The time has come. Time to get a new vehicle, that is; whether it’s because you need one or just want one. The big question that crosses most car-buying minds when looking to upgrade or get a new car is, what do they do with their current vehicle? Well, there are a few options. One, you could be super generous and give your old car to someone. Two, if it isn’t in working condition (hence needing a new car) you could donate it to a salvage yard. On the more realistic side of things, your options are to sell it as a private party or use it as a trade-in on your next car. At FFUN Cars, we love helping car buyers find the perfect vehicle from our inventory of amazing used cars, but we also love buying used vehicles from people. Since we are all about providing people like you with information, we’re here to lay out some of the benefits of trading your vehicle in.
What Does It Mean Trade-In?
Let’s go back to the basics of understanding what it means to trade in your vehicle. In the simplest terms, it means you take your current car to a car dealership and use the value of it toward your next vehicle. Sounds great, right? Yes, it is, and it’s probably the easiest way to get rid of your existing vehicle, but, as great as it is, we do have to admit that trading in a car isn’t always the best option. Your goal is to get the most value for your old vehicle and use that against your new purchase and car loan. As much as we want you to trade in your car with FFUN Cars, we understand that the trade-in value isn’t always as much as you could get by selling it privately. We will say with confidence though, that working with a car dealer on a trade-in is far less of a hassle than selling it yourself as a private sale.
Factors that Determine Value
The value of a vehicle isn’t magically pulled out of a hat; there is reason and justification behind a trade-in offer. Rest assured, nowadays you don’t need to go to multiple dealerships to determine the value of your trade-in. We can’t speak for other dealerships, but we (FFUN Cars) make the trade-in process easy and to start, we can give you a fair price with a Kelley Blue Book offer online, in minutes. Of course, if you are a potential buyer and use our online tool, we will need to verify everything in person, but online is a great place to start.
To give people the best market value, we look at the year, make, model, and trim of a vehicle, along with any features it has. In addition to those obvious items, the value is also dependent on the odometer reading, and the condition of the vehicle, including the interior, exterior, engine, tires, and brakes. Lastly, the desirability of your vehicle is taken into consideration since the potential dealership needs to be able to sell it themselves. For example, if you are looking to trade in a convertible, you might want to wait until the summer months, as opposed to the dead of winter.
Get the Max Value
There are ways to maximize your trade-in value, and it starts from the time you first bought the car. Yes, we know, a little too late for that information, but now you’ll know moving forward. Even if you never plan on using your vehicle as a trade-in, you should always keep up with regular maintenance to prolong the life of your car. It is recommended to keep a record of any servicing or repairs done to your vehicle. When it comes time to take your car in for an inspection and to get an official offer on it, make it look as nice and clean as possible, which probably means getting it detailed or taking it in for a final reconditioning. Finally, if you are willing to put out a few bucks, dealerships will always be impressed if you can produce a vehicle history report as it shows that you aren’t trying to hide anything.
Benefits of Trading in Your Vehicle
The idea of trading your vehicle in, and the biggest benefit, is to lower the price you will pay on your next car. Yes, selling it privately (possibly for more money) and using those funds as a down payment on your new car will lower the purchase price. Keep in mind what you would’ve had to go through for a little extra cash, such as countless phone calls, potential buyers trying to scam you, and the accessibility of people. After all of that hassle, yes, you probably got good money, but did you know there’s something called sales taxes on all vehicle purchases in Canada? Hard to believe the government would want to charge taxes, right, especially if you’re buying a used car and the taxes have already been paid once. (chuckles to self). But wait, there is a tax advantage to trading in your vehicle over using funds from a private sale as a down payment. When trading in a car, you only pay taxes on the purchase price minus the trade-in value, whereas if you have a down payment that you are using from the sale of your car, you pay taxes on the total price of the vehicle. For example, if you are buying a $50,000 vehicle and your trade-in value is $20,000, you pay taxes on $30,000. If you take that same $50,000 vehicle and use a $20,000 cash down payment, you pay taxes on the full $50,000. So, before you get insistent on selling privately, we suggest you do some research to see what you could get for a trade value versus privately selling and then do some math on the taxes; you may realize the spread isn’t as big as you thought.
Before Trading it In
Before you rush down to the dealership (uh um, FFUN Cars), take some time to do a few things. Find out what your vehicle is worth and what people are selling similar models for. If you are financing your vehicle, call the lender and see how much you still owe on it and what the buyout amount is. If you owe more on the vehicle than what a dealership will offer you, it puts you in a negative equity situation which adds to your new loan, making your monthly payments higher, unless you can secure a super-low interest rate. As mentioned above, get the vehicle ready to be shown. Don’t settle on the first offer; ask around and see what other dealerships are willing to give you for a trade-in value.
If all this information seems overwhelming, you can start by contacting us at FFUN Cars. No, we aren’t just another sleazy car dealership wanting to make a bunch of money off selling you a car. Yes, we want to sell you a car, but at FFUN Cars, it’s about you. It is so much about you that our “salespeople” are non-commissioned so they can focus on finding you the right vehicle. Plus, we know how valuable your time is, so we will have you in and out in one hour or less; just one of the amazing benefits of buying (or selling) your next car with us. You can start shopping now (online) by browsing our inventory, or by reading up on all our benefits; just to make sure you are fully convinced that we are the best place to buy your next car.
