The used car industry is at 45 million dollars a year according to people whose business it is to know these things. You might wonder how they're able to make so much money on used car merchandise? They make a significant profit from your trade-in when you purchase a new car, as you will see.

Selling the car to a third party brings a modest profit, but if you're like many owners, you prefer to use the car as a trade-in to offset the cost of the new car. Selling the car on your own takes time and effort.

When you go to buy your new or used car, it's best to establish the value of your trade-in before you make a deal to purchase from the dealer. If you don't like their offer, let them know your blue book trade value. If they're motivated to sell you a new car, they'll be willing to work with you on the trade-in.

Trade-in value

Internet sources, such as Kelley's Blue Book, Edmunds, and others, have online calculators that allow you to input your car's variables. You input mileage, make, model, body style, and condition of your car. Their online calculator gives you the trade-in value based on these parameters. You can also find what the same car sells for on the retail market.

Most cars fall in the 'good' condition' with no major mechanical or cosmetic reconditioning needed.

If you're the original owner, take a detailed list of the maintenance history of the car with you to make the trade-in process go smoother. Know your car and don't give in to dealer pressure tactics. You can always go somewhere else.

Example of a trade-in value

Here's an example of a 2001 model, in good condition with lower than average mileage, but needs some reconditioning:

Calculated book value $4220.00.

Private party sale will bring you about $5200.00

Suggested retail price from website $7600.00

The dealer will probably offer substantially less than your calculated book value.

The same model sells for about $7800.00 to $8600.00 from various dealer websites. My experience with dealers is that they'll offer you as little as they think you'll accept based on the deal they're trying to put together for you.

The trade-in value is one facet of the car buying process that goes unchecked by many of us. Be wise and gather all the figures you need before you give up your old car to a dealership.

If you live near a CarMax auto dealer, they state that they'll buy your car, using the Kelley Blue Book as a reference, even if you don't buy a car from them. Call ahead to see if any restrictions apply.

Source:

http://kbb.com

Learn more about this author, Mona Gallagher.
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