12 Factors That Impact Your Car’s Trade-In Value

The trade-in, the anathema of the automotive world. Everything comes back to the trade-in. Consumers and sales representatives square off, staring eye to eye: the former wants 15 000$ for the trade-in, the latter stifles a chuckle and says it doesn’t even retail that high! This is the scene currently going on in multiple dealerships all over the world.

For example, somewhere in Vermont:

Client: It only has 34k miles on it, and it is a convertible

Sales Rep: It is definitely well maintained, but remember, this is January, not much call for a convertible in the middle of January in Vermont.

Client: Why?

Sales Rep: Well, something about the snow. To say nothing about the double digit minus temperatures.

**Sales rep makes a few calls**

Used car manager: I don’t want it.

Lewis Used Cars manager: I don’t want it

Johnnie Donnie Autos manager: hmmm, maybe I can get you 10,000$ but I am doing you a favor

Snowy Mountain Automobiles and Trucks manager: look I ain’t buying now, but I’ll give ya 18,000 if ya still got it in March.

**Sales Rep hangs up**

Sales Rep: We got 10,000$…

Client: What?! You people are crooks! I saw some on the Internet advertised at 35 000$! C’mon honey, we’re leaving.

Who is right here? Is the sales representative right that a convertible in the middle of a Vermont-esque January is a tough sell or did he or she not try hard enough? Is Mr. Smith wrong in thinking his car is worth 35,000$? We can tell you that the most likely scenario is that an indignant M. Smith will go home, take pictures of his car, pay to have it advertised on the internet and in papers and magazines; he will likely have to wake up Sunday morning early to go test-drive the car with a total stranger on more than one occasion a stranger who may not even be that interested in buying M. Smith’s convertible. And what does M. Smith DO when the “stranger” offers to buy the car and offers him a personal check? On the other hand, the sales representative has obviously lost a sale because when M. Smith does sell his car, he certainly is not going to return to that dealership. Worst, M. Smith will tell his friends and co-workers about the experience which may translate into even more lost sales. So again, given that the overall result will have unfortunate consequences for both parties involved, who was right in this situation?

From experience, I can tell you that a convertible indeed loses about 10% in retail value in the winter months of northern states and close to 15% in trade-in value over the same period. It also gains 10% of value in the spring in both retail and trade-in value. So in the fictitious case above, it appears M. Smith is at fault and does not understand the market. But the intent of this article is not to point fingers. It’s a story, after all.

The point is to highlight the important factors that determine the trade-in value of a used car. Most of these variables are self-explanatory. car subscription in australia

So here we go, each factor is listed in order of importance. By the time you are done reading through, you should have a clearer idea of what truly affects a trade-in’s value. This will help you plan ahead by taking good care of the car you have now in anticipation for the time where you will want to trade it in. It will also help you buy a new car today that will be a great trade-in candidate in the future. Finally, it will prepare you to negotiate your trade-in’s value if you are currently buying a new car.

Your trade-in’s value is determined by:

1. How well your car’s brand is doing right now.

When SAAB declared bankruptcy, SAAB trade-ins lost at least 40% of their normal trade-in value. Jaguar and Volvo are two brands that are currently struggling (along with many others) in new car sales and this hurts their resale value. Saturn trade-ins are barely worth anything today. It’s simple, if there isn’t a great deal of demand for a manufacturer’s new car, usually there isn’t a great deal of demand for the same manufacturer’s old car. Inversely, BMW, Subaru and Hyundai are on a tear, thereby increasing their resale value and therefore their trade-in value.

2. Season.

Of course, if you live in Florida, the season has less impact than it does in Michigan or Canada. That being said, the net effect percentage wise on a trade-in’s value based on the season is so important we felt it needed to be at number 2. As we mentioned above, the time of year can add or drop between 10 and 20% on a trade’s value. AWD cars and trucks are great trade-ins in the fall, convertibles are horrible trade-ins from August to early-February, Pick-ups usually do well in the spring because home landscaping projects/yard-garage-basement cleanup are on the to-do list. Traditionally, March, April, August, September are prime months in the automotive world for sales. In general, trade-ins fetch higher prices in these periods, though, this varies according to region.

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