How to Trade In a Car in 8 Simple Steps
JUMP TO:
● Establish what your car is worth
● If applicable, balance your trade-in value against loan amounts
● Take stock of your finances
● Gather documentation
● Clean up your vehicle
● Shop around for offers
● Negotiate
● Close the deal
● Should I trade in my car, fix it, or sell it privately?
● More Trade-In FAQs
Trading in a car at a dealership comes with several perks — you don’t have to manage the transaction or meet with strangers, you can use the trade-in amount for a down payment on a new car, and you may benefit from a lower sales tax charge.
Learning how to navigate a trade-in successfully can help you get the best deal for your vehicle. From understanding your car's value to negotiating the best offer, here’s what you need to know about trading in your car.
How does trading in a car work?
1. Establish what your car is worth
Determining the value of your car is the first step in trading it in. Online resources like Kelley Blue Book (KBB) and Edmunds provide valuable tools for estimating your vehicle’s worth. You can input information about your vehicle's make, model, year, mileage, and condition to receive an estimated value. Additionally, many car manufacturers offer their own trade-in pricing tools that can help accurately assess specific models.
When using these tools, make sure to gather all the necessary information about your car's features, maintenance history (including recalls), and any recent repairs. This typically includes:
- Interior amenities, like seating capacity, trim details, and add-ons
- Safety features, like adaptive cruise control, blind spot monitoring, etc.
- Current vehicular condition with respect to defects and mechanical performance
You might come across different price values during your research. For instance, a "private sale value" is what you might get if you sold the car directly to a private buyer, whereas a "trade-in value” is what a dealership might offer you. There’s also a “wholesale value,” which refers to the potential auction or resell price of a vehicle, and a “retail value,” which is what you can expect to pay for a car at a dealership.
2. If applicable, balance your trade-in value against loan amounts
If you still owe money on your auto loan, you'll need to consider how this impacts your trade-in process. When the trade-in value of your car is higher than the remaining loan amount, you have positive equity. This equity can be used as credit toward your new car purchase.
If you owe more on your loan than the trade-in value, you're in a situation known as "negative equity" or being "upside-down" on your loan. In this case, you might want to pay off the remaining balance before trading in your car.
Some states offer a trade-in sales tax credit, which means you'll only pay sales tax on the difference between the trade-in value and the price of the new car. Be sure to research your state's specific laws to see if you qualify for this credit.
3. Take stock of your finances
Even if your car's trade-in value is favorable, it's important to consider your overall financial situation. Think about whether you're prepared to take on new car payments and other associated costs. Factor in insurance premiums, fuel expenses, registration, and future maintenance costs when making your decision, as these costs can add up quickly.
4. Gather documentation
Before heading to the dealership, gather all the necessary documentation surrounding your car and your ownership of it. This includes the vehicle's title and registration, your driver’s license, proof of auto insurance, service records, maintenance receipts, the owner’s manual, any wheel lock key or special tools (e.g., for removing roof attachments), and any warranties that might transfer to the new owner.
Don't forget to bring all sets of keys and any documentation regarding outstanding loans. It may also be helpful to have a list handy of any cosmetic or performance-based features you’ve added to your car that could potentially boost its value.
If you go for an online appraisal, you may only need your vehicle’s license plate number or VIN, make, model, year, mileage, and condition. However, appraisers may ask for additional information to validate details about your vehicle.
5. Clean up your vehicle
Before you present your car for appraisal, give it a thorough cleaning. This doesn't mean you need to invest in major repairs or upgrades, but making the car presentable can positively impact its appraisal value. Clear out any personal items, vacuum the interior, and perform a basic exterior wash. If there are any physical imperfections present, such as dents, scratches, or worn paint, there’s no need to fix them — just make sure to disclose these flaws when describing your vehicle’s condition.
6. Shop around for offers
When trading in your car, casting a wide net can make a world of difference. Don't settle for the first offer that comes your way; instead, take the time to explore multiple offers. This approach gives you a better understanding of your car's potential value and provides you with more leverage during negotiations.
Online vs. in-person appraisals
There are two main types of appraisals: online and in-person. Online appraisals offer a convenient way to get an initial estimate without leaving your driveway. These estimates are based on the information you provide and can give you a ballpark figure for your car's value.
In-person appraisals can give you a more accurate estimate because they allow you to answer any questions the appraiser might have on the spot. Ask to be present during the process so that every feature and detail of your vehicle is considered.
Get it in writing to protect your interests
If there’s one thing you should always remember, it’s to get everything in writing. Whether you're communicating with dealerships online or discussing terms in person, having documented evidence ensures clarity and reduces the risk of misunderstandings later. Obtain written confirmation of the trade-in value, any deductions, and the final offer for your car.
By gathering multiple written offers, you're empowered to make an informed decision and, if needed, leverage these offers for better deals. Remember, the more you know and the more you have in writing, the smoother your trade-in process will be, from initial negotiations to closing the deal.
7. Negotiate
It’s recommended to proceed with the trade-in process as a separate transaction. Try to settle on a trade-in price first before entering negotiations for your new vehicle.
Negotiations are a standard part of the trade-in process. Dealerships might offer different trade-in values, so don't hesitate to negotiate for a better deal. If you're meeting in person, consider making an appointment to save time. Be assertive but respectful in your negotiations and remember that you can always walk away if the deal doesn't meet your expectations.
8. Close the deal
Once you've reached an agreement with a dealership, it's time to close the deal. Complete any necessary paperwork, including the title transfer and sales contract. Review the terms and conditions carefully before signing, and make sure you understand all aspects of the transaction. With those car keys finally in your hands, you’re ready to enjoy your new ride.
Should I trade in my car, fix it, or sell it privately?
When deciding whether to trade in your car, fix it up, or sell it privately, consider the following pros and cons:
Trading in Your Car: Pros and Cons
| Pros: | Cons: |
| • Convenient and time-saving process. • Trade-in credit can be used toward your new car purchase. • Some states offer a trade-in sales tax credit. |
• Trade-in value might be lower than what you could get in a private sale, especially for uncommon cars or those with a manual gearbox. • Potentially limited negotiation room on trade-in value. |
Fixing Up Your Car: Pros and Cons
| Pros: | Cons: |
| • Potential to increase your car's value. • Personal satisfaction from restoring your car. • Repair costs will often be less expensive than buying a new car. • Known vehicle history. |
• Repair costs can add up quickly. • No guarantee that repairs will fully recoup the investment. • Dealing with the inconvenience of constant breakdowns and maintenance issues. |
Selling Your Car Privately: Pros and Cons
| Pros: | Cons: |
| • May fetch a higher sale price compared to trade-ins. • Full control over the selling process. |
• Requires time and effort to advertise and interact with potential buyers. • Need to handle negotiation, paperwork, and payment arrangement. |
More Trade-In FAQs:
Can you trade in a leased car?
Yes, you can trade in a leased car, but it’s usually recommended to do so once your lease expires or is nearing the end of its term. Be sure you understand the terms of your lease agreement and any potential fees or buyout costs associated with early termination should you choose to trade your car in before your lease expires.
How long should you keep your car before trading it in?
There's no magic number but waiting until you're not upside-down on your loan is generally advisable. This ensures you're in a better financial position for trading in your car.
What paperwork do I need to trade in my car?
For a seamless trade-in transaction, make sure to gather the following items:
- Vehicle title and registration
- Owner’s manual
- Driver’s license
- Proof of auto insurance
- Service records
- Maintenance receipts
- Warranty information
- Documentation showing any outstanding loans
- Information about additional features or accessories
- All sets of keys
What do dealerships look for when trading in a car?
Dealerships consider factors like the car's condition, mileage, make and model, maintenance history, and current market demand when assessing its trade-in value.
Should I trade in my ICE vehicle for an EV?
As the automotive industry evolves, trading in your Internal Combustion Engine (ICE) vehicle for an Electric Vehicle (EV) can offer benefits such as reduced emissions and lower operating costs. With options like the Mazda CX-90 PHEV – a plug-in hybrid electric vehicle – you can have the benefits of cutting-edge technology at your fingertips.
If you're considering this transition, learn more about the different types of EVs to decide which electric vehicle best suits your driving needs.
Trade in your car at a Mazda dealership near you
When you're ready to trade in your car, consider Mazda as your trusted partner in the process. With our dedicated team members and commitment to customer service, you can confidently navigate the trade-in journey and drive away in a new vehicle.
We offer a range of additional products and services that can enhance your trade-in process, including:
- Special offers and incentives for select vehicles.
- A diverse selection of Certified Pre-Owned vehicles that enable you to enjoy a new ride at a lower cost.
- The Mazda Digital Showroom, designed to help you find your next car without leaving your home.
- Flexible financing for payment options that fit within your budget.
- Online resources like our Guide to Buying an EV and What to Consider When Buying a Used Car.
If you’re ready to let go of your old ride and drive away in an upgraded vehicle, shop our latest models online or visit your local Mazda Dealer today.
This article is intended for general informational purposes only and is based on the latest competitive information available at the time of posting. Information herein is subject to change without notice and without Mazda incurring any obligations. Please review a variety of resources prior to making a purchasing decision. Visit Resource Center for more articles.