Trading in a car isn’t for everyone. You may have a customized car that dealers can’t retail or it could simply be that you hope to get more if you sell your car privately. While many dealerships today offer fair, transparent trade-in values, there’s an opportunity to get more if you sell your car yourself. Easier said than done? Yes, probably.
You’ll get one offer for a trade-in value, and it’s much less than you’ve seen comparable cars listed for online. What gives? Why is there a disparity between the two? It helps to understand what each term means.
Trade-In value refers to the dollar value you’ll get for your used car from a dealership during the purchase process for a different vehicle. It’s typically less than you might see a similar vehicle listed for sale at. When you trade in a car, you’re essentially selling it to the dealership ‘as-is’. They’ll need to inspect, recondition, certify, and detail the car before they can retail it. Otherwise, the dealership sells it to a wholesaler if the car doesn’t fit their inventory needs. The dealership can incur hundreds or thousands of dollars in costs to get a car ready to sell.
Private sale prices usually fall somewhere between trade-in pricing and used car pricing at a dealership. You can usually sell used cars privately for more than the trade-in value, but it requires more work on your behalf. You’ll need to get it inspected and repaired on your own, then take the time to list it, show tire-kickers, and negotiate a fair deal.
How to Find the True Value of Your Car
If selling your car on your own, determining its true value on the private market is a critical first step. Consider for a second if you don’t research its value before putting a sticker price on it. You could be over-pricing it which would result in no potential buyers. Or, you could under-value it and lose money on the sale.
For Canadians, a reliable resource to determine your car’s private is Canadian Black Book. The American equivalent is Kelley Blue Book. It’s named quite literally after a little black pocket book that dealerships receive to appraise car values based on condition. The website works much the same way.
For good measure, you should corroborate this information with other sources like Carfax Car Value Range, and browse sites like Autotrader.ca to find comparable listings.
It can be tempting to overestimate your car’s value when you list it for sale. It’s natural, so you may want to ask a friend to help you make unbiased decisions as you work through it.
If you’re looking for the highest value for your car, which is often the idea behind selling it privately, a little preparation goes a long way. Three things will help you get the best price for your car.
Car buyers want a vehicle they can drive as soon as they complete the purchase, and that includes a safety standard certificate. Every province has its own process that must be complied with for a car to be certified – Ontario’s Safety Standards Certificate, Manitoba’s Certificate of Inspection, and BC’s Vehicle Standards Program are all good examples.
Without a valid, recent safety certificate, buyers don’t know if the car needs any repairs. To give themselves a buffer zone in the event repairs are required, they’ll typically only be willing to pay a lower price to make the deal, if at all. It can not only impact your sale price, but can make or break if you’ll sell at all.
No matter where you live, you need two things when you’re transferring ownership: a valid car title and a bill of sale. The process varies by province for requirements on the bill of sale, so refer to your provincial standards for that.
But should you want to get the best price possible when you sell, you should have additional paperwork prepared, such as:
All of these things give a buyer peace of mind that they’re buying a good car. In turn, they’re willing to pay a better price for it.
Whether or not you took care of your car while you owned it, you need to make it look like you did when you sell it. All it takes is a good cleaning inside and out. Spend a few hours doing it yourself or pay a detailer to give it the once-over. You’ll add hundreds of dollars to your selling price on this alone.
If there’s any minor repairs or maintenance that need to happen, you should probably take care of that before you put your car on the market. While inflating the tyres, changing engine fluids, and any other minor servicing is the decent thing to do, if you decide not to get the work done, a buyer who knows cars will know what jobs need to be done on the car and will use it to negotiate a lower price.
In Canada, there are a few dominant places to sell your car privately. While most offer free listings, it’s a good idea to promote your listing or pay for premium features to get noticed more. Here are three options where you can list your used car for sale.
The long-time leader in automotive listings in Canada, AutoTRADER is still going strong today. While you used to have to pay to list your car for sale in their print magazine, you can list it online for free today.
You can upgrade your listing to Basic, Value, and Premium packages to list your car for longer, add extra photos for more detail, and receive priority listing. Services range from free to around $70.
The most popular marketplace for everything across Canada is Kijiji, and they list cars for sale too. Thousands of people buy a car listed on Kijiji every month. You can add as much detail as you want or as little as you’d like. Options include tailoring your ad to respond through Chat or you can add your phone number to contact as well.
Kijiji Autos is a more focused vehicle marketplace that’s VIN specific, and it lists your vehicle on both sites. Visibility and Maximum Visibility packages are available too at about $25 and $100 per month respectively.
On social media a lot? Facebook Marketplace can get you tons of visibility and help you sell your car quickly. It’s best for low-priced vehicles but can work for any make and model. It’s free to use but is less detailed than both Kijiji and Autotrader, so some of your inquiries might not be high-quality.
When you list your car, give as much detail as you can. Include odometer readings, hi-res photos, custom options, and premium features. And as much as it might make you nervous, offering a test drive can help clinch great deals for you.
If you’re still trying to decide whether to sell privately or trade in, don’t forget about the tax savings to be made when trading in! These savings can help close the gap between how much you get for trading the car in vs. selling it privately.
If you buy a new car at the dealership for $15,000, the taxes on the new vehicle would be based on whatever the province dictates. Let’s use Ontario as an example:
Ontario charges HST at 13% (no GST or PST).
So, 13% of $15,000 is $1950. Therefore, the tax you need to pay on that car is $1950.
But if your trade-in is valued at $5,000, it would lower the amount of tax you need to pay. 13% of $5,000 is $650.
So, If you deduct $650 from $1950, your new tax amount to be paid is now $1300.
As you can see, those tax savings technically boost your car’s trade-in value from $5,000 to $5,650 so now you’re getting closer to how much you would have made in a private sale without the effort of actually selling the vehicle yourself!
As you can see, selling your car requires some effort and planning. If you’re thinking about upgrading your vehicle and don’t have time to sell it yourself, why not trade it in with one of Canada Drives’ certified dealerships? Let the experts worry about the paperwork, detailing, servicing, and resale of your old vehicle while you collect the keys to your new daily driver.
Your online application takes only 2 minutes to complete and we only ask for information we actually need.
Or feel free to call us at 1-888-865-6402