Back for more? Well it looks like there might be another thing I left out of the original “buy a new car guide” that I first gave you. If you haven’t read that one yet then you should go ahead and check it out because it has some good info. You can find it here.
In this part of the guide I’m going to talk about your possible car trade in when you’re buying a new car.
How to buy a new car and get the most out of your trade in vehicle
You’ve followed my guide and you’re ready to find that new car. I failed to mention the value of your trade in with my original guide so that’s what this section is for. This may seem counter intuitive, but what you really want to do when you’re dealing for a new car is to not even mention that you have a trade in vehicle.
When the dealer asks you if you have one just tell them “I don’t know right now” The reason for that is because you want to get the very best deal on your new car AND the best deal on your trade in. It’s important for you to separate these 2 things and do them separately. If you don’t then you might be getting the deal of the century on the new car, but that’s only because the dealer got you with your trade in. You can avoid this by making these 2 things completely separate.
What you want to do is go ahead with the dealing on your new car and find that great deal without mentioning that you have a vehicle you want to trade in. Then, once you have that deal locked in you can deal on the trade-in.
Now, it’s important to mention that when you do this you need to be aware of non-refundable deposits that you may need to put in to reserve a vehicle that you want to purchase. The last time I did this I had to put in a non refundable $500 deposit to secure a RAV4 that I wanted. This was a new vehicle that wasn’t even on the lot yet. According to a bunch of dealerships I spoke with this $500 deposit is standard practice for the dealerships when you’re making this type of transaction.
So, you don’t want to put in that $500 deposit before you figure out your 2nd part of the deal, which is the trade in. The reason for that is because another dealer may be able to match that same deal you got but give you more for your trade in. This would in turn lower the taxes you have to pay on your new car. Even if another dealer is giving you a deal that is $100 higher than this one it would still be beneficial for you to go with that price that is $100 more if that dealer is going to give you $200 more for your trade in. This would net you an extra $100 in savings.
So how do you get the best deal on your trade in?
First of all, we’re working with “out the door” numbers here when dealing with cars remember? That way you know exactly what your’e paying inclusive of all taxes. If you have a trade in you need to calculate the savings you will have when that lowers your taxes on the new car. Keep that in mind when you do your calculations. You might find that one dealer is more willing to deal with your trade in because they want your specific car to sell on their lot.
It could also be that you’re best bet is to not even trade in your car with the same dealer that you buy your new car. This type of scenario can be true in states like South Carolina which has a $300 max limit of taxes when you buy a new car regardless of the sales price. If this is the case for you then you might be better off taking your car to somewhere like CarMax.
In my experience with car dealerships CarMax will usually give you the best price for your trade in. One thing you should do is at least go to Carmax and have them make you an offer on your car. When you go there and have them check out your car they will give you a written offer that is valid for 1 week. The people at Carmax will tell you that this first offer will be the highest offer you’ll get for the car from them because the next time you come in the value of the car will have gone down. So don’t go into CarMax until you’re ready to make the deal.
What you can do is once you’ve got that email from the dealership for that great deal on your new car you can then immediately start looking for your trade in deal. You should first go to your next best price dealership and see what type of trade in they will give you on your car along with that new car deal you got from them.
Remember, at this point you’ve already done the dealing for your new car as if you weren’t going to do a trade in anything so you’ve already separated that deal from the trade in deal. Now that you know the deal price for the new car alone you can bring in the trade in deal. I would check what type of deal you can get with your number 2 and number 3 priced dealer at least. These are ranked number 2 and 3 for price on your new car deal. You’re going to wait on your’re number 1 car deal dealership because you want to have something to go with to come back and make them match or beat.
After you get your offers from the dealerships you should then go to CarMax and see what they offer you there. Now that you have all these offers you have something to work with when you go back to the best deal you got for your new car. It could turn out that they will match or beat the best trade in deal that you got from CarMax. Or it could be that they’ll match of beat the best combined deal you got for your new car and trade-in.
It’s also possible that it turns out that the best thing for you to do is to just buy the car alone at the dealership that had the best new car price and then trade in your car to somewhere else that had the best price for the trade in, like CarMax for example. You’ll have to do a little math to figure that out, especially if your trade in is going to save you money on taxes when you buy that new car. That math will be really easy though because you’re dealing for the all inclusive “out the door” price on the new car.
What i’ve found is if your car is newer, say 4, 5 years old or less, then you’re more likely to get a good offer from the dealership because they can more easily sell your used car. If you’re trading in a clunker then you’re going to have better luck with somewhere like CarMax.
Let’s not forget that if you’re willing to do a little more work you can also sell your old car to a private party using Craigslist or eBay. I’ve had lots of success selling my old cars with Craigslist and I always get more for my car selling it that way. It can be a hassle and some extra work, but it can also put more money in your pockets. If you do decide to sell your car with Craigslist you just have to be sure you do it safely and be smart with your listing. We can talk about your Craigslist selling strategy another time though.