The thought of buying a new car is exhilarating, but the realization that you have to somehow get rid of your current one is often not. Do you sell it yourself? Do you trade it? How much can you expect to get? The following tips will help you navigate the process of taking your car to a dealer to trade in for your next vehicle.
(If you’re thinking of selling your car yourself, be aware of any legal requirements. It’s not the same as selling your old kitchen appliances. You’ll find all you need to know about selling a used car in Ontario here.)
1. Research Used Car Prices
The beauty with the internet is that you can research car prices before you head to your local dealer. Don’t leave this until the last minute: a thorough job can take time. When you research prices for your trade-in, include your trim level (e.g., LE, SE); all your options, e.g., 4WD, sunroof, rear-view camera, etc.; your car’s year; odometer reading; and be honest with yourself about your car’s condition.
But remember: the price you’re going to get from a dealership will be your vehicle’s wholesale value, not its retail value. That means you’ll get less than what you see in the listings.
2. Clean Your Vehicle
You’ll read a few opinions on this. On the one hand, a clean vehicle can give the sales rep the impression that you’ve looked after the vehicle, even if it’s 10 years old. On the other hand, proof of your vehicle maintenance is much stronger than a clean car, and dealers will recondition and detail the car before sale, anyway. Also thoroughly inspect it for your personal belongings and remove them.
If you have personal decals on it, remove them if you can do it without damaging the finish. Leaving them on may reduce your trade-in price, because the dealership will spend more time on your car compared to others they receive that are in a similar condition.
3. Bring Along Your Maintenance History
Hopefully you’ve been keeping a folder of receipts and a notebook of dates and work done to your vehicle. The dealer will certainly run a car history on your VIN (vehicle identification number), but that doesn’t necessarily include all the work you’ve had done to your car. Bringing along proof that you’ve looked after your car well can help you get a better trade-in price.
4. Get Several Quotes
Get them in writing and be aware that you’ll likely receive less for the vehicle if you’re looking for a trade-in car for money instead of as part of a new purchase. Having at least two quotes won’t only give you some numbers for comparison, but they will give you some leverage when negotiating your final price with a dealer.
If you’re buying a new car at the same time, though, get your final monthly price after the trade-in and any fees. Some dealerships charge administration fees that may suddenly make your discount much smaller. If you’re deciding between dealerships, get that final, monthly payment for your comparison.
5. You Might Make More Selling It Yourself
Dealers will offer you less than the retail prices you found online because they have overhead to cover, staff to pay, detailing and reconditioning to complete, etc.
Basically, they’ll take your current car off your hands and you don’t have to worry about it again. For many car owners, this is preferable to dragging out their own car sale. (Selling privately usually takes four to eight weeks.)
Besides the convenience factor, though, if you sell your car to a dealer, they take the risk of selling it retail. For example, do you mind if strangers drive your vehicle by themselves? Or do you have the time to go with them?
6. You’ll Get an HST Credit on Your Trade-In
The retail prices you saw in your research may look tempting. However, when you sell your vehicle yourself and then take that cash over to the dealership, you don’t receive any tax benefits.
On the other hand, when you trade in your vehicle at the dealership, the trade-in value is applied against the price of the new car, which lowers the overall tax you pay. If your trade-in is valued at $5,000, for example, you would save an additional $650. (Not to mention you save the costs of having your car repaired, detailed, and pass safety.)
What Can Lower Your Trade-In Car’s Value?
There are many factors that can lower the price of your trade-in. Here are a few:
- The scent of smoke lingers in the car.
- Your car needs major repairs.
- The accessories on your vehicle speak to only a small market of buyers.
- Your car is really old.
- Your trade-in car has high mileage.
- The car has been in numerous accidents.
- There are lots of scratches and/or dents.
- Accessories are not working.
Do your homework, be prepared to negotiate, but also stay realistic: the used car market fluctuates, even the needs of your local market may change from season to season. But investing some time to arm yourself with the necessary information a sales rep needs to properly appraise your car should pay off when it comes to signing that dotted line.
- New vs Used Car to Buy
- All-in Pricing Has You, the Car Buyer, in Mind
- Are You Buying a Used Car from a Private Seller? Or a Curbsider?
- Car Buyer Protection Program: The Motor Vehicle Dealers Compensation Fund
- Accident Disclosure When Buying a Used Vehicle
- Research Liens on Your Potential Vehicle if Buying Privately
- Which Used Car Website Is Best?