If you're in the market for a new car but need to get rid of your old one first, you're probably not looking forward to haggling with a dealer about your car's trade-in value.
For that reason, far too many consumers take the first offer they receive without knowing if they could have gotten a better deal somewhere else.
"It is possible to do well in a transaction with a dealer, but you have to do your research," says Jack Nerad, executive editorial director and executive market analyst with Kelley Blue Book in Irvine, Calif. "Just a half-hour of Internet research can really pay off."
The trick is to do some upfront preparation and learn the local market. Here are four ways to accomplish that.
When getting rid of your old car, you probably won't get an amount close to what you paid. However, with a little research and persistence, you can still get a fair price for your trade-in.
Do your homework When it comes to getting value for your trade-in, one mistake towers above the rest, Nerad says.
"The biggest mistake people make is in not knowing what their current vehicle is worth when they walk into a dealership," he says. "The key to doing well in a transaction with a dealer is to be knowledgeable."
Before heading to the car lot, research your car online, says Scott Painter, founder and CEO of Zag, an auto shopping, research and pricing technology platform to affinity buying groups based in Santa Monica, Calif.
"Pretend you're a buyer and look up your kind of (trade-in) vehicle," he says. "Look at what other people are asking for your particular kind of car, especially in your local area. This will give you an understanding of what your market is likely to bear."
Some people are surprised to find prices lower than they expected, especially if they thought the car would be worth close to what they originally paid.
It's better to deal with this "reverse sticker shock" before going to the dealership.
"The good news is that in the auto industry, information is relatively easy to get," Painter says. "Web sites like Kelley Blue Book and Edmunds.com give you a good view of the market, and the information is readily available for free. All that's required is time to spend a few minutes online."
Once you have a ballpark figure of what similar cars are worth, do an honest assessment of your own vehicle and its condition.
"Be realistic about what you're selling," says Sheronde Glover, founder and CEO of Car-Buy-Her, a consumer car education company based in Atlanta. "Look at your mileage and how well your car has been kept. All these things come into play when valuing your car."
Cleaning up your car can do wonders for its value, Glover says.
"Make sure your car is clean," Glover says. "A good detailing job might cost about $50, but it could increase your car's value by several hundred dollars."
A thorough cleaning may help you get the book value for the car, but don't expect to get more for your vehicle than it's worth.
"If the highest price for your vehicle online is $18,000, but you say, 'I think I want $20,000 for mine,' you're going to have a bad experience," Painter says.