Downsides
There are few alternatives. Finally, you must work with the dealer who owns the vehicle you wish to purchase, and you are limited to whatever trade-in price one dealer agrees to. If the dealer’s trade-in offer is unacceptable, you’ll have to look for another vehicle at a different dealership.
Spend less money. If you want to earn the most money for your trade-in, you’re usually better off selling the automobile yourself, despite the difficulties.
There are no assurances. Once you trade in your car and sign all the papers, the dealership has the legal right to sell it even if the sale for your new car falls through due to credit or another financial difficulty.
Is it worthwhile to trade in your car?
The gap between your automobile’s retail value and its trade-in value is an easy way to determine whether trading in your car to a dealer is worthwhile. For example, if your automobile has a retail value of $12,000 and a trade-in value of $10,500, you’re effectively paying the dealer $1,500 to clean, repair, and sell your car for you, complete with the necessary paperwork and a trip to your state’s Department of Motor Vehicles (DMV). If you don’t think the price difference is worth it, consider selling it privately. If you believe the difference is worthwhile and/or you are unable to sell it on your own, trading in your car is an option to consider.
