Common Used Car Trade In Mistakes
Sometimes we all need a change. It doesn’t matter if it’s clothes, food, places we go, girlfriends, boyfriends or a used car it’s refreshing to switch it up every once in awhile. When it’s time to trade in a car to either upgrade or downgrade there are lots of variables involved. No big life purchase loses it’s value so quickly and drastically as a car. This doesn’t stop anyone from taking the plunge. Cars, trucks and SUVs fill a lot of different personal leads whether it’s to get to and from work or impress people. They are a way for you to make more money faster so most people don’t mind losing a little money on it. The disconnect comes when a customer has one idea of how much they should get for it and what the market will give them for it.
Often times a loan is for 36 months or more. If you have solid credit it is not uncommon to finance for 48 months or 60 months. 4-5 years is a long time for a car to lose it’s value. The truth is that a car’s value, just like everything else, depends on the market. Markets can shift and change for all sorts of different reasons. About 10-12 years ago when gas prices were going through the roof someone paid $10,000 for a Geo Metro that got 40MPG! That car wasn’t even worth a $1,000.
A car’s value can also change if it’s discontinued or if it becomes some sort of collectors item. More often than not a cars price will go down and there is nothing anyone can do about it, even a used car dealership. There are some ways we can limit the overall loss of the car. There are also ways to approach the situation and ways you shouldn’t.
Mechanical repairs: Everyone should keep up with all the basic maintenance on their cars. Rarely does a car break down and fall under the category of a lemon. 99% of the time it’s because of either regular wear and tear or previous owner neglect. If you keep up with your basic maintenance then you will avoid all the major expensive problems. There is no other surefire way to ruin an engine other than if you don’t change the oil and filter. Rotate your tires, put air in them and keep your gas tank full combined with a regular tune up will keep your car healthy and the trade value a little higher.
Keep in mind that when you take your car to a dealership that they can fix just about anything you can, but less expensively. So while you shouldn’t take in a piece of junk the car doesn’t have to be perfect. If the windshield is cracked or tires are slightly worn don’t worry. The trade off of changing them probably isn’t worth it. No used car dealer will turn your trade in away for little things like that. Of course if you have to tow the car that may raise some red flags.
Lying about trade offers: Some people will lie about a previous offer they received. Often times they will tell the dealer that another dealer offered them more money. Well, if that’s the case why did you leave the other place? Trading a car in isn’t an auction where you trade it to the highest bidder. Used car dealers are up with all of the market trends. The price isn’t going to vary much from dealership to dealership. It might be worth it to go from dealership to dealership for your own personal reasons. This will give you an idea of what the market is going to offer you. Of course there will be a few bad apples who will low ball you. Try going to at least 3. If there’s a dealer way off the mark while the other 2 are similar you’ll have a good understanding of what it’s worth.
Also keep in mind that mechanical repairs are part of owning a car. That ultimately doesn’t change what the market value is on the car.
True value assessment: The biggest and most common discrepancy is what people think it’s worth and what it’s actually worth. People will often talk about how much they’ve paid and what they think they should get. Well what they paid for the car has a lot of stuff that has nothing to do with what it’s worth.
When you buy a new or used car most people have to take out a loan. When someone loans you something they will charge you interest. The interest you paid for the loan won’t factor into the trade value. Also, however much your car was you probably had to pay taxes as well as dealer handling. Most of the time people roll the taxes into their loan as well as the dealer handling. Therefore, you have to pay interest on that as well.
So if you have a loan for 10% interest for 4 years that adds up while the car value goes down. That’s something you’ll have to remember when you make the trade.