If you have been thinking about purchasing a new car, you may be wondering what to do with your older one. Dealerships love working with trade-ins because they are able to sell a car while getting another one to sell for profit.
If you are debating if you should trade in your car or sell it privately, here are some reasons why you should opt-in for a trade-in.
Selling your car yourself can take a lot of time. You may get 20+ calls, with only 5 people showing up to actually see the car, and then not even buy it. When you trade your car in, all you need to do is drive to your local dealership and have them give you a value for your car.
The dealer will then ask you to sign some paperwork and to hand over the vehicle title. Then you can use the credit from your trade-in towards financing a new car!
Almost all dealerships or lending companies will require that a buyer put a down payment on a car. Usually, the down payment will range from 10% or $1,000, whichever one is lower. When you provide a car as a trade-in towards a down payment, you will also reduce the cost of a new car.
Since the value of your old car will probably be more than $1,000, you can save big on interest when financing your new car, since you will have less overall payments to make at a lower amount.
In some states, there are tax benefits to trading in your car. In 42 of 50 states, you are obligated to only pay sales tax on the difference between the price of your new car and value of your trade-in car.
The biggest and most notable downside to all of this is that a dealer will not offer you top dollar for your car. If you were to sell your car yourself, there is a good chance you could pocket an extra $1,000 or even more.
Trade-ins do not get maximum value because the dealer is also taking on a risk by buying a used car. The car could sit on their lot for months while the dealership pays to clean it and keep it running until it sells.
Buying a new car is a fun and exciting time, but it can be hard to find the financing you need when you have less than perfect credit.
If you are in need of financing for your next car, CrediReady can help. Our nationwide network of trusted lenders and verified dealers work with buyers in all credit situations. If you haven’t already, take a moment to fill out our free no obligation loan inquiry form today and start shopping!