How do I know when is a good time to trade my vehicle? And what should I know going in?

How do I know when is a good time to trade my vehicle?  And what should I know going in?

Whether you have hit a point in your life when you need a new vehicle or if you just want one, you will most likely need to first sell your current vehicle.  This can be done in one of two ways:  you can sell the vehicle yourself or you can trade it to a dealership.  While you may get slightly more for your vehicle if you sell it yourself, it may not be as convenient.  You will have to take the time and effort to list it, meet with potential buyers, and deal with the actual transaction of funds.  Also, keep in mind that potential buyers will most likely also have a trade making the process more difficult.  On the other hand, if you select to trade your vehicle to a dealership, the amount of money you receive may be slightly less.  A dealer has to pay for reconditioning on your vehicle and still make a profit when selling it to someone else which will ultimately effect how much money you will receive.  However, when trading a vehicle and purchasing a new one from a dealership, you will get a tax break because you only pay taxes on the difference between the value of your trade and the cost of the new vehicle. (Click here to learn more about the tax effect.)

Whichever decision you make, there are a few things you should know before selling.

1.  Sell before your car hits the next 10,000 mile increment.  If you are considering entering the market and you are currently at 29,000 miles, now is the time!  A vehicle with 29,000, not 30,000 is more appealing to other buyers and therefore more appealing to the dealership as well.  The less mileage, the less wear and tear a vehicle has.  

2.  Know what your vehicle is worth.  Before you list your vehicle online or set up an appointment at a dealership, you need to know how much money you should expect.  Websites like Kelly Blue Book and National Automobile Dealers Association's Appraisal Guides (NADA) can help you with this.  You will need to enter the Year, Make and Model of your vehicle as well as how many miles the odometer reads.  Keep in mind, you will need to be honest with yourself about the true condition of your vehicle. While the car has sentimental value to you, the next person may not appreciate the story of how that dent in your fender was from when you hit Luke Bryan's tour bus but then got to meet him.  Also make sure you are looking at the Wholesale or Trade-In value if you are planning on taking it to a dealership and not the Retail Value. 

3.  Add some curb appeal!  You'll want to make sure your car is being seen in the best possible light to a potential buyer.  This means, you'll want to make sure you have cleaned and vacuumed your vehicle before taking it to the dealership.  While it is not necessary to get it professionally detailed, you won't want yesterday's fast food garbage cluttering the floor.  You also may want to consider getting minor repairs or maintenance that are highly visible.  However, you'll want to make sure that whatever you do to the vehicle will raise your vehicle's value above what your cost was.  While new tires on a vehicle are an obvious plus, tires are expensive and you may not be able to recoup the cost.

4.  Make sure to point out any unique features to your salesperson or potential buyer.  If you had a custom stereo put in or got a chrome package, you'll want to make sure they are aware as this could add value to your vehicle.  If they don't know it exists, it isn't worth more.  Also make sure to be aware of any flaws that exist.  While there is no need to point them out, knowing where the dents and scratches are and how much it would cost to fix them will help you get the most accurate value.

5.  Play the demand!  If you own a very seasonal vehicle such as a Mustang Convertible or a Plow Truck, trade or sell when there is the greatest demand.  No one is thinking about snow when it is 80 degrees outside or vice versa.  If you are hoping to get the greatest value out of your vehicle, sell when people are getting ready to buy that particular vehicle; i.e. a Mustang Convertible in the Spring.

Some people find that trading or selling their current vehicle can be the most frustrating time of purchasing.  Hopefully these 5 tips will help make your process easier.  If you have any questions about trading or would simply like to sell your vehicle, don't hesitate to contact us as we are always happy to help!  Feel free to contact our Pre-Owned Vehicle Manager, Mike Mikesh at 319-988-4153 or mikemikesh@billcolwellford.com.