. . . Trade-In
The Deal is non-negotiable unless there is a Trade-In involved. You may ask yourself ‘ why is that’? The answer is that a Trade-In is an unknown quantity. When structuring a Lease Deal, the Dealer knows the value of the car they are leasing and the cost to lease the car. What the Dealer does not know is if you, the consumer, have a Trade-In or the value of your Trade-In. There are several factors to consider if you have a Trade-In:-
· The benefits of Trading-In your vehicle.
· Do you own the Trade-In vehicle outright?
· Are you currently Leasing the Trade-In vehicle?
· Are you currently Financing the Trade-In vehicle?
· What is the condition of your Trade-In vehicle?
The benefits of Trading-In your vehicle:
You do not have to deal with the costs of advertising your vehicle or the time it will take to show your vehicle to prospective buyers.
You do not have to wait for an undetermined length of time before your vehicle is sold.
If security and safety is a concern to you, then Trading-in your vehicle is ideal. It eliminates your safety and security concerns of having strangers come to your residence to view and test drive your vehicle.
If the method of payment is a risk factor to you, then Trading-In your vehicle is ideal. The risk of getting a check that will bounce or a counterfeit cashier’s check is eliminated by Trading-in your vehicle.
If your vehicle is not working properly then Trading-In your vehicle eliminates you having to deal with complaints from the buyer.
Do you own the Trade-In vehicle outright?
If you own the Trade-In vehicle outright, then in essence, what you are trying to do is sell your vehicle to the Dealership.
You and the Dealer agree on a price for your Trade-In vehicle. The Trade-In value can go towards the Drive-off amount of your Lease Deal.
If the Trade-In value is more than your Drive-off amount, then the Dealer can give you a check for the remaining balance.
If the Trade-In value is less than your Drive-off amount, then you can write a check for the remaining balance to the Dealership.
Are you currently Leasing the Trade-In vehicle?
If you are currently Leasing a vehicle and want to Trade-in that vehicle for a Lease Deal, then you are asking the Dealership to pay-off your current Lease and return that vehicle to the Leasing company for you.
The Pay-off amount may include early termination charges.
The amount of the Pay-off will be added to your Lease Deal which will alter the monthly payments and your Lease Deal.
Please note that you will be responsible for any damages, excessive wear and use or excess mileage use on the lease Trade-in vehicle.
Are you currently Financing the Trade-In vehicle?
If you are currently Financing a vehicle and want to Trade-in that vehicle for a Lease Deal, then you need to determine which category you fall under. Do you have equity in your vehicle or do you have negative equity.
If you have equity in your vehicle, then the Dealer will pay off your loan and credit the positive equity balance towards your drive-off.
Negative equity is when your loan amount exceed the value or your vehicle.
Your loan balance is $10,000.00
Your vehicle value is $ 8,000.00
Your equity amount is negative ($ 2,000.00)
The dealer will pay off your loan amount, however the remaining balance(the negative equity) will be added to your Lease Deal. This balance will alter your monthly payments and your Lease Deal.
What is the condition of your Trade-in vehicle?
The condition of your vehicle determines the value of your Trade-in. You can check sites such as NADA or Kelley Blue Bookto help you evaluate your Trade-In vehicle. Please note those values are guides and not the exact value of your Trade-in vehicle. Try to be as realistic as possible as to the value of your vehicle. If you determine that you want more for your vehicle than what it is worth, then you will be headed for disappointment. Understand the differences between a Trade-In value, Private party sale value and retail value.
Things to examine when evaluating your vehicle are:
Year: How old is your vehicle.
Mileage: Is your vehicle mileage under the annual usage or over the annual usage.
Damages: Are there any damages to the exterior such as scratches, dents etc.
Are there any damages to the interior such as torn seats, cracked dashboard etc.
Mechanical condition: Is the brakes working? Is the air-conditioning working etc.
Paint: Is the paint in good condition or is it faded in areas?
Accessories: Do you have power windows, CD player etc.
Service Records: Did you do the required maintenance on your vehicle such as oil changes and did you keep your records?
Cleanliness: Is the Interior of your vehicle clean? Is it stained from animals and kids? Does it have any foul odors? Was the vehicle used by a smoker?
Keep in mind that the dealership will look at all of these in evaluating the value of your vehicle. The Trade-in value will always be lower than the private sale value. Once the dealer accepts your trade, they have to deal with all the inconveniences you were not willing to deal with. Trade-in is a convenience to you, not a requirement.