Trading in your vehicle. What you need to know!

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Trading in your vehicle or selling it yourself?

Brought to you by your friends at James Hodge Motors in Paris TX, Jay Hodge Dodge Chrysler Jeep in Hugo OK and Jay Hodge Chevrolet in Sulphur Springs TX.

How it works

Looking to trade your current vehicle? You might think trading is a bad idea. The dealer is going to make money from your trade-in, and you do not want to be ripped off. With that thought, you might think that selling it yourself is the best way to go. There are several considerations to make, however, before you decide to trade-in, including the best way to go if you owe money or have a lien on your current vehicle. Here is our guide to help you out!

How the dealership determines the value of your trade

There are several factors that determine how much your trade-in vehicle is worth. For instance, condition, Carfax or Autocheck report, title condition, existing warranty, year, make, miles, features, and current market conditions are all key factors in determining how much your trade-in vehicle is worth. These factors can make the difference in the dealership being able to find a potential customer, as well as a lender who will loan money on that particular vehicle. If a dealership can take your vehicle and resell it with a reasonable amount of reconditioning, rather than send it to the auction or sell it to a wholesale dealer, they will tend to price your vehicle more favorably. Some dealers could give you different values for your trade, but in today’s car business, dealers have more data than ever before on exactly how much automobiles are selling for in multiple marketsas well as their own. Besides the obvious factors like the age of the vehicle, miles, or body style, the following tips can help you get the most for your vehicle.

Condition

Condition is major factor in determining the worth of a vehicle. If the vehicle is in need of major repairs and has dings, dents, faded paint or body damage or needs to have its tires replaced, this can be very costly to the dealer. It can often indicate neglect on the part of the owner. People usually think that dealers can fix anything for significantly less than ordinary consumers. That is not necessarily true. In order for dealerships to maintain the highest levels of customer satisfaction, repairs done by top-rated dealerships often require factory OEM parts and top-rate technicians.

Carfax or Autocheck Report

Carfax and Autocheck are two of the largest services that provide automotive history reports. Most accidents - and their claims and damages - that are reported to insurance companies are reported by them to vehicle history services like Carfax and Autocheck. Even if your vehicle has been repaired by a quality repair facility, accidents can deter buyers. A report that contains moderate to severe damage can make buyers turn and run the other way. Alsoa good tip to keep in mind after an accident is that you could possibly file a depreciation claim on your insurance for this very reason.

Title Condition

A branded title means a condition ‘stamped’ on the front of the title. Things like Rebuilt/ Salvage, Total Loss, and Lemon Law /Manufacturer Buyback can reduce vehicle’s value significantly. A loan recorded on a title is not necessarily a negative. Most dealers will pay off your lien or loan on a vehicle when you trade it in.

So How Do you increase the value of your trade-in?

Simply put, a dealership that trades for your vehicle is a buying customer. If you were selling your house, would you leave your junk and trash everywhere or show your house when the lawn has not been mowed in weeks? If you want top dollar, the answer is no! You do not have to have your vehicle professionally detailed to trade it in, however, cleanliness shows the dealership that you care for your vehicle. Addressing any repairs, aging or worn tires, or general maintenance could increase the value of your vehicleHaving an active service plan or warranty can also increase your trade value. An active warranty gives dealers the re- assurance that major repairs could be covered under warranty. Also, a customer who has a warranty on their vehicle tends to address necessary repairs and maintenance.

OK, so what if you still owe money on your vehicle or have a lien?

Most people have a loan on their vehicle. Dealerships are usually knowledgeable when it comes to liens and loans on vehicles. When trading your vehiclea dealership should give you an offer on your trade and factor in your payoff as well. In order to have accurate numbers, it is important to contact your lenderor let the dealership contact your lender on your behalf, in order to get an accurate payoff. A ten-day payoff’ means a payoff amount that is good for 10 days. Because amounts on what you owe can vary daily, depending on interest, fees, and future scheduled payments, this gives the dealership enough time to process a transaction and send the correct funding to the bank or lending institution. We are more than happy to help you with this, or, should you wish, take care of the whole process.

What if I owe more than my trade value?

This is a fairly common issue too. Simple mathif you owe $10,000 on your vehicle loan and the dealership offers you $8,000, you have $2000 in negative equity on your vehicle. You can either pay that difference, or you could possibly add that on to your loan of your new vehicle, if your credit and lender will allow. If you owed $8,000 and the dealership offers you $10,000 on your trade, you have an extra $2000 you could get back or apply that to the deal as a down payment.

Sell my car myself or trade-in?

This is a question many people have. First, you need to consider what a car dealership does and why they are usually very successful at selling vehicles. Car dealerships are experts and professionals! Selling vehicles is what they do every day. They know how to get used vehicles in tip-top shape and how to market those vehicles to potential buyers. They have financing solutions for all credit situations, they have title clerks who handle title transfers, and they have many employees whose job it is to sell cars. Soin order to sell your vehicle on your own rather than trading it with a dealer, you need to be somewhat knowledgeable about the processes in order to complete a sale.

If you work a 9-5 job, can you be available for someone to look at your vehicleWhat if they want to take it to their mechanic or show a family member or friend? Who’s insurance covers that? If they are financing the vehicle with their bank, do you have the title or know how to record a lien for proof of registration? Not to mention, do you know how to price your vehicle in order to sell it in a reasonable amount of time?

Car dealers pay big money for tools that are necessary to obtain the latest data and price analysis in the car business. Some of this data can be available to you through sources such as Kelley Blue Book, Carfax pricing tools, and NADA guide books. However, these are only ‘guides’. In some instancesselling your vehicle yourself could be a good option, but you must consider that it might not be as easy as it sounds. Simply putting your vehicle on Craigslist and seeing a rush of qualified buyers willing to meet you when you get off work is not the way it works.

Advantages to trading your vehicle with a dealership

  1. 1)  Quick, easy and convenient.

  2. 2)  You get the whole process done in one transaction.

  3. 3)  Since you only pay the difference on value on a purchase, you could save quite a bit

of money in sales tax when you trade-in your vehicle.
4) You do not have to deal 
with or take any hassle from potential buyers.

Disadvantages of Trading in your vehicle

1) You could get more money selling your vehicle because dealers expect to make a profit on your trade.

2) Sometimes it takes time to find a qualified buyer. Buyers walking up with a wad of cash or a pre-approved letter from their bank, are few and far between. Be prepared to show your vehicle to multiple people before completing a transaction.

3) You may not know what you are doing. Re-assigning a title or not having the necessary paperwork to process in a title transfer can make it very frustrating for both you and the buyer. You might save yourself several trips to the tag office.

With all that being said, James Hodge Dodge Chrysler Jeep, Jay Hodge Chevrolet, and Jay Hodge Dodge are more than happy to assist you in a car buying transaction. Car dealers are not the enemy! Yes, car dealers are in business to make money. They also have, in most cases, several million dollars in inventory, great facilities, and employ a large number of people. Look for dealerships who are highly rated for customer satisfaction. You might find that your car buying experience and perception of dealerships in general could change!

By - Montgomery Moore Marketing Manager James Hodge Motors, Jay Hodge Dodge Jay Hodge Chevrolet


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