Trading in your car

September 20, 7:50 AMAlaska Transportation ExaminerGeorge Angus

Previous Next

Comment Print Email RSS Subscribe

Subscribe

Get alerts when there is a new article from the Alaska Transportation Examiner. Read Examiner.com's terms of use.

Email Address   Include other special offers from Examiner.com Terms of Use

It's been a few years since you've experienced the euphoria of that new car smell.  Your permanent fund dividend is eating a hole in your pocket and your senses are assaulted at every turn by blaring, colorful ads proclaiming the best car deals of the year.  Who could blame you for wanting to trade in your old ride?

It's understandable.  Really.  But come back down to earth with me for a few moments.  I promise it will be worth your time.

Before you run right down to the dealership and trade in your car or truck, you need to ask yourself a few questions:

• Do I really need a new car?  If your situation has changed since your last purchase and now a 4WD or multi-passenger vehicle is needed, then that is fine.  If you're bored on a Sunday afternoon and you think you'll go to the car lot "just to look" then you are probably headed for trouble.
• What is the financial situation with the car I have?  Did you pay cash or make a large down payment when you bought the car you're in right now or are you in a "negative equity" situation?
• Am I prepared to take a large hit when I trade in this car?  it is extremely rare for a dealership to offer market value for your trade.  After all, they're going to try and sell your traded in car for a profit.
• Can I sell this car on my own?  If there is any way your situation would allow this, then do yourself a big favor and try to sell the car or truck on your own.  You will be in a much better position when you go to buy your new car.

After you have given these questions some thought, it is time to get yourself and your car ready for the trade.  You've got some homework to do.

The most important thing to do is to arm yourself with information.  Go to Kelly Blue Book and NADA and book out your car.  Don't be surprised if the values are different with each of these organizations.  Use them as guides only, and not as hard and fast figures for your vehicle's value.  When you are inputing the information be as accurate and as objective as possible.  For example, when rating the condition of your trade at Kelly, select "Good", not "Excellent".  Your car is not excellent.  Trust me on this.  Less than 5% of all vehicles fall into the excellent category.  Excellent is literally show room quality without a single mark or blemish.

It is absolutely important for you to have the book values in mind when you go to trade in.  This sends a message to the dealership that you are serious and you've done your research.  If you don't do this crucial step, you are asking for trouble.  Often times the Sales Manager will offer you a lower than value price for your trade.  In the business, this is know as a "UA" or Under Allowance.  When your trade is UA'd, the difference between the value and what they have given you is pure profit and part of the salesperson's commission.  If you are not paying attention, a dealership will "UA" you all day long.

Put the best face on your trade.  A lot of folks will say this doesn't matter, but it actually can make a difference in your negotiating power.  So clean it up, clean it out, get maintenance records together and fix whatever little things you can.

 Taking a little time to do research and to clean up your car can translate into more dollars for your trade.  In the end, it is to your advantage to do your homework.