What’s my trade worth, and how did you get to that number Mr. Dealer?
April 11,213
Wayne Carter
What’s my trade worth? We get this question all the time. About 50% of our customers have a trade in to use, and even if a customer isn’t trading in, they are often curious about the value of their current vehicle. A proper market valuation of a vehicle isn’t rocket science, but you do need some appraising tools, some knowledge of reconditioning costs, and know the market supply (demand).
Canadian Black Book is one source for getting a pretty good start on the basic value. From there, you can ask a reputable mechanic or dealership to give your car a mechanical ‘once over’. Many shops will do this for a modest fee, usually an hour’s labour cost, and will provide you with a written estimate to bring your vehicle up to ‘certified’ status, meaning it will pass the provincial standard for safety, and qualify for selling privately. Next, spend some time scanning the web for cars similar to yours listed for sale. Be wary of the super low and super high listings. Take an average of these asking prices and determine where your car would fall. Is yours perfect, fully certified with great tires, complete service history, no accidents (with a Carproof report to back it up), clean as a whistle and not a ding to be found? Or is it on the other side of that, with an accident repair, excessive wear on the interior (think well used family vehicle with the obvious evidence of kids being kids!) or maybe you didn’t go through the trouble of a mechanical inspection? Whether your car is the former or latter in the above description doesn’t matter one bit. Not if you price it accordingly.
As a car dealer we see it all, and when it comes to pricing I have to be aware that less than perfect cars need to be priced less. Again, it’s not a bad thing to buy or sell these types of vehicles. Lots of buyers will overlook a dent or some accident history if the value makes sense. Remember as well that when you sell a car privately you must get a Used Car Package from the MOT. It’s a great consumer protection tool. It requires all disclosures about accident history, previous owners and odometer records to be shown. This insures transparency, just like a New or Used Car Dealer is required to do. It will give your buyer piece of mind.
Is there an advantage to trading in with a dealer versus private sale? The quick answer is…it depends. Ask yourself if you have the time to invest in getting the car ready for sale, listing it, and waiting for offers, visits and test drives. If you do, you will likely get more than the dealer will give you.
Knowing that this trade in dilemma that faces us all at some point, I implemented a customer driven trade-in process at Budds ’Chevrolet. Here’s how it works: When you approach us with a trade in, possible trade in, or maybe you have a vehicle you just want to sell, our staff gets right to work on the appraisal. First, the vehicle is checked for its overall appearance and condition. The kilometers, and the serial number are then recorded. At this point the Used Car Manager gets involved and does a much more thorough inspection, sometimes engaging technicians for mechanical opinions. A Carproof report is obtained, along with paint depth inspections (to determine any possible accident repair). After all the data is gathered, it is entered into our 3rd party ‘neutral’ software that will measure it against similar vehicles within our market area. We instantly know how many vehicles like yours, plus those that have higher and lower mileage, are for sale, at what price, and how many days they have been listed. All this data gets us a “Market Days’ Supply” as well as the proper price for maximizing a speedy sale. We then share this information with you, and tell you what we are willing to pay for your vehicle.
It’s quick, accurate and most of all transparent. I have found that our trade in process is not the ‘grind’ that many car buyers over the years have experienced in other stores. You can now make an informed decision on whether it’s worth it to trade, or if it’s better to try selling it yourself. One final consideration. In Ontario the HST is calculated after the trade value is taken off the selling price. This is important to know when weighing the merits of selling privately. For example, if you are buying a $20,000 car and have a $10,000 trade, tax will be based on $10,000. So the total to you is $11,300. You would have to get at least $11,300 privately to make it equal to what the dealer offers you. From there you can decide what your time is worth, and add it to the $11300.
Wayne