There are times when shopping for a bigger, better or more fuel-efficient car makes a lot of sense. But first, you’ll need to decide if you want to sell your current vehicle or trade it in at the dealership — the latter is generally much easier and cost-efficient, especially if you have an outstanding loan on the vehicle.
Still, trading in your car can come with its own set of challenges. To overcome these challenges, research trade-in values, fix mechanical issues and complete other steps to up your car’s value before visiting the dealership to ensure you get top dollar for your car.
6 ways to boost car trade-in value
Before taking your car to the dealership, take a few steps to ensure you get the best deal.
1. Do your homework
Conduct research to find your vehicle’s current trade-in value. You can use sources like Kelley Blue Book and Edmunds to get the current sale value, though you should also be honest with yourself about repairs and the condition of your vehicle. Also, keep in mind that you’ll get less for your trade-in than you would if you sold your car on your own.
“Many people think they are going to get the top value, but dealers taking in the trade need a margin of profit and will offer you less than the trade-in price listed on these sites,” says auto expert Lauren Fix.
2. Take care of known mechanical problems
The mechanical and physical condition of your car are big drivers of value. So, it’s best to resolve any issues you are aware of that are relatively simple to fix.
If, for example, the check engine light is on, the dealership is going to offer a lower price. Simple fixes especially should be made to prevent you from losing out on value.
You should also check the manufacturer’s website to determine whether there have been any recalls. Recalled parts can be fixed free of charge, and while it requires a bit of extra effort on your part, it will up how much you can receive.
3. Shop around for trade-in value
Zach Shefska of Your Auto Advocate says that it’s important to “shop around” for trade-in potential while you shop for a new (or new-to-you) car. “Get as many competitive quotes for your trade-in as possible before engaging with the dealer,” he says.
For example, you should get a quote from Carvana, CarMax and any other major used car dealers in your area before discussing your trade-in with the dealer you are going to buy from. Both will offer you a price for your current vehicle, even if you’re not looking to purchase another vehicle. You can use this figure as a baseline for your car’s trade-in value and in conjunction with other research you do on pricing.
4. Negotiate trade-in value separately
By negotiating your trade-in and purchase separately, you can make sure that you are getting the best trade-in value possible — or at least what your car is worth — and the best price on the new vehicle you’re buying.
Shefska also recommends that buyers watch out for dealerships that will try to combine the two transactions into one deal. They do this because there are more opportunities to generate profits as a dealer if you’re working two transactions at once.
5. Make sure that your car looks its best
Fix points out that a clean and well-maintained car is most likely to get the highest trade-in value. “Clean the vehicle inside and out,” she says. “Detailing the car is like staging a home for resale.”
Meanwhile, you should check to see if you have receipts for repairs and maintenance. These can prove to the dealer or buyer that you took care of the vehicle.
6. Time your trade-in
Trading in your car may work better some times of the year than others, depending on the year, make and model of your vehicle. Weather conditions and other factors could also play a role in the offer you receive.
Financial advisor Matthew Kircher of Fairpoint Wealth Management in Cleveland, Ohio, says that he recently timed his trade-in value based on demand.
Ultimately, he purchased a new 2021 Toyota 4Runner and traded in his old Ford Escape in January of 2021. He was strategic about timing because he knew that all-wheel-drive SUVs would be in high demand during winter and right before the spring college semester.
“We waited until the perfect time to trade in our used vehicle to boost its value,” Kircher says. “We also timed it perfectly, with the best offers for new vehicles coinciding at the same time.”
Trading in your car could be a smart move. However, it may not be the right choice, and you may want to postpone your next car purchase or sell it on your own to earn a higher price, particularly if you owe more than your car is worth. But if you trade it in, the negative equity doesn’t just disappear and is likely to roll into the subsequent car loan.
The Federal Trade Commission (FTC) cautions against using a dealership that promises to “pay off your loan no matter how much you owe.” While a dealership might do what it says and pay off your old loan, it’s going to have to make up the difference somewhere — and that “somewhere” will eventually catch up with you.
“Dealers may include the negative equity in consumers’ new car loan,” writes the FTC. “That would increase their monthly payments by adding principal and interest.”
The bottom line
You may not care about your old car at all but ensuring that you get the best trade-in value can help you get a lower price and monthly payment on the new (or newer) vehicle of your choice. So, it’s well worth it to do your research, make much-needed repairs, spruce up your ride and secure multiple quotes.
In the meantime, shop around and compare auto loans. A dealership you’re working with might offer in-house financing, but that doesn’t mean it’s the best deal. In some cases, you can get prequalified for an auto loan online with far better terms and use the loan offer as leverage when negotiating a deal on your next car purchase.