As a dealership can help with both of these, we wondered whether trade in or down payment offers the best option for buyers of new cars.
We asked our Georgetown auto loans team to outline whether a trade in or down payment is best when buying a new car.
Is a trade in or down payment better?
In many situations, a down payment is better than a trade in. There are a few reasons for this.
First, trading in at the same time as buying a car can lead car buyers to leave money on the table when combining all the finances together. When you sell a car to a dealership and use the cash, the two transactions are separate.
While the amount offered for the trade in and when the dealership buys the car will be largely the same, it’s easier to get lost within the numbers of a trade in deal.
Second, you can sell your car to a dealership and not have to buy from them. This can work to your benefit.
For example, you’re selling a Kia and are buying a Ford. You would get a better price for your Kia at a Kia dealership than you would at a Ford dealership because that dealership has a ready market for that car.
You can then take the cash, go to Ford and buy your new car.
There will be a little more time and paperwork involved when you sell rather than trade in but you have a lot more freedom to do what you want.
Trading in or selling your car to a dealership
The good news is the process is largely the same whichever way you go.
Prepare your car for sale – Give your car a good clean inside and out and make sure it looks as good as it can.
Make small repairs – If there are small repairs you can make to make your car more sellable, make them. Bulbs, tires, windshield wipers, oil change or whatever it takes.
Dents and dings – While these technically come under small repairs, they make such a difference that they need mentioning specifically. Repair as many dings and scratches as time and budget allows.
Have the car appraised – Make an appointment at the dealership for the appraisal. The appraiser will do their thing, assess the car, take it for a quick test drive and assess its value and condition. They will then make an offer which you can accept or negotiate.
Get paid – Once you accept an offer, we have some paperwork to do to seal the deal. Once the deal has been signed, we’ll get you paid into your bank. Payment will be received often the same day but can take 24/48 hours depending on the day and the banks.
It’s simple to sell your car to a dealership and can make more sense than trading in when buying a new one.
If you need a loan to help buy that new car, you know who to call…
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!