How to trade in your vehicle and get the best deal, according to the experts

• Trading in a vehicle is now easier than ever with online appraisal tools and services like CarMax and Carvana.
• Factors affecting trade-in value include vehicle age, mileage, condition, and demand, with custom modifications potentially lowering value.
• When trading in, minimize existing debt and consider potential tax credits in your state.
• Supply shortages can create favorable trade-in conditions, making it a good time to get the most value.

It's time to trade in your vehicle. Maybe you want to upgrade to the new, hotter model. Or maybe the idea of selling on your own is too much.

Whatever the reason, you're ready to make a trade. Luckily, making a vehicle trade-in has gotten easier.

"I think these days, one of the nicest things about having so many online car shopping sites is that you can get values from anywhere," said Joseph Yoon, consumer insight analyst at Edmunds. "You can do this all online, it's very easy now to get your car appraised."

Additionally, Yoon said online trade-in services like CarMax, which owns Edmunds, Carvana or the multitude of other used car online retailers are likely to bring strong offers to those looking to make trade-ins.

"Whoever you decide to look up online, you know they have a vested interest in building up their online inventory, more so than new car dealerships," Yoon said.

Making a trade-in can also provide owners with a bargaining chip as they go hunting for a new vehicle. But before you get that far, The Courier Journal, part of the USA Today Network, sat down with industry experts from AAA, Chase Auto and Edmunds to discuss tips for trading in your vehicle. Here's what we learned:

What impacts your vehicles appraisal value?

Several things are considered when determining your trade-in value, including things like vehicle age, mileage and demand for the specific vehicle type.

Additionally, factors like vehicle condition, including any wrecks, under-the-hood damage or cosmetic dents and dings can play a role in appraisal value.

According to Yoon, one of the best ways to retain a strong trade in value on your vehicle over time is to avoid custom modifications "because the car's no longer original, and it becomes a liability."

"If you've modified your car heavily, it's a lot better to sell the parts separately after you put the original parts back on," Yoon said.

David Bennett, senior automotive manager at AAA, said it's important for people looking to trade in to "be realistic to yourself."

"There's very few (vehicles) that are in excellent condition," Bennett said. "We all believe our vehicles are in perfect shape, but it's not; so very few are."

Michael Douglas, head of dealer services at Chase Auto, also advised for vehicle owners to seek out multiple quotes so they can get a more complete understanding of what their vehicle is worth.

Should you trade in for cash or credit toward a new vehicle purchase?

If you're planning to purchase another vehicle, used or new, after trading in, experts agree you want to make sure the debt you carry over from your current vehicle is as little as possible.

"I think whoever is going to give you the most money is the best option," Yoon said.

Douglas also shared that in some states, there is a tax credit that allows for the deduction of the value of the trade-in vehicle from the price of a new vehicle purchase before calculating sales tax, which can help save the consumer some money.

"Something to just to check locally, dealers can typically walk people through that and say if you'd be better off versus selling it outright and maybe using that cash as a down payment," Douglas said.

And while the entire trade-in process can now be done from the tap of a finger on your phone or computer, Douglas said if you prefer to go in person, make sure you head to a franchise dealership for the transaction as they tend to have stronger financial stability.

When should you trade in your vehicle?

Yoon recommends waiting to trade in until the vehicle is fully paid off.

However, if you're unable to pay the vehicle off before you need to trade in, Bennett said to make sure you do so before the vehicle breaks. He also notes that while many people think it's better to trade in a vehicle than make a costly repair, the long-term value for the owner comes from repairing and maintaining the car rather than replacing it.

"It's best to do it when you're ready to, not when you have to," Bennett said.

While much of the trade factors influencing when you should make your trade-in are financial, experts also advise considering lifestyle and future plans or goals that may require a vehicle change.

Douglas said the best time to trade in your vehicle can be when there are ongoing supply issues of used vehicles, like what was seen in 2022 and 2023, because it can encourage the buyer to pay out more for the trade-in.

"Now's still a really good time to trade in your car, get the most value for it," Douglas said.

Contact business reporter Olivia Evans at [email protected] or on X, the platform formerly known as Twitter at @oliviamevans_.