Car Buying Articles

Trade-In Options for Your Used Car

Trade-In Alternatives That Provide Convenience and a Fair Price


  • Verifying the Condition Level

    Verifying the Condition Level

    AutoTrader's instant appraisal is fast online, but may take longer at the dealer, since the used-car manager must verify the condition level and input the information in the tool. | April 08, 2014

4 Photos

Trading in an old car was once the Achilles' heel of car buying, exposing owners to lowball offers and complicated negotiations. But happily, the process now can be more lucrative and user-friendly. From up-front price quotes to guaranteed trade-in values to car-buying consultants who handle the entire transaction via the Web, dealers are providing smoother transitions between your old car and your new one.

Shoppers love the convenience of trading in, since it completes all auto-related chores in one dealership visit. They avoid the headache of selling their old car and, as a bonus, the dealer handles all the DMV paperwork. And in some states, trading in can provide a break in sales tax. Our article, "What New Car Fees Should You Pay?" explains this in more detail.

But what if you were offered less than you expected for your car? Your best bet is to sell it yourself, but that takes time and perhaps more effort than you had in mind. Here are a few alternatives to trading in your used car at the dealership.

Before you begin exploring trade-in alternatives, you should have a baseline figure on what your car is worth. A good starting point to assess that worth is to use the Edmunds used-car appraisal tool. Also, check online classified ads and find cars comparable to the one you want to trade in. This helps establish your car's current value. Remember that trade-in prices are lower than private-party and dealer retail prices.

Here's a round-up of trade-in alternatives for consumers. We ranked them in alphabetical order:

AutoTrader's Instant Trade-In Offer: Long known for used-car classifieds, the AutoTrader Web site now offers to appraise your trade-in, give you an up-front price and connect you with dealers. Input a few details about the car and then a few minutes later, you'll get an e-mail with an estimated value. The site lists dealers who will either give you a check for your car or a value for trading it in on a new car. Restrictions apply, but it does present a stated price that might give you a greater sense of confidence before you go to a dealership.

Make sure you honestly answer the questions about the car's condition level, because the offer is subject to change when the participating dealership sees the car. While it is nice to get an instant offer, the "instant" part only applies to the e-mail you get: It actually takes longer at the dealership than a typical trade-in appraisal. This is because the dealership will conduct its usual inspection and then has to input its findings in the AutoTrader tool to verify the figures.

AutoNation Direct: AutoNation Direct is the online arm of AutoNation, the country's largest auto dealership chain. One of its car-buying consultants will appraise your car based on your description of its condition and other factors, such as mileage, and give you an up-front price. This removes the negotiating that car buyers dread. The entire transaction can be concluded at the car buyer's home or office, including the trade-in. Here's more about AutoNation Direct's pricing system.

It's important to understand that AutoNation Direct isn't trying to distinguish itself by offering the best trade-in prices, says Simon Smith, its national sales director. The main benefit is what Smith calls a "protected buying experience" that is free from negotiating pressure. While Edmunds.com hasn't itself used the AutoNation Direct trade-in process, many car shoppers give the service high marks.

CarMax: This used-car superstore has more than 100 outlets in 27 states and promises, "We'll buy your car even if you don't buy ours." Edmunds has used this service many times when selling long-term test cars and we've often been pleasantly surprised at the high prices CarMax has offered. Sometimes the used-car chain offers us less than we expected, but it at least gives us a guaranteed back-up plan and we can decide whether it is worth our time to try and improve on the offer. As one CarMax salesman once told us, "Our checks don't bounce."

Inspection takes about 30 minutes and the trade-in offer is good for seven days. Some customers have found that the best way to dispose of their old cars is to negotiate a deal for a new car elsewhere, then sell their old one to CarMax, where the prices are typically better than at a traditional dealership. Another effective strategy is to get the CarMax estimate and list the vehicle for about $1,000 over the CarMax offer in a free online classified. If the vehicle doesn't sell in six days, you can take it back to CarMax and sell it there before the offer expires.

Factory Trade-In Programs: These alternatives are really for a future trade-in, not the current one. If you buy a new Subaru or Tesla, the car comes with a guaranteed trade-in price. For example, Subaru's Guaranteed Trade-In Program states how much a Subaru dealer will give you for the car when you bring it back later as a trade-in. For some, this removes the doubt about the impact of depreciation. The buyers can, in a sense, see into the future and know what their new car will be worth as a trade-in. This trade-in price is available for six years.

If you finance your Model S electric vehicle purchase with Tesla (admittedly, a small pool of people), the company guarantees that the car will have "the top residual value of any high-volume premium sedan brand (Audi, BMW, Mercedes or Lexus)" after three years of ownership. Buyers will get a "resale value guarantee" letter shortly after they purchase the vehicle, according to Tesla. The method to calculate the value and to cash in the offer is somewhat complicated and is outlined on the Tesla Web site.

Comments

  • kmart00 kmart00 Posts:

    I usually dont consider trading in a vehicle, as I know I would not receive anything close to a private sale price for it. Based on the advice at Edmunds.com, I decided that it would be worth a chance going to CarMax to see what they offered me. I had no delusions that they would offer me private sale value (I estimate around $4,800) but I felt sure they would offer more than the $3,500 the dealership offered me as a trade in. Carmax offer? $2,500. I expected them to at least match the dealer, if not exceed by a couple hundred dollars. What a let down. Edmunds should revisit this recommendation, in my opinion. At least at a dealership, I expect to be low balled. The only thing I'll give Carmax is that they were honest about the whole process and gave me 7 days to think about it. The fact that I had to drive 100 miles each way to get this offer is what is truly annoying.

  • I highly recommend staying as far away from CarMax as possible. I purchased a vehicle, a week later it needed an entire new brake job. They agreed to fix a window with a rock chip when I purchased the vehicle and then tried to get out of it. In replacing the window they trashed my paint and dented my door He also BLATANTLY lied about the window he put in saying how new it was... and it is OBVIOUSLY NOT. Fine... But dont lie about it AND ruin my door in the process. I have been in tears about how badly this experience was. DO NOT GO TO CARMAX. Especially the Menomonee Falls, WI location. The service manager, Mike, will treat you like crap and ruin your car right in front of you. Worst experience ever. So much stress.

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  • davidmj davidmj Posts:

    I think this is very important for your viewers to see. Last week I looked at your article "trade in option for your used car" which contained links to autotrader, carmax and autonation before selling my used car, and contacted all of them in order to see which will provide me with a decent trade in value. I wasn't looking at trading in but just to sell outright to a dealer before buying my new car. I started with autotrader's trade in place and that was absolutely an exhausting experience. They even said "guaranteed offer" and the 3 dealers that were emailed to me were all either interested in selling me a car or simply gave me a lowball offer. I then visited the autonation's site and filled out my car's info and was giving the same method of offer "guaranteed offer" which was a little better but another waste of my time. Carmax was the last choice but when I looked for the nearest location to my work, I found negative reviews on Yelp and google about Carmax and numerous people recommended a company called Trade-In Solutions. Trade in solutions reviews were glorifying. That was a surprise because nowhere on your site there was any mention about this company. I tried Carmax and they were a little better than autotrader and autonation's dealers but Trade in solutions was by far better and more accommodating. They weren't interested in selling me a car and not once made any negative comments to persuade me to sell my car for a low offer. They explained the whole process and I was out of there in less than 40 minutes with a shuttle ride home which was the best part, because I've only been in L.A. for 9 months and did not have anyone that could give me a ride. I think you need to check out this company. Another interesting part was when I mentioned to them that they should contact someone in Edmunds, they mentioned that 2 people from Edmunds already sold them their car. I think you should make this company to others like myself so that others don't have to settle for a low offer from the above companies that you recommended. There is one more thing.....I had the title to my car but as I understood they don't buy leased cars. I hope this will help inform other consumers that are looking for a better alternative to sell their car and not trading in. Dave

  • sp1 sp1 Posts:

    I've had a half dozen cars appraised at CarMax over the years, and they low-balled me on every occasion except for one. Car buying services like AutoNation tend to offer even less. I've had the best luck selling to dealers of the same make as the vehicle, separate from the new car purchase transaction. If you can deal with the inconvenience, selling a car yourself through Autotrader or Cars.com is the most profitable. And you'll always get a better deal with any commercial or private buyer if you can sell your used car with at least a few months of the warranty period left on it.

  • igozoomzoom igozoomzoom Posts:

    I was in the market for a new SUV (ended up with a new Mazda CX-9) back in November 2012. My 2007 Ford Explorer Eddie Bauer had 136,000 miles on it. It was originally my best friend’s company car that he custom ordered. He managed to put 71,000 miles on it in 16 months, which is when I bought it. Even though it was only 16 months old, the warranty coverage had expired at 36k (B2B) and 60k (Powertrain) miles. But I knew my friend had always taken care of it and had it serviced/oil change every 5k miles. I was replacing a 2003 Explorer XLT 4WD that had been rock-solid reliable, so I expected the same from the 2007 Explorer. Between May 2008 and November 2012, I spent over $9,000 for repairs on that heap and the transmission would have intermittent issues that scared the crap out of me, so I was determined to get rid of it! I checked Edmunds TMV and KBB.com to get an idea of trade-in value. I was pleasantly surprised that both sites showed a trade-in value of $7,600-$7,900. I was expecting no more than $7,000 and would have let it go for $6,500 if necessary. So I took it to Carmax for an appraisal and, again, I was surprised that they offered me $7,500 for it. I took the written offer and went to buy my new CX-9 and I was very happy with every part of the deal expect the trade-in offer- $7,250. I showed the sales manager the Carmax offer and asked them to match it, but the Used Car Manager refused. He pointed out that I’d lose the sales tax benefit (around $490) by selling it to Carmax and not trading it in. I finally walked over to the ‘executive’ offices and found the General Manager of the dealership. I told him that we were very close to a deal but I was ready to walk if they didn’t give me $7,500 for the trade. I asked him if he wanted to lose the sale over $250. He walked back to the sales manager’s office, wrote in a $250 discount line and signed his name to approve it. Without the Carmax offer (and because I wanted to get rid of it so badly), I would have accepted less than what it was actually worth! Having to fight for that final $250 was frustrating because it seemed logical that if Carmax could pay $7,500 for it (and they would have no choice but to sell it at auction due to the high mileage) but the Mazda dealer could also afford to pay $7,500 and still be able to sell it or send it to auction and make a profit.

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