Tips on Buying Cars: Trade In, new car purchase, leaseguide

Question
I have a question about trading in a car.  We want to trade down to a smaller car.  We have a van that we still owe on, which we want to use to trade in.  What would the dealership offer us as a trade in if they determine that there is not much margin on the van after they pay off the contract?  In other words, would we be better off selling the van on our own with the objective of just getting enough from the sale to break even, and then buying from the dealership without a trade in?  If you would need specifics about our vehicle in order to give us advice, I will find out the blue book, how much we owe, and what kind of vehicle we are looking to buy.  Thanks for any direction you can provide!
-john white.


Answer
John:

Thanks for your note.

First, it's ALWAYS better to sell your old vehicle yourself and use the proceeds as a down payment on your new vehicle. This way, you get more money than by trading, and it eliminates one element of complexity from the new-car buying transaction.

It's better to buy a new car without a trade-in. With a trade-in, it's too easy for the dealer to juggle the trade credit and new-car purchase numbers in a way that may be confusing. It's difficult to tell if you're getting an overall good deal or not.

Second, go to www.edmunds.com and find the current market value for your vehicle to make sure you get a fair price if you sell -- or if you decide to trade.

Good luck.

Al
www.LeaseGuide.com