Used car trading is Achilles' heel in the process of car purchase, because it is difficult for dealers to give you the full value of used cars. However, understanding how to trade in and how to collect preferential information will help you maximize the value of trade in and get a better overall deal.

When you discount an old car, the value of the old car is deducted from the price of the new car. In order to get the highest price, you have to know that you can negotiate the trade in value and the new car price separately.

We will break down the replacement process into different steps and show you how to:

What's your trade in price

The first step is to estimate the discount value of your car through the online pricing guide.

With nerdwallet's car value tool, which uses pricing data from the National Association of automobile dealers (Nada), you can answer a few simple questions about your car to see private prices. Then, log in to see the discount range of your car, as well as other information about the cost of your car.

It's a good idea to ask about trade in value from a number of pricing guides such as Kelley Blue Book and Edmunds. These assessment tools will ask for more details about your car. Make sure to include all car options, correct mileage, actual condition level and your zip code to get the most accurate value.

With these numbers, you can set a target discount price range for your negotiation.

Ask for an offer for your trade in

Before you get a trade in offer from a dealer, collect the documents and other items you need, which may include:

Vehicle name (commonly referred to as "pink slip")

Auto loan repayment and account information (if you have an auto loan)

Current vehicle registration

driving license

Keys to all vehicles

To get a quote, call or email the dealer's Internet department. Tell them you want to buy a car there, but want a fair price. They may give you a trade in estimate based on your description of the condition of the car. Most of the used car trading dealers will only give a definite price of trade in after the actual inspection of the car.

Call at least two dealers and make an appointment with the used car trading manager for the trade in assessment. If you have a CARMEX store nearby, you can consider starting with CARMEX to get a seven day no bargain offer.

Choose a provider

In order to get the best deal for your new car, you need to make sure that the trade in value and selling price you get are consistent with the prices listed in the online pricing guide.

Remember, the old for new price is actually just a deduction of the new car negotiation price. So, after the calculation, look for the lowest total price.

Consider the private party price of your car when studying the trade in value and comparative benefits. If that's much higher than the discount, you may decide to sell your car yourself.

Close the deal

When you own your car completely, it's easy to trade your car: the trade in value is deducted from the new car price. Then you use cash or a car loan to pay for the rest of the money to buy a new car.

If you are downsizing and your discount is more valuable than a new car, the dealer will give you a check to settle the difference. If someone owes you money, be sure to write down the exact amount.

Things can get more complicated when you're in debt when you trade in.

If the value of the trade in exceeds the balance of the car loan, the difference (equity) will be included in the sales price of the new car.

But if your car loan is reversed when you trade in, which means you owe more than the value of your car, then you will have to pay the difference when you trade in. For example, if your car is worth $3500 and you owe $4000, you'll have to pay an extra $500.

Here are some suggestions to help you deal with this situation:

Try to pay the difference in cash (negative assets)

Avoid transferring negative equity to new car loans; only when the amount is small

If your car is obviously upside down, consider waiting for you to own the car before selling it