Factors That Can Affect Used Car Trade-In Value
Your used car trade-in value depends on several elements, from mileage to condition. Discover how car value can decrease and how to keep yours high.
"What will you give me for my car?" That's an important question to determine the used car trade-in value, which often serves as a down payment on a new car. Getting more for your trade-in can mean you'll have less to finance, which can save you money over the length of your loan.
Here are a few factors that go into determining used car trade-in value.
The Age of Your Trade-In
With some exceptions, cars tend to lose their value rapidly. They can drop by 20-30% in the first year and 60% or more of the original price after five years. The curve flattens out from there, but until and unless your car becomes a collectible or a classic, the value continues to go down. In many cases, the demand for your vehicle on the used car market also decreases. Newer trade-ins typically bring higher prices and bigger profits for the dealer.
The Mileage on Your Trade-In
Low mileage can tip the balance in favor of an older trade-in. According to the U.S. Department of Transportation, the average miles driven in the United States is roughly 13,500 a year. Anything under the average is a selling point for the dealer looking to make a profit reselling your trade. A 10 year-old car with 67,500 miles on it (half the national average) could be more attractive to potential buyers than one with 135,000 miles or more.
The Overall Condition of Your Trade-In
Regardless of age or mileage, condition plays a huge part in used car trade-in value. Dealers may not look at scratches, dents, stained interiors, cracked windshields, and mechanical issues and think "stuff happens." They look at what it will cost them to repair or replace the things necessary for the car to sell at a strong price. Additionally, they'll deduct that from what otherwise could have been a decent offer for your trade-in.
The History of Your Car's Maintenance
Even if your car is in excellent condition, one way you can improve your chances for the highest trade-in value is to have it maintained according to the manufacturer's schedule in your owners' manual and keep the paperwork from every one of those visits. Bring those with you at trade-in time. Being able to document that you've provided the tender loving care your car deserves does count.
In addition, some dealers love to see that all that maintenance was done in their service department. It's one more thing they can use to sell a prospective buyer on your trade, and it establishes you as a potentially loyal customer in the future.
The Equipment in Your Car
The standard and optional equipment that came with your car can increase the money you're likely to get for it in trade. The most valuable is an automatic transmission. The number of people who can drive a stick shift has been declining for years. So, if your car has one, it could be worth hundreds of dollars less to a dealer than the same car with an automatic. Sure, there might be someone who'd love to have that car with a manual transmission, but there are simply more potential customers for automatics, improving the dealer's odds of selling your trade for a solid profit.
Other pluses at trade-in time are upgraded factory audio systems, automatic climate control, power seats, upgraded upholstery, and sunroofs. In colder climates, all-wheel drive, heated seats, and steering wheels can also .
Current Demand Dictates the Deal
Beyond equipment, there are other factors that can vary. An attractive, somewhat neutral paint color can appeal to a larger number of used car customers. A model that sold poorly or a make that's gone out of business could be at a disadvantage. Likewise, demand for convertibles is likely to be much stronger in the Sunbelt than the Snowbelt. Also, cars with good gas mileage can be worth more in regions with higher fuel prices.
Make a Good Impression at Trade-In Time
Before you head down to the dealership, clean the car. At minimum, vacuum it out, remove your personal items and run it through a car wash. A full detailing of the exterior, interior and engine bay might be an even better idea. It conveys a well-cared for car and could easily pay for itself in trade-in value.
Ultimately, getting the best used car trade-in value is a process that should begin when you buy that car. Look for one with historically strong resale value in a popular color with popular equipment. Keep the mileage below average if you can. Stick to the manufacturer's recommended maintenance schedules, keep the receipts, and fix anything that breaks right away. Finally, monitor your car's value. Wait for the right moment when you have enough equity in your old car to make a difference in the negotiation for your new one.