Trade in or sell?

I want to replace my wife’s 2014 Impala with a 2019 or 2020 Impala. I’ve never traded in a car before, or bought an actual new one, so I’m wondering what to expect, and what to do or not do, especially when it comes to trades. I’ve heard that dealers like to manipulate the numbers on either end of a deal to try to make customers think they’re getting what they want. It appears that similar Impalas (2014/v6/85k miles/good shape) are selling for 12 to 14 grand, but carmax/caravana only wants to offer $8500. What should I do?

You will absolutely make more money if you sell, likely thousands more.  If you don't mind waiting for a buyer that is the way to go.  If you just want to drop your car off and drive home in a new one then trade it in but you will take a hit.

Also, for similiar size/money look into a Ford Fusion.  I bought mine new back in June and I really like it, much more than my mother-in-laws Impala.

Pzero is 100% spot on.

Yup. When I went to trade the V in on a FoRS, the dealer couldn't get anywhere NEAR where I wanted to be on the trade value, and I walked in fully willing to take a hit on trade vs. private party trade. Remember, they're looking at black-book or something similar (wholesale price) so they don't lose their asses if it goes to auction.

Used cars are hard to find anymore, and the cash required to buy yours might be beyond some of the private party's cash on hand.  Research and decide on a number, take it to the dealer.  Tell them that is what you expect and see what deal you get.  Also, remind them that if the deal isn't good enough you will be back with more cash and the bargaining will start again.  

This may not work, but selling privately can be a pain.  Not as much fun as it used to be.

While I agree with everyone else, I'll counter by stating that if you still owe on the 2014, trading it in will likely be a much smoother process than paying it off & waiting for the title, or finding a buyer who's willing to work with both you & the lender to buy your car.

Also, the price/value of the car you're getting rid of can make a big difference too. $2k or less - there's plenty of people with that much cash who are ready to buy. But at $5-$10k - that number gets much smaller, and continues as the price goes upwards, especially for appliance vehicles.  Sure, the buyer could potentially get a loan for your car, but if they also need to get rid of a vehicle to buy yours - and especially if it's their DD - then trading in at a dealer starts to make way more sense, even if it's not the cheapest option. 

I would recommend looking at the trade and the purchase as two separate negotiations. 

Be upfront and tell them that you aren't sure about trading it in, so you want to keep the two prices separate. That can help avoid the shifting of money between the new and trade to hide costs.

Also, since you have the Carmax quote you have a point of reference for where the trade might be.  

Keep things separate and if you like the price for the new car, but they don't meet or beat carmax on the trade,  you can always sell to carmax. If you don't keep thing separate, then you'll end up starting over if you go don't trade it in. 

Never talk monthly payments until you have the price nailed down. Then you can negotiate the loan.

Make them show you all the options, including apr and term. They are not required to give you the best terms for you, so they may only tell you about the ones that are best for them. If they won't show you all the options including term and apr, then they are hiding something.  The dealer will also have some wiggle room on the apr with some of the lenders (1/2-1%), and may be willing to use that to help close the deal.

^What this poster said. 

Ask for a number on the trade-in, cost of the car, etc. Don't work on the "We can make your payment X." When I've bought new and used from dealers, I also tell them upfront, "I'll let you handle the financing so you get some there, you just have to match what I can get somewhere else." Don't worry they can.

Even when I traded in my 135 and got the used Mazda 3, their finance guy came back with some 6-7% rate for the loan. I literally responded with, "You see my income, yes? You see my credit score, yes? I can call my bank and have them handle the financing if you want to play games."

All of a sudden it was under 4%. 

I'd also recommend securing the financing privately beforehand, unless they're offering a ridiculously low rate...like 0%
 

And yes, keep trade value and purchase price two separate things.

Beware the "4-square" scam if they start talking "new math." There are videos on youtube about how dealers will try to confuse you with numbers.

They'll also sometimes point out EVERY LITTLE THING wrong with your trade, trying to convince you it's a worthless pile of E36 M3.

Hang in for a few rounds of "let me talk to my manager" disappearing acts, and be prepared to walk.

No Time said:

I would recommend looking at the trade and the purchase as two separate negotiations. 

Be upfront and tell them that you aren't sure about trading it in, so you want to keep the two prices separate. That can help avoid the shifting of money between the new and trade to hide costs.

ABSOLUTELY THIS.

Tell them you may keep the current car, sell it to a family member, etc, and that you are not decided yet.

Negotiate your best deal on the new car with the trade completely off the table.  Once that price agreement is written down - it doesn't have to be signed, it just has to be in writing from the dealer - then ask them what they will give you in trade for the current car.  Make your decision accordingly.

And always be prepared to walk.  For a normal vehicle like an Impala, they need that car off their books much more than you need that particular Impala.

It may depend on your state, but one argument for trading in is sales tax, which depending on the value of your trade can be worth a fair bit of money off the final price of the new car as the trade value is often deducted from the taxable sale price.

Go in knowing what the invoice price is, what they are actually selling for, what financing is available, what payment you are willing to make, etc. Ask the dealer to make their best offer. When they come back tell them what you're willing to pay and tell them if they don't like your offer you'll find somebody that does. I've walked out of 3-4 dealerships. Once the salesman caught me in the parking lot and gave me what I wanted. The other times I immediately made a couple phone calls and found the car I wanted at the price I wanted within a few hours. 

On one of my trips to the dealer I had negotiated a deal on loaded 2001 Silverado for $250 under invoice and ~3% financing over the phone. When we got there we had to wait while they prepped the truck. In the waiting area there was a guy that they had been working on all day sitting there. Every few minutes the dealer would offer him a "deal" on another truck. He kept saying "No! I want THAT truck". They raked that guy over the coals for hours and he finally broke down and bought it way over sticker and with a horrible interest rate. Whatever you do don't be that guy.   

When you trade in your car, you're paying the dealer to sell it for you.  Of course they're not going to give you close to retail for it.  Depending on the laws, it has to be inspected, corrected and guaranteed.  At a minimum, it has to be detailed.  In Connecticut, thanks to the efforts of a not too ethical used car dealer, the owner of the dealership (and only the owner) is required to sign an inspection form. All that cost dollars.

 https://portal.ct.gov/-/media/DMV/20/29/K208pdf.pdf?la=en

Did not read all the responses, but in California trading a car in will impact your tax liability.  If you have $5000 trade in, and are buying a $20,000 car, you pay sales tax on the difference, $15,000, rather than the whole enchilada, $20,000

I just went through this. We bought a new car for the wife, and needed to sell her 2014 Sienna. We would have liked to have traded it in. Christmas time, registration and smog inspection due, no time to deal with tire kickers. Plus we were hesitant to sell a vehicle privately that was more than a typical cash sale. The new car came in 2 weeks early, so we didn’t have time to prep the van for appraisal, but brought it anyway (new car dealer was 2hr+ drive.) We knew the blue book and NADA price ranges for trade in and private party. We were okay with the difference. We even looked up what similar vans were advertised for. We did as mentioned above, negotiated for the new car then asked for a trade in offer as a separate proposal. The offer was on the low side of trade in, but not horrible. We figured we could do better, especially since it was not even prepped like we were ready to sell it. My wife also got requests from local dealers to see it through the KBB site. 

We took it home and cleaned it up. It looked great after a day of detailing, so we were confident that we could get a much better offer. Tried Carmax first. I’ve heard stories of them making good offers, and stories of them lowballing. We got lowballed, well under the number the dealer gave us for trade in. They said that while it was clean and in great shape, not much demand for minivans. Took it to one of the dealers that wanted to see it, and got the same low offer as Carmax. At this point I was very disheartened. I should have taken the first offer! It was much higher, I now had to pay registration, and I spent a day that I didn’t have detailing it.       

I decided to give it a shot and put it up for sale. It was day before Christmas Eve. I figured if we put it up on Facebook, maybe a couple people would want to see it after Christmas. Within a few hours, no less than 6 people wanted to see it on Christmas Eve! We set up appointments. The first guy was serious about buying it, and made an offer that was fair to both of us. We met at the bank, watched as the money went into our account, and finished the paperwork. Fast and easy, and we did much better than what we would have got in trade. Honestly, I probably could have got more for it judging by the interest, but the price was fair and I wanted to sold. Probably a message in there about holidays being a good time to buy a car. 

Toebra said:

Did not read all the responses, but in California trading a car in will impact your tax liability.  If you have $5000 trade in, and are buying a $20,000 car, you pay sales tax on the difference, $15,000, rather than the whole enchilada, $20,000

Illinois just pimped us and made a change.  If you trade in a $20,000 car you only get a max tax decrease on the first $10,000 then it doesn't matter - you pay.  
 

Last year you got the tax decrease on the full amount. 
 

When i traded in the 9-7x the dealer came right in at kbb trade in.  The Avalanche was right there too, even though i tossed old steel wheels on it with 15 year old rubber.  So in 2 transactions that's been pretty accurate for me.YMMV and all that.  Both trucks we traded in I was just ditching before something else went wrong while they still looked good and were still functioning   

I think it depends on the dealer. We wanted a new CX-5 and we went to a "no bargaining" dealer . They were 6-8k below local Mazda retailers.

We came in with an 2006 E350 wagon. The salesman said they do a car search within 50 miles to determine the value of a car. 

There were two within 50 miles. He gave us 13k for the wagon, which was great because the MB dealer said it needed at least 7.5k in service.

In reply to Toebra :

Are you sure California is included in that? I searched, and almost every result said California is not included. But one or two did. I could not find an official answer, including the franchise tax board site. 

In reply to Boost_Crazy :

They may have changed it.  That was the way it was the last time I had any dealings with those filthy leeches.  Anything to generate tax revenue for the state

Toebra said:

In reply to Boost_Crazy :

They may have changed it.  That was the way it was the last time I had any dealings with those filthy leeches.  Anything to generate tax revenue for the state

... and also in Illinois, from what I see here.  

Thanks, Captain Obvious, for reviving a two year old thread.

Patientzero said:

You will absolutely make more money if you sell, likely thousands more.  

Ding, ding, ding!  My 90 year old mother doesn't drive, we use her 2015 Corolla for Dr visits etc. because she can't climb into our SUVs or trucks.  Went back to the Stealersip she bought it from just to sell, it's only got 11, 800 miles on it.  "Too old, leave it here and we'll see if anyone wants it".

Sold it to an appreciative niece for $15k.

ddavidv said:

Thanks, Captain Obvious, for reviving a two year old thread.

I think he was also a canoe captain. Gone now.