One thing many car buyers look forward to is the ability to get a good deal on their vehicle's trade-in value. But when a car is brought to the dealer when it is time to trade it in, buyers often get a lower price than they expect. We've researched all the ways you can sabotage your car's trade-in value, read ahead to make sure you avoid these mistakes.
As much as we'd like to blame this on shady dealer practices, that's not always the case. Yes, it's good to assume the dealer is trying to chisel down the trade-in value of your current car, or the price of the new car, but that's not the only factor. There really are things that could hurt the value of your trade-in, and it's a lot more than just miles or wear-and-tear.
1) Your driving could affect your car's value
Let's get the obvious out of the way – yes, miles affect the price of cars. The more the miles (and if there are any previous owners other than you), the less you'll be able to ask for the car.
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But miles are only part of the story – how you drive has a great impact on the value of the car as well. If you peel out of every green light, brake hard, drive full-speed over potholes, or generally drive aggressively, your car is going to show signs of wear-and-tear. And don't think it will go unnoticed. Before a dealer commits to a trade-in value for your vehicle, they research and inspect the car, and can discover things like worn brakes, shocks, and bushings.
2) Maintain your car to maintain its value
Consider too, that the car may not be running clean if it has not been properly maintained either. The catch-22 here is that even if you have made plenty of repairs to keep the car looking in top condition, it will show up on a vehicle history report. Yes, it is good to see routine maintenance, but some repairs may show up as well.
Accidents and the major repairs associated with them are preferably avoided. That is obviously an understatement, as the well-being of the driver and occupants are more important than the value of the car. But the same aggressive driving that can result in extra wear-and-tear is also the kind of driving that can increase the risk of an accident. If the car is totaled, you obviously can't trade it in or sell it. But even if there is a record of the car being in an accident, it will severely impact your trade-in value.
3) Stick to the status quo
But other factors impact your trade-in value, and they come into play well before you ever take that first car home. The rarer a car is, from a body style, color, or options standpoint, can really hamper trade-in values. As automotive enthusiasts, we sometimes praise individuality and vehicles that march to the beat of their own drum, but in reality, those unique choices hurt overall value. Trade-in value is all about residual value for the dealer, and that is dictated by how likely it is that the dealer can resell your vehicle for a profit. This is called residual value, and many things dictate this number. We mentioned the driving behaviors that can influence residual value, but the type of vehicle, and the way you option it, can greatly impact its value as well.
The family sedan has long been one of the most popular vehicles on the market, so choosing a sedan is a sensible option. Pickup trucks are also popular, but they endure a lot of wear-and-tear, so it's possible you won't get as much back on a trade-in. In fact, if you use a truck for work duties, you can pretty much kiss away any decent money when it's time to trade it in. Things like towing and plowing put serious wear on a vehicle, and the dealers know this.
As popular as family sedans have been, cars are quickly being usurped by crossover SUVs in terms of popularity. This is a relatively young vehicle segment, and some of the pioneers of the crossover market (like the Pontiac Aztek) are not nearly as competent vehicles as late model crossovers. A 3-year old crossover is a quite competent vehicle and would make a strong candidate for a trade-in. If you go for a rare vehicle type, like the Nissan Murano CrossCabriolet (pictured above), you might not get back much when you trade it in, as it is a vehicle lacking in demand.
4) Be mindful of trim and package selections
It's not just the vehicle choice, but the way you spec it out. Studies have shown that the most popular colors for cars are typically, beige, silver, and tan. Automakers offer some unique colors, like a purple Dodge Challenger, or a bright orange Toyota Tacoma, but how popular would that option be on the second market? It may not be the best choice.
Rare off-road trim packages or specialized equipment also make for unpopular options on the second market. Consider engines as well – a diesel engine might be the most fuel efficient on the lot, but it when it comes time to trade it in, its rarity, and the stigma associated with the diesel emissions scandals that have been in the news of late, can significantly drive the price down.
Even without such headline-grabbing story lines, a unique drivetrain choice can impact trade-in value. Consider that the first wave of popular hybrids and electric vehicles are still out on the road – and some have not been returning the same range as when new. This drop in range (or even the perception of drop in range) has buyers wary of going for a used hybrid or EV. If you own one of these, you might be better off driving it into the ground than trying to get anything for it at the dealer.
5) If you personalize your car to fit your needs, it might not fit someone else's
Finally, any aftermarket options and modifications are a surefire way to sabotage your trade-in value. As the concept here has been keeping things on your car looking like other cars on the road, doing things to differentiate it will hurt its value. Custom decals, body kits, and other modifications will tank a vehicle's trade-in value. If you do decide to make custom changes to your vehicle, make sure you can undo-them and restore the vehicle back to factory-spec before attempting to trade it in.
The choices that lead to a solid trade-in value are also the ones that lead to blending into the crowd at the parking lot – but there's a reason for that. Those cars are popular, and thus homogeny and blandness are a good thing from a practicality standpoint. Ask anyone in the insurance industry, and they'll tell you – the boring decision is likely the most fiscally savvy decision. Popular paint choices, popular makes and models, and minimal variation are all the best ways to get the most when it's time to bring your car for a trade-in.