If you have questions about how to determine the trade-in value of your car, when to trade in your car to get the best value, or even understand how a car dealer will determine your trade-in value, here’s a super quick guide that will take you through everything you need to know (and, don’t know you need to know!)
As you hunt for varying financial and car-related options, you can get ahead of the many decisions you’ll have to make, by knowing your car trade in value, and how much you can get for your old car. Then, all that will be left is to decide on the best car, and the easiest and most secure way to trade it into a different car.
What’s my car’s trade-in value?
The trade-in value of any car is the amount of monetary value that you are likely to be able to get if you sell it to a car dealer. It's intended to be the sale price of the car to the dealer, but you need to be aware that instead of just monetary value, you may also be able to negotiate different benefits in your new car contract with the car dealer instead; such as extra services and or better lending rates (if you're financing the new car). These may actually meet your goals better, for example, if you need to have a longer-term car loan, or if you want an extended warranty. These are just some of the negotiating advantages of trading in your car. And car dealers, especially used-car dealers, are very hungry for used cars these days, and that will make your trade-in value work harder for you.
How much is my car worth?
First, you'll need to know what the current market values are, for your make, year and model of car. Start by looking up your car's worth at the Canadian Black Book value site. (Note: very old and or obscure cars may not appear on the site.)
Next, your car’s mileage, compared to its age, is one significant factor in assessing its trade-in value (and whether it’s been mostly driven on highways or on city roads). The average range, annually, is between 18,000 km, and 22,000 km.
Your car’s actual condition, based upon a physical inspection by the dealer, is the next element. If you have maintenance records, you will do better. There are various groups that are starting to offer more specific evaluation-type services, and although they are slowly making headway for consumers and car dealers, a physical inspection is still necessary, even if all the preliminaries are completed online. There are a few other factors that will vary dealer to dealer.
When do I trade my car in to get the best value?
There are many steps to take in finding out your trade-in value. You will need to do research on its general value, prepare records, and your car by making sure it is clean and in the best condition you can.
If you can, choose the fall to make a trade-in with a dealer (if that’s the route you want to take) as you may be in a better position to negotiate. How come?
In order to make room for the following years' models, dealers are more willing to take trade-ins. If you can’t wait until year-end, the same logic applies at the end of every month - they just want to meet their targets.
If you still owe money on your car, remember to deduct that amount from its trade-in value, when you are looking at new financing decisions.
Next, determine the bottom line of your budget, decide on how to pay for or finance your next car. One aspect of a trade in is that you can trade in your current car, for a lower value car.
This means that if your current car trades in for more than a car you're interested in, you’ll end up with a much stronger financial picture at the end of that transaction.
How do car dealers determine trade-in value?
Car dealers have access to the same information you do, as online car assessment tools are constantly increasing and improving. But they also have individual needs, and options, and because those vary, you may be surprised to find very different offers for your car.
The car dealer will be looking to give you just enough to be able to sell your car with a reasonable profit margin. To do that, the car dealer is likely to max out at a wholesale price for your car, in the hope of selling it at a higher retail price.
Another important factor in whether or not the car dealer will even want your car, is the popularity of that car (and how quickly and easily it can be sold), and if there are several other similar cars on that dealer’s lot, there is likely to be less excitement about taking your trade-in.
Should I sell or trade in my car?
Many car owners feel that selling their own used car is a good option. While this might provide you with a decent sale price, there are zero guarantees. Will you have the time, opportunity, and other resources to haggle until you get the best possible price from someone who may disagree with your estimation of the car's value? You may spend a lot of time and a tremendous amount of effort advertising, meeting with potential buyers, going on test drives, and still not get any offers at all. And if you do, it may be a poor offer.
Should you agree to an offer, you're still not done. You need to agree on a secure deposit, and if your buyer doesn't change their mind, you'll need to go and transfer your ownership documents once you've received the fully secured, balance of payment.
Canada Drives can help you with your trade-in
If you're hoping for the quickest, easiest transaction, Canada Drives can help you with your trade-in, from start to finish, making sure you find the car you need, with the budget you have, and the extras you're looking for, all done securely, and for the best price we can negotiate on your behalf.