Reports from Edmunds.com and USAToday that used car prices have risen up to 30% on some models. Surprising, the biggest jumps have been in the larger vehicles such as the Cadillac Escalade. The average price in the U.S. for a used three year old vehicle last month was just over $19,000, or up over 10%. With the lack of new cars being sold across the US and the Cash For Clunkers program, the price of used cars should remain moving up.

It is often said that the movement you drove a car off the lot it will loss 20% of its value. Accurate or not, a car does decrease in value quickly immediately after it is purchased. Around two years after the initial purchase is when it will begin to level off and begins to lose value more gradually.

The two year mark is considered the sweet spot for purchasing used cars, where you get a good car at a good price. Also, the car is usually still under the original factory warranty which provides peace of mind. Buying a car is one of the most important decisions you will make, purchasing it used often provides good car value.

Most people enter into the car buying process with little information on the cost of borrowing money to purchase a new or used car. The cost of an or specificly the interest rate is directly related to your credit rating or FICO score. The FICO score will give you an indication of an estimated interest rate you can expect to pay to purchase a new or used car.
Auto Finance Companies use a FICO score tiering system to determine your credit worthiness and ultimately your finance rate. Terms such as Super Prime, Prime, Non Prime, Sub Prime and Deep Sub Prime are used with correlating FICO score ranges. The below list are estimates of the FICO ranges

Lending Tier FICO Score
Super Prime                                              740 or Greater
Prime                                                        680 to 739
Non Prime                                                620 to 679
Sub Prime                                                550 to 619
Deep Sub Prime                                      549 or Less

The tiers of Super Prime and Prime will allow consumers the best auto financing rates with a few points over prime rate. Prime and Non prime will allow a consumer average financing rates with single digit points above prime rates. The final tiers of Sub Prime and Deep Sub Prime have a large range of rate offering with some ten plus points above prime rate.
The key to understanding Auto Loan interest rates it to determine your FICO score and figure out the tier you are in. From there, you can search the internet for the best auto loan interest rates and evaluate your rate from that point. If today’s rates are 6.25% and you are in the Prime tier then you should get that rate. However, if you are in the Non Prime Category, adding a few points or estimate at 8% to 9% is where you should fall. Sub Prime buyers will have to add a few points on the Non Prime rate and Deep Sub Prime a few more if you can find a lender at all.
Always know where you should fall before visiting a auto dealer. If you do not do the work, you will pay the price in a higher rate. Good car shopping and check out our Used Auto Classifieds sites for your next used car

It can be guaranteed that by the time you’re ready to talk price on the car you’ve selected, the salesperson will have asked you if you’re planning to trade in your current vehicle. You should avoid answering this question until the negotiations on the new car are complete. If you tell the dealer you’re planning to trade in your old car, the dealer will want to lump the two transactions together, putting you at a disadvantage.

Never forget that there are two separate transactions taking place. The first one is the dealership selling you a new car. The second is you selling the dealership a used car. The dealership is the only one who wins by the two deals being combined into one transaction.

The best way to conduct the process is to negotiate the lowest possible price on the new vehicle first, and only then should the trade-in be mentioned. This prevents dealers from working the value of the used car into a more lucrative profit for the dealership by offsetting a higher offer on the trade-in with a higher price on the new car.

Although you will always get more money for your used car if you sell it yourself, if you invest a little time and effort into preparing yourself and your car before you step foot on the dealer’s lot, you can maximize the price you get for your trade-in.

Search for Used Cars For Sale at DriveChicago.com

Remember: first impressions count. It never hurts to spend a little money to have your trade-in professionally cleaned. Providing the dealership with a good impression can help a lot with obtaining a higher appraisal value. Often times a messy car is equated (possibly wrongfully) to a vehicle that has been neglected mechanically.

Also, completing minor maintenance and repairs on your trade-in, such as lube, oil and filter changes offer a good impression at the time of appraisal. Quite often people are led to believe that they should fix every problem with their vehicle before taking it in to the dealership. If the repairs are minor go ahead and fix them. Any major repairs, however, should be avoided. A dealer will take the reconditioning of your trade-in off the price but keep in mind that it cost them a lot less than it will cost you retail. It is better for them to take $500 off the trade-in value for a broken A/C instead of you paying $1,000 to have it fixed yourself.

Don’t forget your tires. Mismatched tires, either by type or by size, take away from the attractiveness of a car and will cause it to take a hit in appraisal value. Also, tires that are worn can indicate poor maintenance: tires that are worn unevenly often indicate that there’s been damage to the frame, or that the alignment is shot either of which will lessen the value of the used car.

The second step in getting the most out of your used car trade-in is knowing its value. You are, in effect, selling your car to the dealership. Just like you would do if you were selling your car to an individual, learning the value of your used car is imperative. This allows you to have a general price a reference point from which you can conduct your negotiations and prevents you from unwittingly accepting a deliberately low offer from a dealer.

When determining your trade-in’s value, be sure to factor in features that may positively affect the price, such as air conditioning, sunroof, CD player/changer, power windows, etc. Remember to also consider conditions that may adversely affect the price such as high mileage, dull or chipped paint, rust, chipped or pitted glass, worn or stained upholstery and carpeting, worn suspension, poor alignment, etc. The most important thing when determining your trade-in’s value is to be honest and not allow sentimentality to cloud your judgment.

You also need to keep in mind you are determining trade-in value (wholesale value) not retail value. The trade-in value of a car is basically the amount someone who plans to resell the car will pay it. The best place to look up your trade-in’s value on line is at www.autosales.com and click the Black Book Appraise Your Trade for Free. These are only ballpark figures because it’s easy to overrate your car’s condition and so many other factors (such as local market conditions) determine what it is worth to the dealership.

Tony French

Automotive Internet Media

The Basics
The truth of the matter is you will almost always get more money for your used car if you sell it yourself. For most people, though, it is often times easier and faster to trade in your vehicle when buying a new one.

However, new car dealers are not only shrewd sellers, they are also shrewd buyers, which is what you are doing when you trade-in a vehicle selling it to the dealership. And, though you will never get the full value of your used car from a dealership, with a little knowledge and shrewdness on your own part, you can maximize the price you get for your trade-in.

Negotiating the Deal
It can be guaranteed that by the time you’re ready to talk price on the car you’ve selected, the salesperson will have asked you if you’re planning to trade in your current vehicle. You should avoid answering this question until the negotiations on the new car are complete. If you tell the dealer you’re planning to trade in your old car, the dealer will want to lump the two transactions together, putting you at a disadvantage.

Never forget that there are two separate transactions taking place. The first one is the dealership selling you a new car. The second is you selling the dealership a used car. The dealership is the only one who wins by the two deals being combined into one transaction.

The best way to conduct the process is to negotiate the lowest possible price on the new vehicle first, and only then should the trade-in be mentioned. This prevents dealers from working the value of the used car into a more lucrative profit for the dealership by offsetting a higher offer on the trade-in with a higher price on the new car.

Although you will always get more money for your used car if you sell it yourself, if you invest a little time and effort into preparing yourself and your car before you step foot on the dealer’s lot, you can maximize the price you get for your trade-in.

-Tony French

Automotive Internet Media