Flyers are tempting us to quickly and easily exchange an old car for a new one. They assure us that this trade-in and trade-off is profitable. Not all drivers fully understand what the essence of the Trade-In service is, what is it good for and is there a catch to it?
In many civilized countries, the Trade-In service has been operating successfully for a long time. The vast majority of Americans, for example, have no idea how to independently sell their used car.
Old cars are usually discarded and disposed of, and the one that is still serviceable changes for a new one but with an additional charge. All the rest is the dealerships problem. He can put a used car in his salon or sell it through specialized auctions, from where American cars are distributed around the world.
Another illustrative example of the efficient operation of the trade-in service several years ago was demonstrated by Germany. In the midst of the economic crisis, they developed a program to support the domestic auto industry, according to which everyone who bought a new car received 2500 euros for their old one.
Advantages of Trade-Ins
Save Your Time
The first and most important advantage of a trade-in is the tremendous amount of time you save. To sell a used car, you need to regularly give free ads to specialized publications, wait for someone to pay attention to your car, call and ask a hundred questions, ask to see it personally. And so it can go on for months. And if you are still lucky, and the buyer is found, you will have to re-register the documents yourself and stand in lines. Basically, selling a car yourself is time-consuming and at times could be frustrating.
Some drivers prefer an even faster way to get rid of their used car. There are a lot of companies lately that will buy your car for cash. This option is not as profitable (you won’t get as much for your car), but it’s really fast and convenient. It’s a good solution for those who need to get rid of a car really fast, for example, if they are moving to a different country soon.
Arriving at a car dealership that provides a trade-in service (and there are a lot of them), the owner of a used car gets rid of a lot of the problems described above. As a rule, dealers take upon themselves all the concerns for completing the necessary documents and do it very quickly.
In fact, it is possible to become the legal owner of a new car within 5-6 hours without any risk of encountering fraud, which there is a lot of lately. And if for some reason you don’t have enough money for a new car, you can ask the dealer for a loan.
By the way, trade-ins are not only for used cars but also for new vehicles. This also makes sense. For example, when there is a desire to change something in your life, and there is no possibility to pay for it. When you trade-in your old car for a new one, there is less risk of you having problems with that car since it’s new. Such an acquisition may be beneficial in terms of price.
Limitations of Trade-In System
The process of selling used cars is not easy. You need to find a place to store cars, hire staff, and equip a car service center. All this is expensive, so car dealerships use any possible opportunity to try and “knock down” the price, finding fault with every little thing. To do this, diagnostic stations have a special price list, in which all the shortcomings have their monetary value, sometimes unreasonably high.
As a result, the estimated value of a used car is 5-10% lower. Add to this the costs of the procedure of technical and legal diagnostics, paperwork, pre-sales preparation, and you will receive a drop in the final price of up to 20%.
As a rule, at the first meeting, the client does not agree with the estimated value of the car, as his own vision of the price of the car is much higher. This is normal because the seller always wants to get the maximum profit from their vehicle.
A lot will depend on the make, model, and condition of the car you’re selling, but it also happens that the prices for new cars that are available through trade-in are obviously higher. In addition, not every vehicle is suitable for exchange.
The car dealership is very reluctant to deal with cheap or, on the contrary, expensive, rare and exclusive copies. That’s because with cheaper cars, there is less profit to be made. On the other hand, rare and expensive models will require costly repairs to get them ready to be re-sold and there is a smaller market for them as well.
How to Do It Right
If you are ready to accept less money for your car in order to save your own time and to avoid risks, then a trade-in might be a good option for you. Go to a dealership that has the car you want to upgrade to and see how much they are willing to give you for your old car. Usually, the dealership will want to do a diagnostics on your car to see everything that’s wrong with it before offering you a price.
Once your car goes thorough diagnosis, they will inform you how much they will pay for the trade-in. If it suits you, enter into an agreement and wait for the completion of the formalities. If you are not satisfied – take the documents and leave.
The only required item is diagnostics. You have to pay for it anyway. In order to avoid misunderstandings, find out the value of your car in advance.