You’ve driven the same car for a couple of years and might be eyeing a new one. You might still owe on your current car, so will have to navigate either a private sale or a trade in before you’re ready to buy the next car. Either way, you’ll want to be sure you get as much out of the deal as you can.
The first step is to know the value of your current vehicle. There are plenty of websites online where you can research this very topic like Cars.com. Based on your car’s make, model, mileage, trim package and vehicle history, you can find out the approximate value of the vehicle. Values tend to come in ranges. You’ll see a car value for vehicles in excellent condition, fair condition and poor condition. You might also see different values for cars sold to private parties and for cars sold to dealerships via trade in.
Once you have a handle on your car’s value, you should try a private sale first. Private sales always return more money on your investment than a trade in ever would. Private sale prices can be thousands of dollars more than any dealership would give you. If you’re successful selling your vehicle privately, pocket any extra cash beyond what you still owed on your vehicle, if anything, and use it toward a downpayment on your new purchase.
If you don’t have the time, patience, or inclination to try selling the vehicle privately, you can still get a decent deal negotiating a trade with a dealership. To do this, you’ll need to consider what the value of the car is and know exactly what you owe on it. Call your bank or lender and find out what the pay-off balance on your loan. You should consider this number to be the absolute lowest price you will take on trade. Do not, under any circumstances, let the dealership know how much you owe on your vehicle before you’re finished negotiating the trade in and purchase price of the new car. If you do, you are guaranteed to get only that amount and not a penny more, maybe even less. If you stay quiet and throw your own reasonable price for trade out, you might get a little but more than you own to offset the price of your new car.