Advantages of Trading in Your Vehicle
With a great selection of new and used cars at the Federico CDJR showroom, we get a lot of trade-ins from happy owners of new vehicles. Trading in your current vehicle on a new model or a used car with relatively low miles and lots of great life left in it is a great way to upgrade your transportation without costing too much money.
If your current vehicle is not cutting it but you are unsure whether or not to trade it in, the following can help you to decide.
Trade-Ins Maximize Vehicle Values
The most obvious reason to trade in your current vehicle is the oldest one: You want to get rid of it for a better one. Instead of spending time and money to maximize the potential selling price on your current vehicle, you can just trade it in on a new model and lower the purchase price.
You save a lot of time and money on maintenance, repairs, and detailing of your old vehicle and can get rid of it for about the Kelley Blue Book trade-in value. And you get a new vehicle at a much lower price without having to pay off the existing loan on your trade-in.
Easier to Combine Loan Balances
Many people finance new vehicles, drive them for a couple of years and then trade them in on new models. If the trade-in value is less than the payoff amount on the car loan, that usually is not a problem. Many lenders are more willing to add the remaining debt owed on an existing loan on a trade-in to the loan for the new car. That is especially true if the trade-in value lowers the new vehicle’s purchase price to well below its equity value.
No Tax on First $10,000 in Trade-In Value
Illinois levies a 6.5 percent sales tax on vehicle purchases. That can add up to a lot of money very fast when you buy a new car, pickup, SUV, or van. You can reduce the tax on your new vehicle by the value of your trade-in.
Illinois allows up to a $10,000 trade-in reduction in taxation value when you purchase a new or used car. Many local communities likewise levy taxes on new-car purchases, and the trade-in value helps to knock a significant amount off of the potential taxes owed.
Offset Depreciation Costs
When you drive a new vehicle off the dealership lot, it loses a lot of value right away. A trade-in helps to offset new vehicle depreciation costs by reducing the total purchase price. When you can knock off potentially thousands of dollars in initial purchase costs by trading in a vehicle that already has given you plenty of good transportation service, that is like eliminating the depreciation cost of trading up to a new model, which saves potentially thousands in new-car ownership costs.
Lower Auto Insurance Rates
If you finance a new or used vehicle, you have to carry collision and comprehensive insurance coverage as well as liability protection. That can add a lot of monthly costs to your vehicle-ownership costs. The trade-in value greatly reduces the financed amount on your vehicle, which means you can lower your annual insurance costs by carrying a policy with a larger deductible and that more readily fits your auto insurance needs and budget.
How to Maximize Trade-In Value
Vehicle condition makes a big difference on the value it draws when you sell it as a used car or when trading in on a new or newer used model. If you have a vehicle with a clean body, good engine and that is in generally good condition all the way around, a simple wash and minor detailing could add a significant amount of value to your trade-in. Some minor maintenance, a quick wash and wax, and running a vacuum through the interior adds to the appeal of a trade-in.
You also can maximize your trade-in value when you buy a certified pre-owned vehicle instead of a new car. New vehicles have relatively small profit margins, but trade-ins offer a lot of potential for good profits at a good dealership like Federico CDJR. That makes it a lot easier to maximize the value of a trade-in on a certified pre-owned vehicle that runs just as well as a new model.