Determining Your Vehicle’s Trade-In ValueApr 1st, 2019
In a lifetime, the average person uses thirteen cars. Seems like a lot, but car enthusiasts or those a little more accident prone than others, tend to boost this number up for the rest of us. In most cases, what people do is to trade in their old one, perhaps add some cash to it, and buy a newer or better one. Although you tend to benefit more in terms of price when you sell privately, there are several other benefits of trading your car at the dealership. One of the major advantages is convenience. When you trade-in at the dealership you won’t have to worry about advertising, neither would you have to set up test-drive meetings with strangers. This also saves you from the disappointment of having a buyer back out of a deal at the last minute.
Before You Trade-In Your Vehicle…
Before you decide to trade-in your car to a dealership you must be prepared as this could be a daunting process. Some salesman are devious in their dealings, trying to make the most profit out of you by offering you much less than what your car is actually worth. This varies from dealership to dealership, and at DriveNation we stick to live market value pricing, both in our sales and in our purchases. But to avoid this pitfall altogether, what you can do is know your vehicle’s value before you step into that situation. This would only be possible through proper research. When you are armed with facts, you can easily walk into any dealership and negotiate beneficial terms for your car.
How Will The Dealership Calculate My Vehicles Trade-In Value?
Aside from carrying out proper research, there are certainly other ways by which you can boost your vehicles trade-in value. But before you know how to get the most of your car at a trade-in, you need to know what criteria dealerships consider when determining your vehicle’s worth. Below are a few of these key factors
The year of manufacture of a car plays an important part in determining its trade-in value. The newer a vehicle, the higher the offer will be. Used car shoppers are usually more attracted to newer models, hence dealership tends to pay more for those in anticipation of quick sales.
Make and model
The make of a car is another term for its brand, some examples include, Ford, Toyota, Honda, etc. Cars made by reputable brands which depreciate slowly and are in high demand will have a higher trade-in value. The same idea goes for the model. Different models made by the same brand will have different trade-in values. This is because these models will hold or lose value at different rates. The models that depreciate slowest will receive a better appraisal.
Mileage is yet another important parameter. As the number on your odometer goes up, the trade-in value of your vehicle goes down. Regardless of the pristine condition of your car, a high mileage will make a buyer think twice. Similarly, dealership won’t pay as much for a vehicle that has lots of kilometers to its record.
The class your car belongs also impacts its trade-in value. Most dealership will pay more for SUVs as these are currently in high demand.
There are some cars that you just can’t help but love, such cars stay evergreen and ever loved. A good example is the Honda Civic, which is the best-selling car year over year. Such cars will be well received by dealerships.
For a lot of reasons, the condition of the vehicle is about the most important factor that determines trade-in value. A vehicle with excellent exterior and interior appearance will command greater trade-in value as compared to a rickety vehicle.
How To Increase Your Trade-In Value
Now that you know what determines your car trade-in value, next is to seek ways to improve your car trade-in value.
Carry out proper research
Before you head off to the dealership let Google be your friend. Certain websites such as Canadian Black Book or even dealership websites that use a similar valuation type tool will allow you to see what the average trade-in price for your car is, this way you will know if the offer presented to by the dealership is fair or not. All this valuable information is available online, and since car value varies from place to place, be sure you’re finding similar values in your local market. For instance, if you’re from Edmonton, look up similar vehicles there, not necessarily in another city like Vancouver, BC.
Know how the dealer thinks
Next is to know how the dealer thinks. It is important that you know that the dealership is as interested in buying your car as you are in selling it. Why? Because dealership typically make more money from the sale of used cars than what they get from selling new ones. It is usual for a dealership to argue that they would be responsible for reconditioning the vehicle, but regardless of all that, they still make an appreciable profit. Unless, of course, your vehicle is a bucket of rust. You should also expect some tough negotiations, with so much information available on vehicle prices, a dealer’s offer is often set in stone and very fair. Though it may not be personal value you put on the vehicle, the market truly dictates its sell price and after all dealers need some additional compensation for saving you the time and hassle of selling the vehicle yourself.
Trade-in and new car transaction should be treated separately
It is common for most people to want to reinvest the proceeds of a trade-in the purchase of a new car. If that is the case, it is important you draw a clear line between the two transactions. If the two transactions are mixed, the salesperson bump the price on one vehicle or the other in an effort to make additional commission. All of the variables associated with new car purchase such as down payment amount, finance rate, and new car price should be negotiated separately.
Explore multiple dealership options
It is important that you know that the demand for certain vehicles varies per location and the vehicle present on the lot of a dealership can affect their trade-in price. Therefore, you should explore your options at multiple dealerships. You can also use the offers from multiple dealerships as leverage during negotiations.
Though this demand can vary if a particular dealership is out of inventory on your specific model type, the market price will dictate your trade-in value between a hundred to a thousand dollars, give or take. Moral of the story, if you come armed knowing what your value is, you’ll be able to worry more about the new vehicle you’re going to upgrade to and get invested in that excitement. And that’s truly what a car buying experience should be all about.