The Surprising Value of Your Trade-In Vehicle

When buying a new Kia vehicle, consumers are often unhappy with the value they receive for their trade-in. The trade-in value is typically lower than the market value of the vehicle because dealerships have to account for the expenses involved in selling the vehicle and making a profit. However, there are several factors to consider that may suggest the value of your trade-in is higher than you think.

1. Trade-In values have continued to increase

In recent months, the value of pre-owned vehicles has risen significantly, leading to an increase in trade-in values as well. While the market value of your vehicle will still be higher than the trade-in value, the gap may not be as wide as you initially believed. Receiving a higher trade-in value can save you the hassle of selling your vehicle privately and could potentially provide the exact amount you were looking for.

2. Tax advantages of trading-in your vehicle

One often overlooked benefit of trading in your vehicle is the tax advantage it provides. When you trade in your vehicle, the value is applied to the next purchase before taxes are calculated. In contrast, if you sell your vehicle privately, the proceeds are considered as a down payment on your new Kia vehicle or your pre-owned Kia which is calculated after taxes. This means that the value of your trade-in vehicle is effectively worth the dealership's offer plus the tax savings, which helps to narrow the gap between trade-in and market values.

For example, if you are buying a new vehicle that costs $30,000 + tax and you receive $10,000 for your trade-in, your new vehicle will cost $22,400 ((30000-10000)*1.12). If you get $12,000 for your vehicle by selling it yourself, your next vehicle will cost $21,600 ((30000*1.12)- $12,000). The difference, in this case, is just $800, which isn’t a lot considering you are liable for any problems with your vehicle after and you have to spend quite a bit of time and resources selling your vehicle.

While the trade-in value of your vehicle may not always reflect the market value, it may be higher than you initially thought due to increasing pre-owned vehicle values and tax advantages. Trading in your vehicle can provide convenience, financial benefits, and peace of mind for those looking to purchase a new vehicle. To learn more about how the trade-in process can work in your favor, don't hesitate to contact us today.