If you’re planning to upgrade your vehicle, you might be wondering about your trade-in value. Learn how to get the most trade-in value Canadian car dealers have to offer.
IN THIS POST, WE COVER:
- What is trade-in value?
- How is trade-in value measured?
- How do I estimate my car’s trade-in value?
- How to get the most trade-in value in Canada?
- When is it better to sell vs. trade in a used vehicle?
When you’re planning to buy a new or used vehicle, you want to make sure you get the best deal possible. That means negotiating price, as well as how much trade-in value you can get for the vehicle you currently own.
Figuring out trade-in value in Canada means doing a little research into what your car is worth and what a dealer might offer you for it. This guide breaks down everything you need to know to maximize your car’s trade-in value.
What is trade-in value?
When you trade in your car, you’re giving it to the dealer you’re buying your new car from. In exchange, the dealer estimates your car’s trade-in value, then effectively credits that amount toward the purchase price of the vehicle you want to buy. Alternately, the dealer may offer you the trade-in value in cash.
Trade-in value reflects the best price a dealer is willing to offer you for your car. Once you agree to a trade, the dealer can then resell your vehicle on the lot. Or they can sell it at auction, depending on what condition it’s in and how much money they expect to get from the sale.
Making a trade could make sense if you want to get the lowest purchase price possible when buying a new or used car, or you’re hoping to get cash out of the deal. It’s also something to consider if you don’t need two vehicles or you can’t afford to pay for insurance, gas and maintenance costs for two cars.
Trade-in Value Canada: How is it measured?
There’s no set standard for the trade-in value Canadian car dealerships use but there are some guidelines they can follow. If you’re working with a dealer to close a trade-in deal, you can expect these things to be considered:
- The vehicle’s year, make and model
- How popular that particular make and model is
- Trim packages and extra features or add-ons
- How many kilometres are recorded on the odometer
- The vehicle’s past crash or accident history, if any
- Overall maintenance and repair history
- The amount of wear and tear on both the interior and exterior, as well as under the hood
- How much similar vehicles are currently selling for in your area
Dealers can also take into account the reconditioning cost they’ll need to invest to make the car sale-ready. For example, if the car is spotless inside and out and there are no minor or major repairs needed, then reconditioning may not cost much. The reconditioning cost is important because it determines how much profit the dealer stands to make if they’re able to resell your vehicle.
It may not seem obvious but the time of year can also dictate how much trade-in value you can get. Before new models begin rolling out in spring, for example, dealers may be willing to offer generous trades to clear out last year’s inventory if you’re shopping for a new-to-you car.
How do I estimate my car’s trade-in value?
While it can be difficult to pin down what a specific dealer might offer in trade-in value, you can do a little preliminary research before heading to the lot. You’ll want to start by estimating your car’s current market value.
The easiest way to do that is to use an online tool, such as Canadian Black Book. Using your vehicle’s make and model, you can conduct a quick search to get an idea of how much your vehicle is worth.
If you’re using this or a similar tool to calculate trade-in value, try to look at your used car the way a dealer would. You might have a specific dollar amount you’re interested in getting for your trade but you have to keep in mind what a dealer is actually willing to pay. If your car has some dents and dings, for example, or it’s a bit rusty around the fenders you don’t want to gloss over those imperfections when estimating what it’s worth.
How to get the most trade-in value in Canada
Like everything else in the car-buying process, trade-in value is up for negotiation. The dealer may be willing to give you more money for your trade if you agree to purchase a service agreement or extended warranty, for example.
Before you sit down at the negotiation table, there are some things you can do to cast your vehicle in the best possible light. Here are a few tips for maximizing trade-in value:
- Stay up-to-date with maintenance. Service your vehicle regularly and keep the records. A dealer may be open to offering more trade-in value for a used car that’s been well-maintained.
- Clean up the interior and exterior. It should go without saying but you don’t want to drive to the dealer’s lot in a dirty car. Take time to wash the outside and detail the inside so your car is as buyer-ready as possible.
- Make any necessary repairs. If you know your vehicle has an issue, either cosmetic or mechanical, consider investing a little money in repairs. That could pay off if it yields a higher trade-in value later.
When is it better to sell vs. trade in a used vehicle?
Even when you’ve done your homework and taken steps to improve your car’s value, the dealer may still come back with an offer that’s below what you were expecting. In that case, you have to decide whether you want to accept the dealer’s trade-in offer or try to sell your vehicle for more money to a private buyer.
Whether it makes sense or not depends on how much trade-in value you could get versus how much you think you could sell the car for. Your goals for completing the purchase also matter. If you wouldn’t be able to buy your next car without trading in the old one first, then selling might not be an option.
You can, however, explore the possibilities with other car dealers before you commit to the purchase. Another dealer may offer you more favorable trade-in terms, based on the vehicle you own and the one you want to buy. If you could get a few hundred or even a few thousand dollars somewhere else, it’s worth your time to shop around.
Birchwood Credit Solutions can work with you to estimate your vehicle’s trade-in value and help you get the best deal possible. Contact us today to discuss trade-ins or browse our extensive inventory of vehicles online. We work with buyers from virtually every credit background to offer financing solutions to fit your needs.