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The Power of a Trade-In

The Power of a Trade-In Your old vehicle is basically a very large coupon that you can trade in for a discount when you buy a new vehicle. If it's worth enough, you may be able to use it as a down payment. Trade-ins are a convenient way to use the car you already own to help purchase a new one.

But it's not all good news. What you gain in convenience with a trade-in, you may lose in price. Generally speaking, you don't make as much from a trade-in as you would selling your car on your own. And doing it yourself might not be as difficult as you imagine, provided you price it reasonably enough, and it is a car that's at least a little bit in demand. But if you don't have a high-demand car or if you're just unlucky, it could be quite a drag trying to sell it. And timing could be a problem if it takes a long time to sell your old jalopy and you need the funds from its sale to buy the new one.

No matter which route you go, you can maximize the financial benefit you get from your old car by sprucing it up a bit. A clean car gives the impression that it's been well maintained. Even if you've never washed the car during the time you've had it, a thorough cleaning of the outside and an energetic vacuum of its interior will make a huge difference when you go to sell it.

Beyond aesthetics, if the vehicle is suffering from any mechanical problems, the price you get for it will probably reflect that. If the fixes are relatively minor, have them done. If they are major fixes, it may not make sense for you to take care of them, but at least consider it.

If you're selling the car, make sure everyone knows it. Get a professional-looking "For Sale" sign and write your phone number large enough for someone to be able to read from the street. If you're so inclined, you can take a sales lesson from real-estate agents and even create a flyer that interested buyers can take home with them.