Ask Bark: How Can I Get The Most For My Trade?

Mark "Bark M." Baruth
by Mark "Bark M." Baruth

Jonathan writes:

Hi Bark,


In the past, I’ve always bought used in the “golden zone”, i.e. two to three years old with less than 45k on the clock. This has always served me well. I’m pretty good at getting a good deal on this end of the process.

What’s brand new for me is dealing with an existing vehicle I still owe on. Due to a family addition coming along, we’re moving up from this late-model SUV (I don’t want to get too specific, but it’s a GM product) that has about 55k racked up, but is in good shape overall. Tires have tons of tread life, it’s mechanically sound, that sort of thing. We’re moving on to a Kia Sedona; my wife really dug one we kicked tires on. The minivan would be a late-model, purchased used — likely a 2015. Where my kung fu is not strong is in dealing with trading in or selling the existing vehicle.

There’s a lot of moving parts here. First, even going with pessimistic value estimates I’d say we’re going to be $2,500 richer offloading this car, even trading in at the dealer. Second, the vehicle is not beaten up, but does have typical wear and tear and a few non-dramatic dings typical of a city hauler. Third, it’s a popular vehicle that tends to sell well. Although our credit union has a car buyer service, and takes trade-ins, I’m not convinced they’d necessarily give us the best deal on the vehicle. I know any dealer can’t offer what a private party does, but I don’t want to give the car away, either.

Given all that’s going on, how would you ensure the best bang for buck for my trade-in, and is the adage that a same-make dealer would offer more cash generally the case?

Also (and optional, of course, if you have time) I’d be interested in seeing exactly what you’d view as the target price I could realistically hope arriving at for a used Kia minivan. Say the posted asking price is 21k…what should I actually pay?

Great questions! Thanks for sending them in. I’ll try to tackle them one at a time.

Based on your description of your existing vehicle, I’m guessing you have an Equinox or Terrain. If my guess is correct, you’re right — they do sell well. However, their scarcity is low — meaning that there are typically more of them in the markets than there are people looking for them. Despite what KBB might be telling you your car is worth, you’re probably not going to get that for it.

Will you get some more money at a General Motors dealer? Eh. That tends to be more true at Hyundai and Kia stores than at GM stores. An Equinox has real value at most stores because people know what it is. A Sedona doesn’t have the same value at a GM store that it does at a Kia store, because a GM customer isn’t necessarily convinced of the value of a Kia.

However, there can be some serious tax benefits to trading in versus a private sale, based on how sales tax is calculated in your state. This can be worth real money to you. Plus, as our friend Steve Lynch recently discovered, selling a car via Autotrader or Craigslist can be a genuine hassle.

So how can you get an accurate idea of what your car is really worth? There are a couple of ways:

  • You can take your car to your local CarMax and get an offer for it within thirty minutes. They’re surprisingly accurate, and it gives you a good baseline for where you can start negotiations on a trade-in.
  • There are some third party sites that will give you a “cash offer” for your car. The number they give you is somewhat artificially low — think of it as the wholesale value of your car, or what the dealer would get for it at an auction. However, it is a real offer that you can take to a dealer and get a real check for, provided that your car matches the description you entered on the site. This is somewhat of a “worst case” number, but occasionally it turns out pretty well for the customer — it’s actually how I ended up selling my Boss 302 last year.

Now, that all assumes that you’re selling your car without considering the vehicle you’re purchasing. In your case, you’re looking at a Kia Sedona, which is also a low scarcity car. Sedonas sit on lots for a long time. Like, a loooooooooooong time. So the actual trade in number almost becomes irrelevant. They might be able to offer you a higher number than the CarMax number because they have more room to move on their car.

My guess would be that you’re going to be offered a very competitive number on your car if you’re looking at a Sedona if you tell them that you’re focused on your trade number. This is why dealers have used the “foursquare” method for so long — it allows them to figure out what matters to you. If you’re focused on the trade value, they’ll go high on that number, and then turn around and deeply screw you on either the price of your car or the financing.

My advice is this — don’t focus on the trade value specifically. Focus on the overall deal. Dealers rarely operate as a single business unit — the used car manager and new car manager are often at each other’s throats. Sometimes car dealers need to bury the money on the trade, and sometimes they’re willing to go light on the trade but deeply discount their car — it just depends on what the budgets are of the various departments.

As far as what you should pay for a lightly used Sedona that lists at $21K? I don’t know what the trim level or the mileage is, so it’s hard to say. However, nobody should be paying that much money for a Kia Sedona LX, which is mostly what’s on the market. Based on the tools I have available to me, I’d say $19k is a good starting point.

So, to sum up — go to CarMax, get a price for your car, negotiate a fair price for their car, and enjoy your new van.

Got a question for the Barkster? You know what to do. Email him at barkm302@gmail.com or find him on Twitter at @barkm302.

Mark "Bark M." Baruth
Mark "Bark M." Baruth

More by Mark "Bark M." Baruth

Comments
Join the conversation
5 of 100 comments
  • Krhodes1 Krhodes1 on May 05, 2016

    My approach would be to get that floor price from Carmax, then at least make an attempt to sell it privately while you are negotiating with dealers. To date, I have NEVER had a dealer offer me a trade-in price that I could live with. My last two examples being $12K for an '08 Saab 9-3SC that I sold privately for $17.5K, and $11K for a '13 Abarth that Carmax gave me $14K for. Those were on new car purchases, maybe they could do better on used. But on the other hand if you get a great trade-in you probably paid too much for the new-to-you car. Best to keep the two transactions separate, though do keep the sales tax implications in mind, and the carrying costs. For example, had I not sold my Abarth to CarMax the day I did (the very last day the reg was valid), I would have had to spend $500+ registering it for another year, only some of which I could have rolled forward to the next car. And insurance, of course.

    • BrunoT BrunoT on May 06, 2016

      Some dealers do not like to trade for cars outside of their brand, or perhaps certain other brands. They will have to wholesale your car and so you get far less than you might elsewhere. Often, they don't really even know what they have on their hands. Was offered $25K by Infiniti on a low mile rare R design Volvo XC60 that fetched $29K at the Volvo lot, because they knew they could move it fast (new ones were over $50K MSRP). Sure enough, it was gone in a week, priced at (no haggle) $32,000. They made more on the trade than the new car they sold us and we got a better price than any non-volvo dealer could offer. Selling ourselves we would have got maybe $2K more but the tax advantages offset most of that.

  • MazdaThreeve MazdaThreeve on May 05, 2016

    Hooray! Thank you, Bark, for taking my message and answering it. Thou art a wise and learned man, verily. I feel slightly more important than I did when I woke up this morning. The wife will fix that! :) I'm the op in this case. I've been reading the advice in this thread and felt compelled to slap on some deets, in case they're valuable. 1) Since everyone practically guessed it--yeah, it's a Nox. Mid-trim, decent added features. We owe less than 10k on it and the trade-in estimates run from around 12200-12900. Following the advice of a buddy of mine who's been in sales for years, and who swears that kbb always runs high and Edmunds low, I averaged the two trade-in values. This is where I came up with the figure of basically being +2500 in the value of the vehicle less what we owe, i.e. we're in good shape. This is because... 2) I always negotiate based on total vehicle cost. I'm the kind of guy that looks up TVAT values and that sort of thing ahead of time. I don't like any unknowns when I go into the dealership. I always have my financing in place through my credit union, local comps dug up as well but... 3) Dealing with a trade-in is something I've literally never had to do. Hence my humble plead for Bark's advice and that of the board as well. 4) I always detail my cars by hand before I sell them to anyone (in the past I've sold cars private party, just never traded one in). The Nox hasn't had an obsessive clean, but when I visit the dealers she's going to look sharp and my (admittedly limited; we haven't owned this car long) maintenance records will be in hand. I like the idea of selling the car to a private party instead, but I'm concerned about the best way to protect myself if I do that. In the past I've sold old cars to family members I was done with. These were people I could trust. Joe Blow off the street? Hmmmm.... Have I read Bark's advice right? He's basically saying go through Car Max for the whole deal? Or just as a starting point to get a grounded figure for the low end of trade-in value?

  • SCE to AUX JFK used to pronounce Laos as "lay-oss", so I want to call this car "tay-oss". But I'm told by a true VW lover that it's pronounced "ta-owse", rhyming with "house". Maybe VW should rethink a few of their product names.
  • Jalop1991 No Android Auto/Apple Carplay, no car. It's that simple. I always have my phone with me, and it's dirt simple to plug it in and have Spotify continue where it left off. And the maps I want--Waze--are right there.
  • Eric As I would not buy a GM or any other EV the question is moot. As to Apple or Android play, I don't care if the car uses them. I don't use those apps anyway.
  • SCE to AUX I'd want Android Auto.
  • FreedMike They're highly important to me, particularly for navigation.
Next