When you’re ready for a new car, you might decide to trade in your old one. A trade in gives you a credit toward the purchase of a new or used car. Plus, trading is typically easier than selling your car to a private buyer, and it can save you time and stress.

If you’re getting ready to trade in your car, there are a few things you should do before you head to the dealership, like research the value of the car and get the car cleaned. You can use our buyer’s guide to help you through the trading and purchasing process of your next vehicle.

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How to Trade In a Car

Trading in your car is relatively easy, but you can put in some extra work to ensure you get the best value for your vehicle. Follow these five steps to trade in your car successfully:

1. Value Your Car

Finding the value of your car is an important part of the trade-in process. When you know your car’s value, it’s harder for dealers to undervalue your trade. You can use online tools, like Car and Driver’s, to find your car’s value based on the make, model, year, mileage, condition, and trim level, and get a realistic trade-in offer.

Other factors such as supply and demand, the time of year, and gas prices can also affect the value of your trade. Having an estimate of your car’s current worth and average sale price can help you negotiate your trade and compare offers to get the best deal. However, know that the trade-in value is usually lower than the actual sale value.

2. Compare Offers

Before you sign an agreement or complete your trade deal, it might be worth having several dealers look at your trade in and give you an offer. Different buyers may offer different amounts for your trade depending on factors like their supply and demand and consumer demographics. You may be able to get more than your car is worth if the conditions are right.

Get a few different offers and evaluate which dealer can offer the best value for your trade in. If possible, get a trade in offer from a dealer that has a new vehicle you want to purchase with your credit. You can even look for car dealerships that offer additional trade-in incentives, such as cash bonuses, lower interest rates, and warranties.

3. Gather the Paperwork

When you trade in your car, you will need to provide the title and registration to legally transfer ownership. Gather your paperwork before you head to the dealer.

You might also want to call the dealer to find out what forms will be needed so you come prepared. Having valid paperwork and proof of ownership for the vehicle can make it easier to perform your trade and can help you avoid delays or fees.

If you’re planning to buy a new car and take out a loan, you should also organize any documentation you may need to establish the car loan. Bring your valid driver’s license and proof of insurance.

If the dealer asks you to provide any tax forms, pay stubs, or bank statements, make sure you have them printed before your appointment. Arriving at your trade or purchase appointment prepared can help expedite the process and get you in your new car sooner.

4. Clean Your Vehicle

Taking the time to clean the inside and outside of your vehicle may increase its value and help you get a better trade in offer. An already cleaned vehicle saves the dealer time and money, which they can pass on to you by increasing the value of your trade-in credit.

You can clean the car yourself or pay to have it professionally detailed. Don’t forget to remove your belongings from the trunk, console, and glove box.

5. Make an Appointment

When your car is ready to go, you can schedule an appointment to complete the trade. Be prepared to negotiate with the dealer to ensure you get a fair value for your car. At this point, you can also shop around for a new car.

If you find one you like, the dealer will apply the trade in credit to the new car purchase, and help you apply for a loan if you want to finance the rest.

Reasons for Trading Your Car

There are a variety of reasons why you might decide to trade in your vehicle. Here are some of the most common reasons to trade in a used car and look for something new:

Expensive Repairs

When your vehicle requires expensive repairs or maintenance, you might decide to get a newer model, cheaper model, or a car with fewer miles. The cost of car repairs can add up quickly, so choosing a different vehicle could help you save money in the long run.


Sometimes, you may want a newer vehicle that offers better safety, design, or performance features. When you’re looking to upgrade, trading in your current vehicle can help offset the cost of the newer one.

High Mileage

If your car has a high mileage, you might decide to trade it in for a used model with fewer miles or a brand-new car with no mileage. You can research the average maximum mileage for your vehicle’s make and model and consider its service history to determine the remaining lifespan.

Benefits of Trading Your Car

Trading in your used car with a dealer can streamline the process of getting a new vehicle. However, trading in your vehicle can also provide you with other advantages, including:

Trade Incentives

Many car dealerships offer special trade incentives that increase the value and credit you receive for trading with them. When dealers have a high demand for used vehicles with a low supply, they offer these incentives increase their stock. Look online for dealerships that offer incentives for trade-ins and request a trade in quote.

Easy Transfers

One of the biggest advantages of trading your car with a dealer is the simplicity. Selling your car to a private party takes time and effort and may leave you open to liabilities or legal issues.

When you trade in your car at a dealership, the sales representatives handle the work of transferring the title and selling the car to a buyer. While a trade deal usually offers slightly less value than a private sale, it can be worth it to save yourself the time, stress, and uncertainty of a private sale.

Lower Monthly Payments

Depending on the value of your trade and the terms of your new car loan, trading in your used vehicle might lower your monthly costs. When trading in a car with a loan, the dealer typically pays off the rest of the car loan as part of the trade agreement. Then, you might be able to lock in a lower monthly payment when you buy a new car with a new loan.

Tax Advantages

In many states, there are tax advantages of trading in your vehicle. Certain states only make you pay sales tax on the principal cost of the vehicle after subtracting the trade-in value. That means you pay less in sales tax because the percentage is based on a smaller amount.

Tips to Increase Your Trade-in Value

Your trade in value is based on lots of factors, like the type of car and the condition of the car. However, you can take additional steps to improve the value of your trade and get the most for your vehicle. Here are some easy ways you can increase your car’s trade-in value:

Provide Service Records

While the dealer may have access to your vehicle’s service records on their own, bringing the information with you during your trade can make it easier to negotiate. By providing the service records, the dealer can see what work has been done and how well the car was maintained over its life. If the car was serviced regularly, it could help you get more money from the trade in.

Negotiate Your Trade

Trade-in offers are usually negotiable (to a certain degree). If you receive an offer that you think is too low, you can try to negotiate for a higher offer. However, make sure you have research or data to back up your argument. You can also use other offers you’ve received from different dealers as leverage.

Offer Extras

Know what extras and add-ons your vehicle has and how they can affect the trade and resale value. Provide the dealer with a list of any recently replaced parts or non-standard accessories. If your car has a special trim level, it may increase its value. Mention anything that can add to its value to ensure you get every penny you can for your trade.

Consider the Time of Trade

Auto sales follow cyclical consumer trends, and the demand for new and used vehicles can fluctuate. If you want a higher trade value, look to trade in your car when there’s a spike in demand. The dealer may offer you more for your trade or be more willing to negotiate because they need new stock to keep up with demand.

You can also consider the seasons and weather that create a higher demand for your type of vehicle. For example, you might trade an all-wheel-drive SUV in the winter or trade a convertible in the spring or summer months. When the dealership has a high demand, they’ll work harder to get your trade and may offer you more for your business.

Trade for a Lease

Not only can you trade in your current vehicle to initiate a new purchase, but you can also use your trade credit to get a lease. Leasing a vehicle allows you to drive a brand-new or nearly new car for several years, in exchange for a low monthly payment. When the lease ends, you return the car to the dealer.

After you trade in your old car, you can apply your credit to the amount due at signing of your leasing agreement. This can make your lease even cheaper, and you might be able to get a newer or more expensive model.

You can negotiate the terms and costs of your lease and factor in the value of your trade to reach a fair agreement. During your trade appointment, ask the dealer to explain your leasing options for your trade.

Trading vs. Selling Your Car

While trading in an old car has benefits, you might also consider selling your used car instead. A private sale often results in a bigger payout, but it requires more work on your end. Here are some of the main factors and differences to consider when deciding whether you should sell or trade your used car:


Selling a car yourself takes time and effort. The process of cleaning your car, taking pictures, writing a description, offering test drives, negotiating offers, and transferring ownership can take weeks or even months. If you have a busy schedule or want to get rid of your vehicle as soon as possible, it may be better to trade with a dealership. The trade-in process is usually much shorter, and the dealer does most of the work for you.


As a private seller, you may encounter some risks. First, you might have to deal with multiple buyers, some of which could be looking to scam you. It’s also possible that your personal information could be compromised if you post your phone number or address online. When you trade your vehicle to a dealer, everything is done though written agreements and legal contracts, so there’s little risk for you.


When deciding whether to trade or sell your car, it’s important to understand what you can realistically get from the deal. In general, you will get more money selling your car than trading it in. However, if you trade in your car, you might get special deals, such as trade incentives or dealership discounts, that make your trade almost as profitable as a private sale.

Headshot of Elizabeth Rivelli

Finance & Insurance Editor

Elizabeth Rivelli is a freelance writer with more than three years of experience covering personal finance and insurance. She has extensive knowledge of various insurance lines, including car insurance and property insurance. Her byline has appeared in dozens of online finance publications, like The Balance, Investopedia, Reviews.com, Forbes, and Bankrate.


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