This is the second part of THIS article.
The trade-in reality
The real reason you are selling your car is money. The dealer is infinitely easier but the dealer will not give you as much as you can get selling your car. Some may argue with this by citing a sweet deal they got and the huge amount they received for their trade-in. Take this with a grain of salt and chalk it up to how car deals are done. If your car is actually worth ~$7,000 a dealer isn’t paying you $10,000 for your trade, just know that they are making that money up somewhere else in the deal. That’s not a bad thing, it’s simply the reality of car sales. If you want to know what a dealer will actually give you for your car take it to CARMAX and they will give you an offer on the spot. It will not be convoluted by incentives and rebates on your new car purchase. It will, however, be significantly lower than you expected. Most car dealers will sell your car at auction, meaning they will get, at best, slightly below market value for your vehicle. That means a dealer, who is trying to make money, will not intentionally overpay for your trade-in. There are some exceptions to this. If you own a vehicle that your dealer finds highly desirable (like a late model Tacoma with low miles at a Toyota dealership) they may be willing to pay more because they will sell your vehicle at retail price. Or, if you are trading a rare car then you can hope for an above average trade-in value. Unfortunately, most people don’t have a vehicle like that… and before you start thinking that your 2003 Kia Rio with a cool 210,000 miles is highly desirable or rare, it’s NOT.
So, you decided to maximize your money by selling it yourself, congrats. But you need to understand how much your car/truck/van is worth. Start by going to KBB.com and NADA.com and input your vehicle’s details to see what its worth. This will be a good estimate as most everyone that wants to buy your car will also look at these websites. In fact, most will look at both of these sites and expect you to accept under the lowest of the two. Your 2003 fully loaded Kia Rio wagon can differ by as much as $500 depending on which condition or website you choose.
Determining Real Value
Based on your market research you need to determine the lowest price you will accept in a deal. This number needs to be based in reality. Understand that other people are not emotionally connected to your vehicle, so be realistic. There are things that add to your vehicle’s value. These things include factory add-ons, professional upgrades, and essential components. If your Tundra has a TRD dealer installed supercharger, professionally installed exhaust, or a brand new set of off road tires, these increase the value. One thing to remember on these, you will never recoup 100% of your cost for these things. You did them to enjoy them and that is where the majority of value is in these type things. Some things MAY add value, depending on who buys your vehicle. These things include stereo upgrades, performance upgrades, and appearance upgrades. A 22 year old guy might pay extra for Mazda 3 with an aftermarket stereo, with a performance muffler, and nice rims. But a 45 year old looking for a commuter car will probably not be impressed with those things. Some things will NOT add value, and may even detract from the value. Those include modifications that are poorly done, make the car less practical, or more complex mechanically. Ground effects on your honda civic may look cool (questionable) but it makes going over speed bumps a chore. Your homemade speakbox attached to the car with wood screws kill the value. So, take every modification and upgrade into account when assessing value. Based on all of these things set your absolute bottom price you will accept. Make sure you are comfortable with it and then stick to it. If the lowest price you will take for your car is $4,500, stick to it, accept nothing less. It is easy to caught up in the process and accept the first offer you get for way less money. The last thing you want to be left holding is an insufficient amount of cash and lots of regret. If you don’t get the amount you believe the car is worth it may help you appreciate your car more and change your mind about selling it. Eventually, you can adjust this number, but don’t do it right away.