Looking to get top dollar for your car trade? Do not trade it to a car dealer!

The best financial advisers in the US will tell you that you are losing money the instant you trade in your used car for a shiny new car. The sales people know it, and they will do nearly anything to convince you that your trade in helps you make money on your trade. Its an absolute fallacy and they know it!

If you have five minutes to burn, this will save you hundreds, maybe thousands of dollars on your next car purchase. Please follow along with me to show you how you are being duped.

Lets take a hypothetical scenario of Ms. XYZ cruising up to an auto dealer in her five year old Honda Accord. It has average mileage and in relatively good condition. It has a few paint chips marks on the hood thanks to her daily commute to work, and a slight ding on the passenger side door. Mechanically, the car is perfect but could use four new tires and replacing the brakes. Sounds like a good trade in prospect right? Sure - for the dealer!

Not only did the salesperson think of overcharging Ms. XYZ if she happened to buy a new car, but also looked at her used Honda as a 10% or more profit machine. by fixing it up in the dealer's garage for much less than she would pay, then selling it at auction the dealer can flip the car for a very quick profit. Even better, the salesperson might decide the car is too nice to sell at auction, and is capable of making a better profit by fixing it up, adding a new price tag 25% higher than was paid to her, and later laughing all the way to the bank.

Still don't believe me? Check out the National Automobile Dealers Association's website for the latest rates on your car's estimated value. Take note that this is an estimate based on mileage, mechanical features/problems, and curb appeal. Then take it to your local auto dealer for an estimate. Better yet, if you have time take a look at cars similar to yours on Ebay. Chances are that your car's NADA or Kelley Blue Book estimated value will be greater than the trade in values you received from the auto dealer(s).

Now that you are asking, why do people trade their used car at a car dealership?

One word: convenience! Its simply more convenient for the average consumer to sell their car at the dealership than attempt to sell it themselves. A dealer typically has two tactics when making an offer on a used car. First, the dealer could offer you a bare minimum on your trade and possibly leave the sticker price of the new car you want relatively untouched. The second choice is that the dealer will give you a great trade in value for your car but will raise the sticker price on the car you want. Bottom line, if you think you're getting a good deal because of some cost cuts in one area or got a "free CD player," you are sorely mistaken. Car price negotiations are give and take, they may give you something up front but they're taking away a similar amount you haven't detected that is hidden somewhere in the financing.

Now lets make some extra cash by getting the most out of your car's private sell (not your car's trade). Selling a car is less complicated that you might believe. In fact, the hardest part is getting it prepped to sell. Lets run through a few basics to pass a quick visual inspection.

1. Make sure your car is as clean as possible. This is more than your car wash rinse off. Clean the hubcaps, windows, vacuum the interior, etc. Some Armor All to make everything nice and shiny works miracles too. Find all the little things someone might see and get rid of them to prevent a nickel and dime negotiation in hopes of getting your asking price down.
2. Check the basic fluids and air filter. Make sure the window washing fluid is full, as well as the oil. The air filter might sound difficult, but if you go to any basic auto parts store, just ask one of the clerks for help and he will most likely change it for you.
3. Test all of the car's basic interior and exterior functions. Test the headlights, tail lights, signal lights, hazard lights, wipers, air conditioner, heater, sound system, power locks/windows, and sunroof. If anything is not functioning, you should review the owner's manual to check for a blown fuse. Don't worry, they are very cheap and easy to replace.
4. Toss in a new air freshener. No one is accusing you of stinky feet, but if the car smells appealing will confirm that the car has been well maintained.
5. Show your maintenance records. People rarely do this, but if someone pulls out a small folder of their oil changes for the lifetime of the car, you know its been well maintained. If you have these receipts, by all means show them with pride.
6. If you really want top dollar, purchase a vehicle history report or offer to buy one for free for the buyer if they ask for maintenance history confirmation. Chances are, if you offer to give one to any buyer for free, they will consider you trustworthy and fore go this option.

Time to get your car marketed to the most potential buyers. You can try the local newspaper or a find a website like Craigslist.com, or go even more professional with a site like Autotrader or Ebay (Ebay has more users). Selling a car on a website is easier than a newspaper thanks to the national visibility and the level of detail (i.e. Pictures) that can be displayed for the potential buyer.

These sites will generate far more leads, so if you have a high value used car, be prepared to do some bargaining on your own because you will definitely get lots of interest. If you are inexperienced in car sale tactics, have one of your friends who is experienced in auto sales to assist you in answering e-mails.