Pat Goss' Tips & Expert Advice

Consider Trading In Your Current Car

Most people are shocked when they first begin searching for a new car as prices can seem alarmingly high. Even a basic car, without a lot of flashy extras and accessories, can cost a minimum of $15,000. After determining that you want to buy and can afford a new car, you might be wondering how you can come up with all that cash. While it's always in your best interest to place a healthy down payment on a new car, that down payment doesn't have to be all cash you have on hand. You can reduce your total new car costs by trading in a car you already have. A dealer may be willing to give you an additional deduction from your new car cost as re-selling a used car is one way dealers make money. Even if your current car isn't worth much, find out how much of a trade-in value it has. Sometimes dealers are willing to pay $500 for an old car if some of the parts can be re-used.

If you decide to trade in a car you already have, don't tell the dealer that information until you have begun negotiating a price. Also, take some time (and possibly money) ensuring that your old car looks as good as it can. Clean it well, outside and inside. Additionally, do some research to determine the car's wholesale value so you can get the best price from a dealer.

Another advantage of trading in an old car for a new one is that, in some states, you only need to pay sales tax on the difference between the price of your old car and the new one you are buying. Check the Department of Motor Vehicles in your state to determine if this applies to you.

Sometimes your old car won't have much value to a dealer. If that's the case, you might want to consider selling it yourself and then using that cash to lower the price of your new car purchase.