What you should know before you trade in your car

Trading in your car can be a convenient way to change up your old vehicle while offsetting the cost of a new one. However, it's essential to be prepared to ensure you get the best deal. Here are some crucial points to consider before trading in your car.

1. Understand your car's value

The first step is to determine the market value of your car. Several online tools and resources can help you estimate this based on your car's make, model, year, mileage, and condition. An estimate will give you a baseline to understand what your car is worth before heading to the dealership. At the dealership, a sales consultant will also be able to give you an accurate book value based on your unique vehicle. 

2. Clean and prepare your car

Presentation matters when trading in your vehicle. A clean, well-maintained car can make a positive impression and potentially increase its value. Thoroughly wash and detail your car, fix minor issues like scratches or dents, and ensure your service records are up to date. This shows the dealer that you have taken good care of your vehicle.

3. Get your documents ready

Ensure you have all the necessary paperwork before you trade in your car. This includes the car’s title, registration, any loan payoff information, and maintenance records. Having these documents readily available can streamline the trade-in process and avoid delays.

4. Know your loan status

If you still owe money on your car loan, understand your loan settlement amount. This is the amount required to pay off your current loan, which may differ from the balance shown on your monthly statement due to accrued interest. If you’re uncertain of this amount, contact your credit provider. Knowing this figure is crucial, as it will affect the trade-in value and how much you’ll owe or receive.

5. Get multiple appraisals

Don’t settle for the first offer you receive. It’s wise to get appraisals from multiple dealers to compare offers. This gives you leverage and ensures you get the best possible trade-in value.

6. Understand the trade-in process

When you trade in your car, the dealer will inspect it and make you an offer based on its condition and market value. If you accept the offer, the amount is applied towards your new car purchase. If your car is worth more than the new car, you’ll receive the difference. Conversely, if it’s worth less, you’ll need to pay the balance.