Purchasing trade in vehicles is a popular option among the cost conscious. They are generally less expensive yet equally reliable as similar brand new counterparts. Even though trade-in vehicles are typically easier on an individual's budget, disadvantages exist when buying them.
The following are some of the key disadvantages to purchasing trade-in vehicles:
Every trade-in vehicle was first purchased and driven by someone else. It has already been driven to work, exposed to the elements and subjected to various tasks. It has been used as a personal taxi, grocery getter and soccer practice hauler. Regardless of its condition, the thought that somebody else has previously owned the car is too much for many buyers to overcome. Purchasing new gives buyers the peace of mind that they are the first person to own, drive and take care of the vehicle.
Unless a used car is being purchased from a family member or close family friend, its vehicular history is somewhat of an unknown. Dealerships don't generally know how a used car was treated by its prior owners, and sell most of them "as is" with minimal guarantees or warranties. Since trade-in vehicles are purchased from a dealership, all trade-in vehicles come with unknown histories. Did the previous owner have a daily commute in bumper-to-bumper traffic? Was the vehicle involved in any unreported accidents? Was all maintenance performed by a licensed mechanic? These are all questions that are relative uncertainties when purchasing a trade-in vehicle. On the surface, the used car may seem well taken care of, but many instances of previous owner abuse may not arise until later in the vehicle's life.
The majority of car buyers use some sort of financing arrangement to purchase the vehicle. Whether the dealership, manufacturer or some third-party is the financier, trade-in vehicle financing rates tend to be higher than new vehicle financing rates. Even though the total amount being financed may be less, higher interest rates can quickly close the competitive gap trade-in vehicles may have when it comes to price.
Unless a trade-in vehicle is being purchased that is still covered under the original manufacturer's warranty, buyers shouldn't expect a used car to carry any sort of significant warranty. Certainly, third-party warranties can be purchased from the dealership, but they are generally not as comprehensive as the ones offered on new vehicles from the manufacturer. Since trade-in vehicles may be more susceptible to needing repairs than new ones, not having a manufacturer's warranty can be an expensive proposition.
It is not difficult to find trade-in vehicles with high mileage. While it is true that higher mileage equals lower price, this should be a primary concern for used car buyers. As discussed above, it is difficult to know a trade-in car's vehicular history. As such, it's nearly impossible to know how the high mileage was accumulated. Was it highway driving (which is generally easier on a vehicle's powertrain), or was it stop-and-go traffic (which is more damaging)?
Buyers on a budget may not be able to afford a new car purchase. However, they should be aware of the disadvantages of buying trade-in vehicles prior to doing so.
If you find yourself wondering, will I get more money if I trade my car for a used car, the answer is no. A car dealer will give your vehicle a thorough inspection. After they have look at it inside and out, they will make you an offer. It makes no difference to them if you are buying a new or used car, your old vehicle will still have the same value to them. They have to be able to sell your car at a profit. Trading in your vehicle is the easiest option when buying a new vehicle. If you want to get the most money out of your old car, it's best to sell it yourself. In almost all cases, you will make more money selling it yourself then you will get from a trade-in.
For more info, see Disadvantages of Buying Trade in Vehicles
Why is My Truck Trade in Value So Low?A low truck trade in value can be caused by any number of things. If the truck is old and in poor shape, the trade in price will be quite low. It is also possible that the dealer simply has too many vehicles like the car you are trying to trade in. If this is the case, they may only be willing to take your trade in if they can get it at a very low price. If you are unhappy with the trade in value you 're offered, it's best to try to sell the car yourself. While this may take longer, in the end you will get a better price.
For more info, see Disadvantages of Buying Trade in Vehicles
Will a Dealership Allow Me to Trade in a Car for a Cheaper Car?Yes, trading in a car for a cheaper car is possible. How easy it is will depend on the state of your current loan. If you are upside down, which means that you owe more on the car than it is worth, the balance of the loan will be added to your new car loan. If your vehicle is currently worth more than you owe, the extra money will be applied to your new loan as a down payment. A dealer is not going to give you cash back, so by applying the additional money as a down payment, your loan payments will be even cheaper.
For more info, see Disadvantages of Buying Trade in Vehicles
Who Gives Car Trade In Appraisals?Getting a trade in appraisal is as easy as going to KBB. Kelley Blue Book is widely accepted in the industry for trade-in appraisal values. Simply enter your vehicle's information and it will give you both a trade-in and resale value. These values are a rough guide, but tend to be fairly accurate. Another option is to check your local Yellow Pages for professional appraisers. These professionals will charge a fee ranging from $50 to $100. If your car is a classic car, expect the fee to be higher. In the majority of cases, using an online appraisal site is sufficient to get a rough idea of your car's value. If your car is a classic vehicle, it is best to have it professionally appraised.
For more info, see Disadvantages of Buying Trade in Vehicles
Will A Car Dealership Allow Me To Trade In My Car for Cash?Doing a trade in of a car for cash does happen, but it is a rare occurrence. If you have a high demand car, a dealer may be willing to purchase it from you. If you are driving just your average vehicle, then the chances of a dealer buying it without selling you a new car are slim. In most cases you are much better off selling the car yourself. A car dealer must be able to make money from your vehicle, so they are going to pay less than the market price for it. Selling it privately will ensure that you get top dollar for your car.
For more info, see Disadvantages of Buying Trade in Vehicles
