To Trade or Not to Trade?
Things to think about before trading in your vehicle
Whether you've had a car for two years or 10, deciding if you should trade it in can get tricky. Perhaps you're looking for something more fuel-efficient, more spacious or just newer - regardless, there are a few things to consider before making a swap.
Should You Repair Your Vehicle Before Bringing It in to Trade?
Many people decide to purchase a new vehicle when their current one is costing them hundreds or thousands of dollars in frequent repairs. But if your car has a problem when it comes time to make a trade, think twice before taking it to the shop. According to Galves.com, "Dealers are in 'the business' and, therefore, have the ability to make mechanical or cosmetic repairs more reasonably than a consumer...There is little chance you would recoup the cost of last minute repairs, so you are much better off letting the dealer be responsible for them." But consider, for example, an otherwise well-kept, in-demand car with a bad transmission. The expense required to fix it can be outweighed by the equity in that car if it's in otherwise top condition. Shop the car to several dealers, indicating the repairs needed, and get a quote to determine how much the repair would cost.
Do You Know What Your Current Vehicle Is Worth?
Start with resources like Kelley Blue Book and search for your vehicle by year, make, model, features and condition, but you won't know for sure what your vehicle is worth until you've been given offers by several dealers. Published sources typically don't take market volatility into consideration, and the used vehicle market has been hotter than ever the last few years.
Also try browsing online or searching newspaper classifieds to see what similar vehicles are going for in your area. Last, visit a few different dealerships and compare appraisals.
Will a More Fuel-efficient Car Really Save You More Money?
If you're thinking of trading in your current vehicle for something more fuel-efficient, particularly a hybrid or electric vehicle, you should crunch the numbers before making any moves. The experts at Edmunds.com point out that although eco-friendly vehicles like hybrids may cost you less in gas and come with federal and state tax benefits, you may still end up paying more in the long run. They estimate that hybrid cars (not counting Lexus models) cost roughly $1,700 to $11,200 more than comparably equipped gasoline vehicles. Therefore, if you're trying to save money, make sure the low fuel costs really outweigh all other costs.
Figuring out all the pros and cons of trading in your vehicle will help you better understand whether it's the right decision at the right time. If you have any concerns about financing a new or used car, give us a call and we'll answer all your questions.