First-Time Buyer: Trading in Your Current Car
If it’s your first time trading in a car at the dealership, you’ve probably got a few questions. We’re here to help! Our first-time buying guide will walk you through the entire trade-in process.
Key Takeaways
- At the dealership, you can trade in your current vehicle to cut down on the cost of buying a new vehicle.
- If you financed your current car, you can still trade it in. However, you’ll only be able to put the value of your current car toward the cost of a new car if you have positive equity.
- Before you head to the dealership, do your research. You can estimate your car’s trade-in value on our website. Just go to the Finance menu and click on Value Your Trade.
- Gather your paperwork and bring it to the dealership. From there, the trade-in process is simple!
What’s a Trade-In?
When you trade your old car in at the dealership for a new car, they’ll subtract your old car’s trade-in value from the price of your new model. If you don’t owe any money on your current car, a trade-in is a great way to reduce the price of a new car.
Got Loans?
As a first-time buyer, you may not have a loan on your current vehicle. Perhaps you were gifted your first car, or you bought it in cash from the previous owner. However, if you did finance your current vehicle and you still owe money on it, you can still go through with a trade-in. As part of the trade-in process, the dealership will take the remainder of your current loan and roll it into your new loan for your new vehicle. This way your old loan will be completely paid off.
If you have positive equity (you owe less than what your car is worth), you can apply that positive equity toward the purchase of a new car. However, if you have negative equity (you owe more than what the car is worth) you’ll need to pay the difference between what you owe and your car’s current trade-in value.
If you financed your current car, timing is key when you’re planning to trade it in for a new one. It’s a great idea to wait until you have positive equity, so you can actually put some amount of your trade-in value toward a new car.
Research Your Trade-In Value
If you’ve decided that the timing is right for a trade-in, do a little research. Our website has an easy way to check the value of your trade-in! Click on the finance menu and go to “Value Your Trade.” Here, you can estimate how much your car is worth, depending on its mileage and current condition. Of course, a dealership will examine the condition of your car and give you a trade-in offer based on what they find.
From there, you’ll know what to expect when you head to the dealership.
Complete Your Trade-In!
Before you head to the dealership to trade in your vehicle, gather the necessary paperwork. You’re going to need your loan information, including your account number and the amount you owe. You’ll also need the vehicle’s registration, proof of insurance, and your driver’s license. You should also bring the title of the vehicle if you don’t owe anything on it. Bring all of your vehicle’s keys and key fobs as well. It may also be helpful to have a record of your car’s estimated trade-in value.
