So, you're ready to buy a new car and you're shopping the dealer car lots here in Harrisonburg. And you've got a trade-in.
We find customers have a lot of questions about trading in their old car when new car buying. In this post, we answer the most commonly asked questions.
How Does A Trade-In Work When Buying A New Car?
When you have a car to trade at our Harrisonburg dealership, the value of your used car is subtracted from the purchase price of the new car.
If your current vehicle still has a loan balance, the dealership takes over the loan and then pays it off. In order to do that, you'll need to bring this information with you:
• Your loan information including the account number and payoff amount
• Vehicle registration
• Your driver's license
• Proof of insurance
• Vehicle keys and any remotes
• A printout of the trade-in value
There are two kinds of trade-ins if you still have a loan balance:
Positive Equity-If your car is worth more than the amount you owe on it, it's called positive equity. That means it's like having money you can apply toward your new vehicle.
Negative Equity-If you owe more than the car is worth, that's called negative equity or being "upside down." That means you'll have to pay the difference between the trade-in value and the loan balance.
You can do that either with another loan, with cash, or you can roll what you owe into your new car loan. We don't recommend the latter. In fact, we recommend you postpone your new car purchase until you have positive equity.
How Long Should I Keep A New Car Before Trading It In?
Maybe you don't like the car you have and you're ready to trade it in for something else. Before you take steps to buy a new car, you need to know the factors that affect a trade-in.
The biggest one, of course, is depreciation. Ideally, wait at least three years before you consider replacing your vehicle. That's when depreciation slows down.
If your vehicle is a used car and has already experienced the big depreciation drop, you can usually trade it after a year or more.
Other factors to consider for a trade-in are:
Actual cash value-This is the amount that your vehicle is actually worth. Visit sites like Kelley Blue Book or NADA guides. Or, get the dealer to appraise it.
Mileage and condition-If the vehicle is in rough shape and it has high mileage, it will lower the car's value.
Equity-As we mentioned above, positive equity means it's worth more than the loan balance. If you're upside down, the vehicle will have negative equity.
What are the Advantages of a Dealer Trade-In?
Selling a car yourself is difficult. Not only do you have to invest in cleaning it up, you have to make repairs, and advertise it.
Choosing to trade-in your current car relieves you of that responsibility.
Perhaps the worst part of selling your vehicle yourself is the waiting game-when is it going to sell?
When you're ready to move on and get a new car, waiting for your old vehicle to sell can seem like an eternity!
Choosing to trade it in at Joe Bowman Auto Plaza means we do the work, not you:
• We take steps to improve its value
• Possibly paint the vehicle
• Tune it up
• Perform necessary repairs-We use a 75-step process to ensure the vehicle is sound before placing it for sale
• Advertise it
• Store the vehicle until it's sold
• Include a limited warranty once it passes our rigorous testing
Trading in your old car allows you to move ahead and enjoy your new purchase. You won't have to keep looking at your old vehicle wondering when it's going to sell.
When you're ready to buy, let us do an appraisal on your current vehicle. Leave the hassle of selling it on your own to us. It's what we do every day!
