When I Trade In My Car What Questions Should I Ask
by J Brown
(Biggar)
Question: When I trade in my car, a '59' plate car, are there questions I should ask? I am purchasing a brand new car - what should I ask the salesman about the trade-in price he will give against the new car purchase?
You Can Run it ‘til it Sells at AutoTrader.com
Answer: Hi J, The first question that comes to mind is whether or not you will receive a tax credit for the value of your trade. Some states allow this and others don't.
For instance, if I were to trade in my car in Arizona I would not pay taxes on whatever dollar figure the dealership assigned to my trade in.
The value of my trade would be subtracted from the sale price and the difference would be the only amount taxed.
On the other hand, trading a car in California, would require that I have to pay taxes on the full sale price and would receive no credit for my trade. This can be a significant amount of money.
If you are in a state that does not allow a tax credit, then it may be best to look to sell your car on your own.
Take a look at my private car sales guide here How to Sell a Car, this will help you maximize your profits!
Even if you do receive the credit in your state, you will almost always get more money selling your car on your own.
The real key to trading in a car is to be sure that you are getting top dollar for it!
I've created another guide that will help you determine what top dollar is for your trade based on the Kelley Blue Book Values and you can view it here KBB Used Car Values.
Also, if I were to trade in my car, I'd want to know whether or not I'm supposed to keep my plate or if the plate stays with the car.
Not too big a deal, but if you are supposed to keep the plate and your car is wholesaled your plate may be stolen and used in the commission of a crime...
You'd obviously be able to prove that the car was traded in after all was said and done, but do you really want to go through the hassle of having the cops knock on your door at 2:00 AM to question you about a robbery?
Lastly, not so much something to ask, but something to keep in mind is to bring the title if free and clear and/or have contact information for the current lienholder so that an accurate payoff can be obtained quickly.
Definitely check the guides above depending on what you plan to do. Reading those could mean the difference between thousands of dollars lost and thousands of dollars saved!
Hope this helps,
Justin
