Thanks to supply chain hiccups like the chip shortage, new car shortages are expected to continue at least through the end of the year. That, in turn, has fueled a run on used cars. Analysts expect the resulting high valuations for used cars to last just as long, making this the kind of seller’s market we haven’t seen in recent memory.
But a hot market doesn’t share its heat with all sellers equally. If you decide to trade in your used car for something on a dealer lot, there are a number of things you can to do to maximize the value of your trade in. The Internet is full of advice on the topic, some of it contradictory. We spoke to a couple of dealer representatives to find out what really matters and why. Their advice:
Thoroughly Clean the Car
This is near-unanimous advice, with the rare outlier suggesting a clean car is a red flag. Go with the majority. “Most people are shocked at the variance in used vehicle values based on cosmetic condition, ” Charlie Watson, marketing director at Mark Williams Auto Group in Beechmont, Ohio, said.
An olfactory cleaning counts as well, because odors can be a huge issue. Thad Marck, a sales consultant at Mercedes-Benz of Cincinnati, said, “Smoking kills the value of a car. Literally kills it. You just can’t sell a smoked-in car except to another smoker, and there just aren’t that many of them.” But even the lingering scent of stale food, like leftovers that have a habit of living in the back seat on hot summer days, can dent the value of a trade-in.
General Maintenance
Again, the nearly unanimous advice is to fix the vehicle before trading it in, and again, you should run with the mob on this one. Get all Check Engine lights addressed, as well as outstanding recalls. If you’ve slacked off on regular maintenance, have a reputable shop go over the car.
Unlike in a private party transaction, receipts won’t do that much to help your case. “Chances are a manager will never read them, and we have to shred them right away,” Watson said. That’s because receipts contain personal information the dealership cannot hold onto and can’t show to a future customer. Carfax keeps track of maintenance done at many repair shops, so the dealer will need to rely on that when dealing with the potential buyers of your car.
Some sites advise against replacing tires, but that depends on the state of the rubber on the vehicle. If you have four matching tires with some evenly worn tread left, don’t worry about them. If you have a mismatched quartet of rubber and one tire shows severe cupping, you’ll want to replace the tires and fix the suspension issue. Not only will those issues be notice, but they’ll raise questions about maintenance and deeper problems that can impact the valuation.
Do the minor fixes like paint blemishes and windshield cracks. However, don’t worry about replacing the floor mats, another popular piece of advice. Both dealer reps we contacted said that won’t make any difference. “We replace the floor mats anyway,” Marck said.
Be honest, which means avoiding advice to trade the car in at night in order to hide vehicle flaws. “Truthfulness makes an impact,” Marck said. “If it’s been wrecked and they don’t tell you, it just makes for a difficult process and you lose trust in what the car’s going to be.”
If you’re not trading in just yet but plan to, go easy on the car. “Be mindful of unnecessary wear from things like slamming your door,” Watson said. “As petty as that may seem, it can cause internal components to break or rattle.”
Know What Your Car is Worth
Check the various car valuation sites like Black Book, the NADA guide, and Edmunds. “Don’t take them as fact, but it’s a good point of reference,” Watson said. Marck said that his dealership doesn’t sell Hondas, but if someone wants to trade one in, the dealership uploads photos of the Honda to a virtual auction service called Appraisal Lane, where Honda dealers can bid on it. “And they’re paying cash for the car,” he said, “so that’s what it’s worth at the wholesale level.”
Carvana and CarMax will make guaranteed online offers, and CarMax will give your car a more thorough appraisal if you go to a brick-and-mortar location.
With so much volatility in the market right now, the most up-to-date values will come from car sales sites like AutoTrader and CarGurus. Look up your vehicle and trim to find out what dealers will try to sell a similar car for. That will provide the best idea of what you can expect for trade-in value, minus costs like reconditioning and, naturally, profit. Assuming you don’t owe more on the vehicle than it’s worth, such knowledge will also keep you from being lowballed.
Negotiate the Trade-in Value Separately from the New Car
Come to an agreement on the value of your trade-in and keep that distinct from negotiating on a new car. Don’t let the salesperson combine the trade-in and the new car as “a package deal.” You can handle either transaction first, but get the first number in writing, then move to the second number.
Check to see if you live in a state that only demands sales tax on the difference between the trade-in value and the new car value. If so, that’s more money saved.
Ultimately, you’re dealing with the person across from you, and that salesperson is trying to imagine what a random customer will think when viewing your car. So the obvious items, like curb appeal, that matter to you will matter to the next buyer.
“There are no top-secret strategies to a high trade value,” Watson said. “If you maintain it and keep it clean, chances are you’ll earn a much higher return when it’s time to trade.”
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