When you have bad credit and need an auto loan, a trade-in can go a long way toward saving you money if it’s paid off or there’s equity in it. Before you trade your car in, follow these simple steps to make sure that it’s in the best condition possible.
Before the Appraisal
In order to determine the value of your vehicle, you have to have it appraised at a dealership. That’s far from the first step you need to take, though. The first step to getting your car ready to trade in is to make sure that it’s in the best possible condition, both inside and out.
This means getting a car wash, vacuuming the interior, and making sure it’s free of trash and odors. If it’s not too expensive, you can spring for a wax or a detail, but a thorough cleaning typically does the trick, and it’s cheaper.
If there are any dents or dings you can fix without spending a lot of money, taking care of them is likely to help. You should also make sure that your routine maintenance is up to date, and your service records are available.
The next step is to get an estimated value by checking online sites such as Kelley Blue Book and NADAguides. Be honest when you’re entering information into these sites in order to get the most accurate estimate possible. Remember, these are only estimates, and the actual cash value (ACV) of your vehicle is up to the dealer.
Determining if There’s Equity in Your Car
Even though these valuation sites only give you an estimate, it’s a good idea to know what these sites offer so you have a starting off point at the dealership. If you have an auto loan, it also gives you an idea of whether or not the car is upside down, and if there’s equity in it.
A vehicle is upside down, or has negative equity, when you owe more on a loan than the car is worth. Luckily, you could still trade in your vehicle if you owe more than it’s worth.
If you're financing a car, make sure you get a payoff quote from your lender so that you can compare what you owe with any trade-in offers. If the ACV is less than what you owe, you have to make up the difference between the vehicle value and the payoff amount out of pocket.
If the ACV is more than you owe, however, you can pay off your loan and use the balance as a down payment, or a partial down payment on the new car.
Getting Your Trade-In Appraised
Now that you’ve done your homework, it's time to take your vehicle to a dealership to see what kind of a deal you’re offered.
It’s a good idea to get your car appraised by at least three dealers so you can choose the best offer. Make sure that at least one of the dealerships is a franchised dealer for your vehicle brand. Once you’ve gotten those offers, you can choose the best deal for you.
Not Sure Where to Start?
If you’re ready to trade in your car but don’t know where to start because you’re afraid bad credit is standing in the way for financing something newer, let us help.
Here at The Car Connection, we work with a large network of special finance dealerships all across the country that have the lenders prepared to help finance people in unique credit situations, including bad credit, no credit, and even bankruptcy.
Start your search for the vehicle you need, and the dealer that can help you get it, by filling out our quick, no-obligation auto loan request form. We’ll get to work connecting you with a local dealership after you do. Don’t hesitate, get the process started today!