If you have a car that you want to trade in, it’s important to know what your vehicle is worth. You should also be aware of all fees associated with trading in your car and how much cash you’ll actually receive from the transaction.
Let’s break down these elements step by step so that the process of auto refinancing goes smoothly when you’re ready to trade in your pre-owned vehicle for something new. Let’s get started!
Know the vehicle value
Now that you know the value of your current car, and have an idea of what you can afford to pay for a new one, let’s take a look at how much money you’ll need in cash to complete the transaction.
If you are talking about trading in your car toward a new vehicle purchase and refinancing on that deal, it’s important to figure out if there are any fees associated with this process. These fees may include:
- A documentation fee—this covers any costs related to processing documents such as title transfers or sales tax documents.
- An administrative fee—this covers all other costs like registration, inspections and warranties (if applicable).
Know your total cost of ownership
The total cost of ownership is the total cost of owning a vehicle over its lifetime. This includes the purchase price, maintenance, insurance, and taxes (if applicable). The total cost of ownership is determined by three factors:
- Purchase price.
- Fuel economy/mileage.
- Maintenance costs or repair frequency.
Shop around for deals on your next car
You’re probably going to be looking for a car, right? It’s time to shop around. You should get quotes from all these sources:
- Multiple dealerships in your area (including online ones).
- Multiple lenders in your area (including online ones).
- Multiple banks in your area (including online ones).
- Multiple credit unions in your area (including online ones).
- The private financing companies that advertise on TV and radio or on billboards and bus ads (if you feel comfortable dealing with them).
Prepare your trade-in vehicle
Before you head to the dealership, make sure your car is in good shape. Clean it inside and out (including the tires), check all fluids and fluid levels, make sure it has current registration and plates, check for recalls on both your trade-in vehicle and the one you’re buying, and inspect any body damage or dents in detail.
Once your car is ready for inspection, take it to a mechanic of your choice for an inspection before going to the dealership. If there are any issues with the vehicle that needs fixing before trading in, shop around for prices from local repair shops first—you may be able to get better deals than those offered by dealerships.
Hope this guide has helped you navigate the car trade-in process. Before a big purchase, it’s important to do your research and be prepared for all possibilities. As refinancing experts Lantern by SoFi says, “Remember, none of the pros or cons of refinancing car loans are guarantees. Every situation and every lender is different.”
The more information you have about the process beforehand, the smoother things will go when it comes time for them to happen!