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For most people, trading in your car at a dealership is a convenient solution to a problem, especially if you still owe money on it. You simply drive your car into the dealership and they appraise it. This means they inspect and research information about the vehicle - in many ways it is a similar process to yours when deciding to buy a car.
The dealer first determines the wholesale value of the car. This is the amount another car dealer will pay for it, taking into account what they need to spend to bring it up to a sellable condition, as well as the margin they will need when they resell the vehicle. If you owe money on your vehicle, the dealer will find out exactly what is left owing and pay this to the finance company for you. This amount is then deducted from what you actually receive for your car.
E.g., If the trade in value is $7,500 and you still owe $4,000 to the finance company, you receive $3,500 towards the car you are buying.
The alternative to trading in your car is to sell it yourself. While sometimes you will get a little more than the dealer is willing to pay, it does come with some extra work. You will need to photograph the car and list it on a major site like Trade Me. You will then need to make it available for potential buyers to come over to view and test drive. Finally, you will need to negotiate the best sale price you can. If you still owe money on your car, you will need to organise the buyer to pay a portion to the finance company to clear the title and the rest to you.
At Enterprise Motor Group, there is a $3000 Minimum Trade-In on selected vehicles. This means that when you trade in your vehicle you will receive a minimum of $3000 regardless of condition to put towards these cars. What’s even better, if it's worth more than $3000 you will get more too. To find out which cars qualify, you can browse our selection and look for cars which are labelled '$3000 minimum trade-in'.
At the end of the day, it is your choice whether you trade in or not; you simply need to balance
the cost vs the convenience.
For more information about buying a car, request a free copy of our Car Smart Buyers Guide eBook here.