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  • Trading in your vehicle is quicker than finding a buyer. You’ll also save money on advertising and tax.
  • Your vehicle will be assessed before a trade-in price is offered. Make sure to get repair estimates (if needed) before going to the dealership.
  • It’s best to do purchase and trade-in negotiations separately.

Thinking about selling your old car and switching to a new one? You’ll most likely have to choose between finding a buyer on your own and trading in your vehicle at a dealership.

Let’s delve into the advantages of trading in your vehicle to help you decide.

Advantages of Vehicle Trade-In

Here are some of the known advantages of trading in your vehicle:

Tax Advantage

In some states, trading in your vehicle means paying less tax at the dealership. In Washington, for instance, the value of your trade-in is deducted from your total purchase price, reducing your tax liability.

Before deciding to trade in your vehicle, make sure to check your state’s tax laws.

Quicker Transactions

Aside from reducing your tax liability, trading in your vehicle will also be quicker than trying to find a buyer yourself. That’s because the dealership will handle everything for you.

Trade-in transactions are usually done in just one day, so you can bring home your new car in no time.

man trading in his car
Aside from reducing your tax liability, trading in your vehicle will also be quicker than trying to find a buyer yourself. That’s because the dealership will handle everything for you.

If you sell your car to a private buyer, you will have to prepare all the paperwork. There can also be a lot of back and forth during negotiations, prolonging the process even more.


People selling their vehicles for the first time must be very careful about getting scammed. You’ll most likely talk to a lot of potential buyers—some of whom you might just be talking to online. If you’re not careful, you might expose yourself to fraudulent schemes like forged cashier’s checks, invalid wire transfers, and counterfeit bills.

Trading in your vehicle will allow you to get a reasonable price for your old vehicle without sacrificing your security and peace of mind. The trade-in process at well-known dealerships is usually straightforward and safe, so there’s less reason to worry about fraudulent transactions.

No Need for Advertising

Gone are the days when you’ll have to spend a lot to advertise a certain product you’re selling. There are many free platforms like Craigslist and Facebook Marketplace where you can create listings for selling a vehicle without requiring payments.

Despite these platforms being free, you’re going to need to spend time creating your post, adding descriptions, and responding to inquiries.  If you’re not the type who can spend time on these things, trading in your vehicle can be the best option for you.

No Detailing and Recondition Costs

A private buyer will expect a fresh and clean car. You’ll have to spend money detailing your vehicle. You might even spend more than a hundred bucks trying to make your ride’s interior look good.

Meanwhile, dealerships will take your vehicle as it is. They will handle all the reconditioning and cleaning needed. The cost will be factored into the trade-in value they’ll offer you, so you won’t have to pay for anything upfront.

Can I Trade In a Vehicle With an Outstanding Loan Balance?

Trying to sell a car with an outstanding loan balance can turn off potential buyers. What’s good about trade-in is that you won’t have to pay off your existing loan in full.

Dealerships will usually manage the loan settlement as part of the trade-in process. They will usually make arrangements for you to make paying your loan easier.

What Happens During a Vehicle Trade-In?

The exact trade-in process can vary depending on the specific dealer you’re transacting with. But generally, here’s how a vehicle trade-in process is done:

Vehicle Assessment

The process will usually start with a vehicle assessment. The dealership will evaluate your car’s condition to determine its market value. This value will usually be based on a lot of factors including mileage, age, and overall market price.


If you do not agree with the offer, you’ll usually have a chance to negotiate your trade-in price. Make sure to research your car’s value beforehand. If you have time, you can use online valuation tools from sites like Kelley Blue Book and Edmunds. These sites can also estimate your car’s trade-in value.

Time for Paperwork

Once you’ve reached an agreement, the dealership will prepare all the paperwork including those required for the new vehicle you’re purchasing. The trade-in value will be deducted from the price of the new vehicle.

Make sure to read everything before signing. Look for add-ons or hidden charges that were not agreed upon.

Turn Over Your Car

After you’ve signed all the paperwork, you can turn over your old car’s keys. Make sure that you don’t leave any personal belongings inside your car. Your dealership will now handle your old car, and they’re going to prepare it for reselling.

Drive Home With Your New Car

Once everything is cleared, you can take home your new car. Before leaving, check the vehicle for any obvious faults.

Tips for Negotiating When You Trade In Your Car

Here are some tips to keep in mind if you want to secure a favorable price:

Get a Repair Estimate Beforehand

If you think your car needs repairs, you can get a repair estimate before going to the dealership. This will give you bargaining power once the dealership’s estimator assesses your vehicle and starts deducting repair costs.

Do Purchase and Trade-In Negotiations Separately

Experts suggest finalizing the price of the new car before discussing the trade-in allowance. That’s because mixing the two will give the salesperson more opportunity to manipulate the prices. You might get a good deal for the trade-in but you might end up paying too much for the new car.

Don’t Be Afraid to Walk Away

If you don’t like the offer, remind yourself that you can always walk away. That’s if you did not sign the contract yet. If you’re not in a hurry, you can compare offers from different dealerships to help you decide.

Letting go of your old car can be difficult, and finding a new replacement can present its own set of challenges. When selling a car or trading it in at a dealership, always make sure your rights are protected and ensure a fair deal.

About The Author
Written By Automotive and Tech Writers

The Research Team is composed of experienced automotive and tech writers working with (ASE)-certified automobile technicians and automotive journalists to bring up-to-date, helpful information to car owners in the US. Guided by's thorough editorial process, our team strives to produce guides and resources DIYers and casual car owners can trust.

Any information provided on this Website is for informational purposes only and is not intended to replace consultation with a professional mechanic. The accuracy and timeliness of the information may change from the time of publication.

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