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When you purchase a new car the question of what to do with your existing car always comes up eventually. There are a number of benefits to trading your used car in to the dealership when you purchase the new vehicle.
Help with the Down Payment
The value a dealership assigns to your car can often be used toward the down payment you need to make. Any amount of positive equity you have in the vehicle is put toward the down payment. Basically, whether you own the used car you are trading outright or owe less than the car is worth your down payment is reduced by the dealership accepting your trade. This means you need to have less cash on hand when you want to drive a new car home.
As previously stated, you can trade in your current used car even if you still owe a balance on the financing. Once you trade in the car, the dealership will contact whoever provided the financing or loan for the car and pay the balance. The unpaid financing the dealership pays will be subtracted from the trade-in offer. In the event you owe more than the dealership is willing to pay for your used car, the overage will be added to the financing for the car you are planning to buy.
Trading in your car with a dealership is easier and more convenient than trying to sell it on your own. When you choose to sell your used car privately you need to take on everything that comes with selling a car. Advertising, time spent waiting for a buyer, dealing with the strangers who come to check out the car, and handling payment issues are all part of the private sale of a used car. On the other hand, when you opt for a dealership trade in, you let the experienced professionals take on the sale of your car.
The reasons to trade in a used car to the dealership you are purchasing your next car from make your life easier and save you money in the process. Whether you own your car or are still paying off financing, trading in your used car is usually the best option.