Your Present Car - Sell it Outright, or Trade it In?
Just because you're tired of your present car, or it's just plain tired, doesn't mean it doesn't still have value. Most people either sell their current car and use the proceeds as a down payment, or turn their car in to the dealer to reduce their cost for a new vehicle. Trading-in tends to be a lot easier than selling it yourself, but you'll most always get a lower return on your vehicle for this convenience. Selling your car outright will usually give you a better overall deal.
If you choose to sell your car to another private party, it's in your best interest to do make a few presale preparations. Whoever buys your car will appreciate it too. Before you set a price, find out the book value of the car, taking into account the mileage, options, and its overall condition. You can find out how much it's worth by asking your Credit Union Loan Officer, or looking it up yourself in the N.A.D.A. Blue Book or on one of several web sites specializing in the car information. Setting a reasonable price will draw more perspective buyers to your car, and you'll sell it faster.
Before you show your car, spiff it up. Wash and wax it and give the interior a good cleaning. Change the oil to show you maintain it well. Have a mechanic look it over and let you know what it may need to be in tip top shape. Gather up any repair and maintenance records so buyers can see what's been done to the car over the years. A buyer will place greater trust in you if you present a good clean car, repair receipts and recommendations for possible future repairs. That trust can turn into a faster sale for you.
Trading It In
If you decide to trade, you'll want to make many of the same preparations to get the highest trade in value for your car. Look up its value, clean it up, change the oil, find out any necessary repairs, and bring your receipts. The dealer, like any buyer, will appreciate your honesty and make it easier for you to deal. The dealer will likely offer you a standard trade-in value, or even wholesale value, for your car. They'll in turn make their profit by reselling your car for closer to retail value to it's next owner. The sad truth is that most vehicles, even those that are super-clean with low mileage, depreciate over time. So don't be surprised if the dealer's offer isn't as high as you'd hoped.
On the other hand, feel free to negotiate the price on your old vehicle. Make offers and counter offers as you would with your new car. Above all, try not to let the dealer know you'll be trading before you have negotiated a price, in writing, for your new car. First, negotiate the lowest price for your new car. Then, negotiate the highest price on your trade in. A little wheeling and dealing during this critical time of the buying process can save you big bucks in the end.