Apart from buying a house, one of the biggest financial commitments people tend to make in their lives is the purchase of a car. Most make use of vehicle financing in order to drive the car they need to go about their daily activities.
In order to lower the cost of vehicle financing, most dealerships welcome trade-ins on the vehicle you are currently driving. A trade-in means the dealership buys the car you are currently driving and that money can be used towards the purchase of your new car as a deposit. Dealerships are interested in buying their clients’ old vehicles as these will form part of their pre-owned vehicle fleet which they, in turn, sell to other interested buyers.
Trade-ins can become tricky to understand, but there are definitely advantages to selling your existing vehicle to the dealership you intend to buy from. In this blog, we set out the main reasons why you ought to consider trading in the next time you buy a new car.
Selling a car can become a huge hassle. Even with all of the information out there for customers to look at, many people will still try to purchase your car from you for well below market value. There are also tons of questionable “buyers” in the market who are looking for unsuspecting sellers to get the better of them. It may take dozens of hours of negotiation and time spent listing your vehicle for sale in order for you to sell your vehicle.
Other than that, you will have to do all sorts of paperwork to transfer ownership of your vehicle if the sale does go through, which in itself can be tedious and time consuming.
If you decide to trade in your vehicle during the purchase process instead, you will save both time and money. Dealerships work with cars on a daily basis and they know how to properly place a value on a used car. Usually, they also handle all the paperwork on your behalf.
When you do a trade-in at a dealership, you will work with one person only. This person is usually also the one who will assist you with the purchase of your new car, meaning they know what your goals are with the proposed trade-in and they are skilled enough to properly assist you in getting the most out of the sale of your existing car.
This is a great option for people who do not want to deal with the stress and trouble of privately selling their vehicle.
At most car dealerships, there are more financing options available when you trade-in a vehicle. Not only that, but the total amount that you have to finance is lower when you trade-in a vehicle. This is because the money you will receive for your old vehicle can be put down as a deposit towards your new car. Generally, because you will then be in a position to borrow less money, your monthly installments will be lower.
In other cases, you might have some money saved up to buy a new car cash. However, with the money you can potentially get from a trade-in, you might just end up not having to use as much of your savings as you anticipated. Especially if you drive a car that maintains its value, you could put down a significant amount towards the car you have your eye on.
If you decide to trade in your car and you have finished your monthly payments including interest and the only thing left from your loan balance is the lump sum, you can pay off your balloon loan with trade-in money.
An authorised financial services provider will assist you in choosing the best time when you can trade in your car which will help get more out of your trade-in and also cover your outstanding balloon payment balance.
Now, refinance isn't the only way you can settle the outstanding balloon amount.
If you don’t have a balloon payment and you have an outstanding balance on the car loan you took out through a registered bank, you can still trade in your car.
If you plan on trading in your car that has an outstanding balance, it would be best to trade in once you have reached your breakeven point. Your breakeven point is when the value of your car is more than the money you owe. Once it’s reached that point you will be able to trade-in and pay off your outstanding balance without taking from your savings.
But if you trade before your breakeven point, you will have to pay off your loan with your own money since the value for the car won’t be enough. It's best to find out from the bank when your breakeven point is.
A trade-in is common practice when it comes to buying a new car. It is convenient, stress-free and usually only takes a day or two to finalise the entire process. Car buyers will end up saving money and time by performing a trade-in at the dealership they are looking to purchase a new vehicle from.
At Fury Mazda Midrand, we offer trade-in deals on all brands of cars. Our skilled sales team walk the extra mile to help ensure that you get the best price for your car and that the money you receive for it is used towards your new vehicle or to settle any outstanding payments you have on your current car. When trading in at Fury Mazda Midrand, U WILL B Satisfied knowing that you’ll get the best deal possible, while driving away in the Mazda of your dreams!
To contact us, simply call 010 492 3700 or click here to visit our website.