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How does a trade in work at a dealership?
Car Loan

2020-12-15
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When you head into the car dealership, your goal is to get the best deal possible. one way to do that is to have another car or vehicle that you plan to get rid of. You can then use that as a trade-in to help you get a better car for a lower purchase price. At Hartland Automotive Sales, we can help you do just that.

How does a trade in work when you still owe?

Trading in a car if you own on it doesn’t have a be a problem when you have some equity on it. In this case, the dealership will do the loan payoff for you and either give you the cash or allow you to use that money as the down payment on a new car. However, if you do not have equity in the car you want to trade in, you will need to pay off the rest of the loan on your own, even if you no longer have the vehicle.

How does a dealership determine trade in value?

Most dealerships will use one of two sources to figure out the value of a trade. But both will take a look at the type of car, the mileage, and the condition and compare it to the demand for that type of car in the first place. If the car is in good shape and there is high demand for it, you will get a higher trade in value.

Do car dealers make money on trade ins?

Depending on the type of car they get during the trade in, it is possible for a dealer to make a profit of thousands of dollars. They will keep you more focused on the purchase of a new vehicle rather than the trade so they can get a lower price on the trade in vehicle. They may even give you a wholesale value because they do not think you will negotiate. They will use different tricks to help you part with your old ride for less money. Being aware of these and cautious is your best course of action.

Should you tell a dealership you have a trade in?

In most situations, you should not tell the dealer you have a car you would like to trade in until you have already found the car you would like to purchase and you have an agreed on price for that vehicle. The reason for this is that most other dealers assume that you will trade a car during the deal so doing so only puts you at a disadvantage. Stay in control and come up with a good purchase price without the sale, and then bring up the trade in when you are done with that.

If you are considering trading in your vehicle for something new, then visit us at Hartland Automotive Sales. We are happy to help answer any questions you may have and can offer you the best price for any vehicle you have. Contact us today to get started.

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