Understanding Your Trade-In Value

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

, - July 19, 2018

If you’ve been thinking about trading in your current vehicle for a new one, it’s important you understand what goes into determining your trade-in value. While it’s hard to put a specific number on what it might be worth, you can at least estimate, and possibly even increase the value of your trade-in.

What Affects Your Trade-in’s Value?

Depreciation is the biggest factor that affects your trade-in’s value. But, there are a few other factors you may not think of that also affect its resale value:

  1. Make and model – The specific make and model you have affects the value of your vehicle. For example, Toyotas are famous for having better trade-in values because of their reliability and high demand. On the flip side, if your trade-in is a discontinued make or model, you may find its resale value to be lower because demand for these cars is often low.
  2. Location – Where you live also affects your trade-in value. This goes back to what make and model you have. A convertible will be in higher demand in places like Florida and Southern California, whereas it doesn’t sell as easily in places such as Montana or Maine.
  3. Age – The older the car, the lower its resale value typically is. Depreciation kicks in once you drive the car off the lot, and you could see a drop in value of close to 20 percent within the first year of ownership. Although depreciation is unavoidable, you won’t lose a big chunk of the vehicle’s monetary value if you plan accordingly. The optimal time to trade in a new car is around three to five years.
  4. Mileage – If your trade-in’s mileage is at or above 100,000, you may find its value to be less than you’d expect. Most dealers want to see a trade-in with average miles on it – not an extensive amount. The reason why? It’s more difficult to sell a trade-in with a lot of miles on it, and dealers generally offer a lower amount because of it.
  5. Condition – Does the vehicle need any cosmetic work done? If the interior or exterior has minor wear, it more than likely won’t affect the trade-in value as much. But, if extensive repairs need to be done to make it look presentable or run optimally, you can expect the resale value to be lower if the issues aren’t fixed.

How to Increase Your Trade-in’s Value

When it comes to preparing your vehicle for the trade-in process, there are two things that can usually help increase its resale value:

  1. Detailing – It pays to get your car squeaky clean. A good detailing can cost you, but if it’s been awhile since you gave your car a thorough cleaning on the inside, you can increase the vehicle’s value by taking it in to get detailed. If you don’t have the extra cash to get the car detailed, you can clean the vehicle yourself and buy the right tools to do so at home. It should also help to wash your car and make sure it’s looking good on the outside, too.
  2. Keeping up with maintenance – Make sure the tires are properly inflated, all fluids are changed, and any needed repairs are completed before you trade it in. It’s important you get the vehicle as ready as possible for the trade-in process, and you shouldn’t neglect basic car maintenance.

Ready to Trade in Your Car for a New One?

When you’re ready for a new vehicle, and you have a trade-in ready to go, you may be wondering where to go to get financed – especially if you have bad credit. But look no further, we want to help!

At CarsDirect, we work with a nationwide network of dealers that have the lending resources available to help you get the financing you need. To get started, simply fill out our fast and secure auto loan request form today and we’ll get right to work matching you with a dealer in your area.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

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