When you trade in a car on another one go to the dealership prepared. The amount of money you get out of your old car depends on it. Before you start negotiations on a new car go online and find out what the trade-in value of your current car is. Make, model, and year is the information normally required to get the numbers. Keep in mind that most states charge sales tax on the new car price, minus the trade-in credit, so the better price you get for your car the less sales tax you will pay.
Trade-in value is what the car lot should offer you and the suggested retail price reflects the amount of money the dealer expects to get for your old car. These amounts are rough estimates because the exact dollar amount depends on mileage and the condition of your vehicle. Some web sites allow you to enter additional detailed information, such as mileage, assessment and accessories to get an even closer estimate. There are five major factors when you buy a new car while trading in a car on the purchase.
The price of the new car, the trade-in offer on your old car, the amount of the monthly payment, the amount of the down payment and the interest rate are the main negotiating points. Obtain a copy of your credit report so you will know what kind of interest rates to expect. You should negotiate each financial aspect of the transaction separately. The salesperson does not need to know yet that you are trading your old car in.
Negotiating separately takes away the salespersons advantage of sitting behind a computer calculating too many numbers for you to keep track of. To get the best deal expect offers and counter offers on dollar amounts, but settle the price of the new car first to establish a starting point. Now negotiate the dollar amount of the trade-in. You have done your homework, so refuse a ridiculously low offer. There are thousands of car lots eager to do business with you.
The next step is the down payment. The amount of trade-in allowed on your old car should go toward the down payment. Twenty percent is the customary amount to pat for a down payment. It is now time to discuss interest rates and since you got your credit report, you already know what to expect. If the financer is too high on interest rates, move on to another car lot or obtain your own financing. After you have reached an agreement, discuss the amount of a monthly payment and the time length of the loan.
Finance a vehicle for the shortest amount of time possible because it decreases the amount of money you will pay in interest. However, never agree to a monthly payment that you feel you may not be able to make. While short-term notes save money on interest, you have to be able to make the payment. You have the option of paying more than the terms require, thereby paying the note off early. This is a better option than committing to a higher payment that may end in default.
Similar to trading in a car, another option is to sell it to a cash for cars company. The main difference between the two is cash for cars requires no purchase of another vehicle. Even if you plan to buy another car, you can make a cash down payment. This omits one aspect of the transaction, which makes it a simpler process. Cash has the same value to both the seller and the buyer.