You might be blinded by love. Not with the shiny new set of wheels that you’re contemplating buying - but with your trade in. I hate to say it, but when it comes to buying a new car, loving your old car may not be in your best interest, love just might let you down.
Case in point - a couple of weeks ago I had a couple who came in looking for a new car. After working with them for I while, I got a sense of their budget, desired payments, the usual stuff we try to understand. We test drove a car that was going to work for them - it seemed like things were going well. A couple of times Mrs. Customer remarked how she was going to miss her old car, and that she was going to hate getting rid of it.
Now Mrs. Customer said she had looked up her car’s value on line, she believed it was worth about $8,000 - but after going over it, my used car manager set its fair market value at $4000. I’m not questioning her honesty, but when I looked it up on line later the numbers I found matched my managers.
So why the discrepancy?
There are several factors that significantly impact the value of the car you are trying to get the dealership to buy, for the best price possible. In no particular order, they are; Age, Mileage, Condition, Equipment and Options, Supply and Demand, Tires and the History/Service Record.
Condition is the most obvious variable in your cars value. It’s cosmetic appeal has a significant impact on its value.
Often, like in any long term relationship, we tend to develop a kind of benevolent blindness and deafness. We stop seeing our partner’s flaws. With your car, you look at those little dings on your bumper often enough and you start to ignore them, same as with the chirping sound the glove box makes when you make a left turn. Those little flaws, like your high school sweetheart’s mispronouncing spaghetti, just add character, right? Actually, not so much. Consider this - how would you feel about a new car if, the first time you got a look at it, there were dents in the door, stains on the upholstery, McDonald's wrappers in the back, or a funky smell wafting out of the glove box. Remember that you’re wanting us to buy your car - the same way we want you to buy our car. If you don’t clean those things up you’re just making it easier for the Used Car appraiser to devalue your car, which will raise your payments and cost you money.
I wouldn’t worry about trying to fix any dents - just acknowledge that they are there and know that they’re going to affect your car’s value. At the very least though, vacuum the car out and clean the windows, consider cleaning the carpet and upholstery, and giving the dash a wipedown with Armor All too. Give the used car manager the opportunity to see your car in it’s best light - consider that you’re trying to talk him into buying your car, the same way a salesperson is working on you to get you to buy a new car.
Tires are another consideration - how much tread do you have left? Do the tires match? Let’s say your car is in good shape overall, except for its tires. If you have the means, check with a used tire store near you and see how much it will cost you to get a matched set that still have a good 50% of their tread left. I don’t know what the breakeven point will be - but especially on a nicer car that the lot will want to recondition and resell, this could have a positive impact on what you are offered.
Age and mileage are the other most obvious things that affect value. In addition to being indicators of wear and tear, the age of your car may mean that you have an older body style that’s no longer in fashion. Depreciation starts the minute you drive off the lot - and every mile you drive adds to it.
Conventional wisdom is that people average driving 12,000 to 15,000 miles per year. With that as a yardstick - it wouldn’t be unusual to see a 3 year old car with 36,000 to 45,000 miles. Less is, of course, more desirable. If you’re bringing in a 3 year old car that only has 18,000 miles on it, on average it will seem like it’s only been driven 6,000 miles a year - even though in reality you may have put 10,000 miles on it in the last 6 months, for all intents and purposes, it appears to be a lightly used car, and hence, more valuable.
If you have a car you think you’ll be trading in, and you’ve got long road-trip planned, consider renting a car for the trip, (it might also give you the chance to test drive one of the vehicles you’re considering buying.)
Equipment and Options, just like when you’re buying a new car - more options and equipment raise the value of your trade in.
This is one thing that you may want to consider when buying a new car - sure, a base model will give you lower payments, but added options now, especially things that are performance oriented, like All Wheel Drive, or towing capacity, could be a real advantage in a couple of years when you want to trade again for a newer car.
Supply and Demand - that is a little harder to figure out. How many cars are there out there that are similar to yours - when you check out car lots, do you see many of them there? As for demand, there are certain name brands that command more resale value. And there are styles or models that are popular - on our lot, used pickup trucks don’t last long, there’s always a market for them. Obviously there are also car fads - why did we stop making station wagons? Because people stopped buying them.
History and Service Record - Carfax and Autocheck are the two primary companies that track vehicles for accidents, and evidence of regular maintenance. If you are in an accident and it’s reported to your insurance company - even if all repairs were done and the car was restored to mint condition - they will know, and it will likely have an affect on the value of your trade in.
Make a habit of keeping all of your car maintenance evidence. If you do your own oil changes, instead of going somewhere that reports to Carfax or Autocheck, make sure you keep your receipts. Just so you can prove that you’ve taken good care of your vehicle.
So now let’s go back to the first customer I was talking about - all of the facts aside - the real problem is that my customer was still emotionally attached to her current car, and took the offer we made to her as lowballing, and left the car lot all in a snit because we insulted her beloved little car. She had, as many of us do, an emotional connection to her car, and because of that she wasn’t willing or able to see the vehicle in the harsh light of a commodity in a commercial exchange. (I really think she was looking for an excuse to not buy a new car - and trade in value just gave her the reason she wanted.)
So - three things - first, eliminate as many of the negatives that your appraisal may discover, and accept that they may find bumps, dings and scratches that tell the story of your adventure with your car, but ultimately lower it’s value. Wash and vacuum the car - and consider an air freshener too. And third - as much as you can, emotionally detach from your old car - after all, it’s not going to a junkyard to be turned into scrap metal, it’s going to a farm out in the country where it will have lots of room to run and play . . .
As for internet tools: