure out the value of your car, you can use the car value estimate calculator to figure out an estimate of the amount you’ll get from the dealership.
Someone Else Deals with the Car Maintenance Issues
With a trade-in vehicle, you won’t have to worry about all the dents since most car dealerships conduct an inspection and are glad to take your vehicle as it is even though it has several scratches or has no service history.
There are also no irate buyers like when you’re dealing with a private party.
Disadvantages of Trading in Your Car
In as much as trading your car has various perks, there are also several drawbacks to it. Here are some of the negatives you should consider before you make the final decision.
Trade-in Prices Are Low
One of the major cons to trading in your vehicle at a dealership is that you’ll probably get less capital for it as compared to if you were selling it to a private party. The car dealer will need to make a profit so they’ll offer you a price that’s below the car’s retail value, and depending on the vehicle condition; the difference can be very significant. According to research, second-hand vehicles were seen to be worth 15% to 30% more than the price a dealer can offer you.
To figure out the amount your vehicle is currently worth, you can use the car value estimator online and see the amount your dealer can offer you. You also opt to use various vehicles listing websites to get a general idea of what similar vehicle models and makes are being sold for. Some sources also offer you a clue of the current value that you’d get for your vehicle in the market3. By paying a nominal once-off fee can access the trade-in, retail value and market values for your cars to ensure that the price you’ll be offered on your automobile as a trade-in is precise.
When you choose to trade-in your car, you’re restricted to choosing a new vehicle for that dealership, thus limiting your options. You might also not find the ride you want since you’ll be restricted to the dealer’s stock and availability of cars. Nonetheless, the upside is that when you trade in your vehicle with a specific dealer, it may lower your new vehicle payments thanks to your vehicle trade-in value.
The Dealer Might Not Want Your Car
Last but not least, the dealership might reject your trade-in application. Dealerships don’t desire all second-hand cars since they might not make a significant profit from it.
Car dealers need your business, and they also have to sell cars to make a living. Thus, they’re ready to accept your trade-in and negotiate a reasonable price. Some dealerships might want to undercut you, so make sure you conduct extensive net research and familiarize yourself with the entire process, and you’ll get the most cash possible for your car.
You should also remember to not forget about car insurance since anything can happen on the road, thus making it essential to insure your car.
You may also want to know what to do if you’ve written off your car instead.