Have you checked how much your vehicle is worth lately? If it’s only a few years old, you may have gotten an offer from the dealership to buy it back recently. According to Kelley Blue Book, many dealerships have too much new vehicle inventory, contributing to better offers on some trade-ins.
Conrad Spangler recently took advantage of a trade-in offer. Earlier this year, the father of three small children traded in his truck for a 2024 minivan. “It’s so easy. Just pop that door open, the two older ones hop in there, put the kid in the back,” Spangler said. “So I couldn’t do without a minivan right now, I wouldn’t go back.”
The retired Army major and Brazilian jiu-jitsu black belt says he’s especially delighted with the minivan because of the unexpected trade-in value he got for the truck – $32,000. That’s just $5,000 less than what he paid four years ago.
“I‘ve traded in cars before and I’m always kind of shocked of how little they want,” Spangler told us. “You know, like, no way. No, I’m not trading it for that. I’ll go sell it somewhere but I was like ‘Okay, that’s a good deal I’ll take it’.”
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Brian Moody from Kelley Blue Book said it’s a win-win for both Spangler and the person who buys his trade-in. “If you’re talking about a car with a reasonable reputation for reliability, and it’s been cared for and it’s not sure old, you may end up in a place where an older version of that car is similar to a new car.”
If you’re thinking of trading in your current ride, Moody says the first thing you should do is check your credit score. If it’s dropped since you financed your current car, you’ll want to compare interest rates as well, not just the trade-in value.
If your credit score is the same or better, Moody says you should go to your bank and get a pre-approved auto loan. “Take that to the dealer when you’re shopping and say ‘If you can beat this, I’ll finance it through the dealership.’ And there is a good chance they can beat that because dealerships do this all day long because they have many financial levers to pull.”
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Next up, compare incentives between dealerships. The ones more desperate to sell the new cars on their lots tend to offer better deals and more room for negotiating.
And finally, you’re ready to pick the new car that’s right for you and your trade-in.
“Big truck-based SUVs, minivans or full-size trucks – those are basically going to be full-priced most of the time,” Moody said. “There are some exceptions, but if you’re looking for a sedan or a hatchback, those can often be less expensive.”
The recent cut to the federal interest rate will likely reduce rates for auto loans, but it may take some time for this to happen – possibly early next year according to some experts.
