Get three written offers
A real, written offer for your car beats any estimate. Get two or three before you talk to a dealer.
An estimate tells you what a car like yours might be worth. A written offer tells you what someone will actually pay for yours. That difference matters, because an estimate is easy to argue with and an offer isn't.
Getting offers is mostly done online now. Services like CarMax, Carvana and KBB Instant Cash Offer ask about your car's mileage, features and condition, and give you an offer you can take in. Some lenders and credit unions have partner programs that work the same way. A few tips:
- Answer the condition questions honestly. Offers are usually confirmed by an inspection, and a rosy description only moves the disappointment to later.
- Write down each expiry date. Offers don't last forever, so time them for the week you plan to buy.
- Know your payoff. If you still owe on the car, your equity is the offer minus what you owe.
One wrinkle when you compare. In many states, trading in at the dealer lowers the sales tax on your new car, because tax is charged on the price minus the trade. At a 6% rate, a $13,500 dealer trade also saves you $810 in tax, so it's worth about $14,310 to you, which is more than a $14,000 offer from a buyer who can't give you that tax break. Check how your state handles trades before you decide.
Lock the trade-in square to your best offer. It's your floor.
Where it fits in the method
Related in the method
- The walk-around appraisal
- Why they go to down payment first
- Loan-to-value and being underwater
- Bring your own financing