Is it about time that you upgrade your vehicle? We’ve all been there, your car may have been great while you owned it, but it’s at the end of its life. You need to start considering upgrading your car for something that will last you another five years at least. If you’re like most people, you want to get the best deal possible whether it be through financing or leasing. One of the best ways to do this and lower your monthly payments is by trading in your current car. In this blog, we’ll talk about all the little details you need to know about trading in your car and how you can get more money for your trade-in.
How to Trade-In Your Car
If you’re ready to trade in your vehicle, these are the simple steps you need to take.
- Book an Appointment
The first thing you need to do when trading in your vehicle is book an appointment with whichever dealership you want to make the trade-in. If you want a better idea of what the value of your vehicle is before you get a quote from a dealership, you can use Canadian Black Book’s trade-in value tool.
- Have the Dealership Value Your Vehicle
When you go to your appointment at the dealership, they’re going to consider a few things before they can quote you on the value of your vehicle.
- The mileage
- The trim level and any additional features/add ons
- Accident and maintenance history
- Vehicle make, model, year and popularity
- The interior and exterior wear and tear
- Get an Offer From the Dealership
Once the dealership has looked into all the factors above, they’ll give you an offer for your vehicle. If you choose to accept the offer, you’ll be able to put that money towards the purchase of your new vehicle. If you feel that based on your research they aren’t offering you a fair amount, you should consider getting a quote at another dealership.
Trading in a Financed Vehicle
You may still be working on paying off your current vehicle, but that’s ok because you can still trade in a vehicle with an outstanding balance. In fact, the process of trading a vehicle that you completely own versus one with a remaining loan balance is very similar. When you’re trading in a financed car, the value of your car becomes a credit for the loan.
Trading in a Leased Vehicle
Despite what a lot of people believe, you CAN trade in a leased vehicle. Leasing a vehicle essentially means you’re paying for the depreciation of that vehicle. At the end of the lease term, you either return the vehicle to the dealership or you can purchase the vehicle. If you want to trade in the vehicle, you need to find out if the vehicle has any equity. The vehicle equity is also known as the residual value and that’s the amount it would cost for someone to buy that leased vehicle. Here are two scenarios in which you could trade in a leased vehicle.
- Your lease is over and you want to trade in your car for a new one
For this situation, you’ll need to find out what the dealers are willing to pay for your trade-in and compare it to the residual value of the vehicle determined by the lease contract. If the trade-in value happens to be higher than the residual value, you’ll be able to put that equity towards a new vehicle.
- You’re getting close to the end of the lease and want a new vehicle
If your lease is close to the end, you could get lucky and have the dealership pay off your old lease balance and buy the vehicle from the lease company. If the dealership does end up buying the car and putting it on their used car lot, you could be given the credit to put towards a new vehicle of your choice. On the other hand, there is a possibility that the lease contract is higher than the trade-in value, which would leave you having to pay more for your new vehicle.
In the end, we recommend that if you’re planning to trade in your leased vehicle, you either wait until you’re very close to the end of the lease or the lease in finished entirely.
Trading in a Fully Owned Vehicle
This is the best-case scenario as you’ll be able to receive the most money for your trade-in. This will allow you to take the full value of your trade-in and put it towards a hefty down payment that can help lower interest rates and monthly loan or lease payments.
6 Ways to Get the Most for Your Vehicle
Just like when you’re negotiating on buying a car, you have the ability to negotiate on selling/trading your car. If you want to go into negotiation with the most leverage possible, be sure that you follow these 6 tips:
- Make Any Needed Repairs. If the car you’re looking to trade-in has any needed interior or exterior repairs, it’s best to get these fixed before going into negotiations.
- Do a Thorough Clean of the Car. This should be obvious but we still hear about people bringing in their trade-in vehicles that looked like they haven’t been cleaned in years. A little bit of interior and exterior cleaning can go a long way when you’re negotiating the value of a car.
- Be Up to Date with Maintenance. This isn’t something that you can wait to do right before you trade in your vehicle. You need to ensure from the moment you get a vehicle that you’re doing regular maintenance on it to keep it working at its optimal performance. Not only will this save you headaches from performance problems, but it will also make you more money when you go to a dealership to trade it in.
- Bring all the Extra Accessories. You should make an effort to ensure that everything that came with the vehicle when you bought it comes back when you trade it in. Whether that means two sets of keys or a remote to work the DVD player, if you can bring in these accessories you’ll find it easier to get more money for your car.
- Bring Vehicle Documents. It’s smart to bring all the documents associated with the vehicle you’re trading in. This means registration, service records and maintenance records. This shows the dealer that you’ve taken good care of the vehicle.
- Have an Idea of the Vehicle’s Value. Not knowing what the vehicle you’re trading in is worth is like trying to play ping pong in the dark. You need to have a rough idea of what your vehicle is worth in order to be able to effectively negotiate its value. Use Canadian Black Book’s car value tool to help figure out the worth of your car.