Value Your Trade

 

If you want to upgrade your vehicle, you can sell it privately or trade it in at a dealership. If you choose a trade-in, the dealer will take your vehicle and offer you a certain amount of money toward purchasing one of its vehicles. This amount is your vehicle’s trade-in value. Understanding the trade-in process and your vehicle’s trade-in value can help you decide whether it’s the right option when you upgrade.

Why People Trade In Their Vehicles

Many people prefer trading in their vehicles because it’s convenient, quick, and easy. They can visit the dealership, find and test-drive a new car they love, get their vehicle appraised, and close the deal in one location during a free morning or afternoon. The dealership handles all the paperwork, including transferring titles and organizing any financing, for your peace of mind. Trading in a vehicle can also make managing funds easier, as you get the value from your existing vehicle on the spot to put toward your new purchase.

When you trade in your vehicle, you don’t have to stress about finding the right buyer. There’s no need to advertise, meet with prospective buyers, or worry about strangers taking your vehicle for a test drive. You also don’t need to spend time preparing your vehicle for sale, as most dealers can just deduct the cost of any repairs from your trade-in value.

Trading in your vehicle also reduces the sales tax you’ll pay. When you buy a new vehicle in Oklahoma City, you pay 3.25% in motor vehicle tax after a flat tax of $20 for the first $1,500 in value. For a $45,000 motor vehicle, that amounts to an additional $1,433.75. However, if you trade in a vehicle with a trade-in value of $20,000, you’ll only pay tax on the remaining $25,000 of your new car. That means you’ll pay just $783.75 in sales tax, saving you $650 that you might put toward gas or insurance bills.

Factors That Can Impact Your Trade-In Value

The dealership bases your vehicle’s trade-in value on its market value. This is the amount your vehicle is likely to sell for on the open market. Various factors related to your vehicle and the market can impact your vehicle’s trade-in value, including:

  • Its age: Newer vehicles typically have higher trade-in values than older ones.
  • Its condition: Dealerships will pay more for a vehicle that’s mechanically sound and free of scratches and rust than one in poorer condition.
  • Its mileage: Vehicles with low mileage typically have higher trade-in values than ones with high mileage, as they usually last longer and have fewer mechanical issues.
  • Its warranty status: Vehicles with warranties have higher trade-in values than vehicles without coverage.
  • Its equipment and packages: Extras such as off-road packages and optional safety equipment can make your vehicle more appealing and boost its trade-in value.
  • Its popularity: Very popular makes and models have higher trade-in values, as dealers know they can sell them quickly.
  • Its uniqueness: If a dealership has several vehicles similar to yours, it may offer you a smaller trade-in valuation than if you have a more unique car that may appeal to different customers.
  • The time of year: The trade-in values for some vehicles fluctuate through the year, such as convertibles, which tend to get higher trade-in prices during summer when people want to take advantage of the sunshine.
  • Market conditions: Dealerships are likely to offer more generous trade-ins when business is booming, and they believe they can sell your vehicle more quickly than during lean economic periods.

The Best Time To Trade In Your Car or Truck

Your vehicle’s trade-in value is likely to decline as it depreciates. You may also notice fluctuations throughout the year as market conditions change. It can be difficult to predict when you’ll get the best trade-in price for your vehicle, but these are some good times to trade in at the best time:

  • When you’ve owned your vehicle for a few years: After two or three years, your vehicle isn’t depreciating as quickly as it was when you drove it off the lot, but it’s still in excellent condition.
  • When you owe less than the vehicle’s value: If you have positive equity, the dealership will pay out any amount you still owe on your car loan and give you the difference. You may want to wait until you’ve paid off your loan completely if you’ll incur prepayment penalties.
  • When your vehicle’s still under warranty: You should be able to negotiate a better deal if you still have a valid manufacturer’s warranty.
  • When you have relatively low mileage: Your vehicle’s trade-in value drops the more miles you put on its clock. You’ll get the most money for a vehicle with less than 30,000 to 40,000 miles and notice a sharp drop in value once you pass 100,000 miles.
  • At the end of the calendar year: Dealerships often offer incentives and rebates at the year’s end as they try to clear out existing stock to make way for new models, so you might get your next vehicle for less.

Why Knowing When To Trade In Matters

Knowing when to trade in your vehicle helps you get the best deal. When you understand the times your car is the most valuable, you can maximize your chance of a more generous trade-in valuation. If you know what makes your vehicle appealing at that moment, you can also highlight its selling points during your negotiations to secure a better deal.

Get a Trade-In Value Estimate Online

Our online calculator provides your vehicle’s market value based on Kelley Blue Book figures. Your actual trade-in value may vary based on the factors discussed, but this estimate can help you decide whether it’s a good time to trade. For a more accurate trade-in value, come and visit our team at Eskridge Lexus of Oklahoma City. We can assess your vehicle, suggest a trade-in value, and show you our range of new and preloved vehicles. We’re open Monday to Saturday to make purchasing your new car more convenient.