If you have determined that it's time to buy a new car, what should you do with your old vehicle? If there is cash value in the car, trading it in may be the easiest and most convenient solution.
The Importance of a Down Payment
When you trade in a vehicle that has cash value, that value goes towards your down payment, and in some cases, may stand as a full down payment.
- Why should you have a down payment? A new vehicle loses value as soon as it is driven off the lot, so it is easy to become "upside-down" in an auto loan (meaning that you owe more on the vehicle than it is actually worth). Putting money down on a car purchase makes it less likely that you will accrue the negative equity that causes you to be upside-down.
- Do you have little or no cash to spare? If you know that coming up with a down payment will be a struggle, or if you are only able to access a small amount, a trade-in may be the answer that you're looking for. The value of your current vehicle can be used in place of, or in addition to, a cash down payment.
- Do you want to improve your approval chances? If you have less than perfect credit, the willingness to put money down/provide a trade-in shows the lender that you are serious about your car purchase.
Better Than a Private Buyer
While you certainly can sell your car privately, this process will be more taxing than simply trading in your vehicle at a dealership.
- Your time has value. Selling a car requires advertising, fielding phone calls, and appointment setting/keeping. Whereas trading in your vehicle when you're purchase your new one requires no additional actions or time.
- You value your privacy. While looking for a buyer, you will need to give out your phone number and meet prospective buyers face-to-face. If you want to avoid this interaction, going through a dealer is a much better option.
- You want a fair deal with no haggling. If getting the actual value of your car is important to you, "negotiating" with strangers who are looking for a bargain may not be the best route to take. A good dealer will take an accurate assessment of your current vehicle and give you a reasonable offer.
Where to Start When You Are Ready to Buy
If you need a better, more reliable car, Drivers Lane can help you get approved for an auto loan no matter what your credit looks like, possibly with little or no money down. You can get affordable financing today and be driving tomorrow with our easy process.
Just fill out our fast and secure online application to get started.