How do Trade In's work?

[bozo88]

Was wondering if anyone knew how trade ins work on a car your currently financing?

 

[jasonandre]

It's pretty simple actually. When you go to the dealer to negotiate the price on a new car, the dealer will inspect your trade-in and give you the price he's willing to pay you for it. If you still have a loan on that trade-in, then the dealer will pay it off for you and do all the paperwork.
If you owe more money than your trade-in is worth (called Negative Equity), then you either have to have a cash payment to cover it or the dealer MIGHT roll over the negative equity into the new car loan. I say MIGHT because there is only so much money that can be rolled over into a new loan, although I don't know how much exactly.
Do your homework first and see how much your trade-in is worth over at KBB.com or NADA.com

 

[Dragos]

I think it is easy to look at each maneuver separately. Whoever takes your trade in will give you an amount of money for it, then you have to settle the financing that you owe, hopefully you owe less than you get. The trade in amount will taken from the pre-tax amount. Best ask all involved parts before proceeding, especially the financing of the car.

 

[webby]

the lender on the loan can give you the payoff amount. It changes daily based on interest, so the best bet is to call the bank/honda financial (whoever has the loan), and see what your total payoff is. Then you'll at least know where you stand. Then you can see what a dealer will give you for it etc.

 

[Josephdantonio]

It's more work on your end but you will make out way better if you sell your car independently usually a dealer will low ball you. You must make sure you know what your car is worth minus upgrades because they give a &&&& less about that

 

[webby]

^true

 

[Dragos]

I used an online calculator on a smart phone, there are a lot of them where you put in the trade in value, down payment, msrp claimed, term and interest and calculates the total amount, total interest payed and monthly payment. This way it is easy to keep up with what sales person is offering. Do a reasonable price precalculation before you go to the dealer so you know what monthly amount corresponds to what and in what conditions. They may not be too happy to see you do that but they also see you are prepared so they actually cut you a reasonable deal.

Lots of good free ones for android phones, or at least websites can always be used regardless of the phone.

For Canada there are websites where people say how much they payed for a car and how much each dealer gives a discount on average. http://www.thecarmagazine.com/ is one example. And of course we have the thread right here with how much people payed for their Civic.

 

[scottwhi1]

It's more work on your end but you will make out way better if you sell your car independently usually a dealer will low ball you. You must make sure you know what your car is worth minus upgrades because they give a &&&& less about that

The downside to selling private when buying a car is you don't get your tax difference in the purchase .
All you have to do is low ball the dealer back. Or find a new car lot to deal with.

 

[Scione]

The downside to selling private when buying a car is you don't get your tax difference in the purchase .
All you have to do is low ball the dealer back. Or find a new car lot to deal with.

Very true. Didn't think about that. My tax was so low when I traded in.

 

[ADExternal]

I look at it as two ways to negotiate yourself a better deal. Lower their end, increase yours.