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 hassle-free. At the dealership, you can find and test-drive a new car you love, get your vehicle appraised, and finalize the deal all in one visit. The dealership takes care of all the paperwork, including title transfers and financing arrangements, ensuring a smooth process. Trading in a vehicle can also simplify managing funds, as you receive the value of your existing vehicle immediately to put toward your new purchase.

When you trade in your vehicle, you avoid the stress of finding the right buyer. There’s no need to advertise, meet with potential buyers, or worry about strangers test-driving your car. You also save time preparing your vehicle for sale, as most dealers can deduct the cost of any necessary repairs from your trade-in value.

Additionally, trading in your vehicle can reduce the amount of sales tax you pay. For example, when purchasing a new vehicle in Oklahoma City, you pay a 3.25% motor vehicle tax after a flat fee of $20 for the first $1,500 in value. For a $45,000 vehicle, this amounts to an additional $1,433.75. However, if you trade in a vehicle with a trade-in value of $20,000, you only pay tax on the remaining $25,000 of your new car. This means you’ll pay just $783.75 in sales tax, saving you $650 that you can put toward gas or insurance bills.

Factors That Can Impact Your Trade-In Value

The dealership determines your vehicle’s trade-in value based on its market value, which is the price it is likely to fetch on the open market. Several factors related to your vehicle and the market can influence this 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 decrease over time due to depreciation. Additionally, market conditions can cause fluctuations throughout the year. Predicting the optimal time to trade in your vehicle can be challenging, but here are some moments to consider:

  • 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.