Trade in a car and move on. It’s a hassle-free process that every dealership offers. After all, selling your old vehicle can be a troubling experience, especially if you don’t what you are doing. It’ll take up your time and may even end up getting you less than you deserve.
Trading in an old car means that you’ll be able to drive a new one sooner. And while exchanging a vehicle for another might not earn you any extra spending cash, it can save you from some stressful moments – like dealing with potential customers or making the vehicle more presentable.
Reason #1: Your Car May Be a Tough Sell
Source: Canadian Black Book
A new car depreciates the moment you drive it off the lot. From that point, your chances of selling the vehicle for a fair price plummets every passing year and every 1,000 km driven. By the time you are ready to move on – and after you finish procrastinating – finding a market for your vehicle might be another lengthy endeavor.
Reason #2: You Can Get a New Car on the Spot
Trading in a car ensures you that you’ll drive home in a new replacement. This is a completely different experience than selling a car. You probably won’t buy another car the moment you sell it, which means that you’ll need to rely on public transportation or someone else’s car to help you get around. No doubt you will experience a bit of a sentiment when giving up your old car, but getting a new one is always more exciting.
Reason #3: You Don’t Need to Know the Current Market Value of Your Car
Source: Canadian Black Book
Before you can even advertise your used vehicle, you need to understand the market. That means research. If you own a 2010 Ford Focus and you want to sell it, you’ll need to know how much the car is worth now, if it’s in demand and who your potential customer would be. You can still research all of this before your trade-in, but it’s not obligatory.
Reason #4: You Don’t Have to Create Ads
Creating ads for your old vehicle may not be rocket science, but it is time-consuming and even expensive. Posting your vehicle through local print publications and free online services, such as Auto Trader and Craigslist, is generally effective, but the process demands that you take some time out of your day to show your vehicle to anyone who might be interested.
Reason #5: You Can Avoid Making Your Car “Pretty”
Nobody wants to buy a clunker even if the price is low. If your vehicle needs a makeover, it may end up costing you some money in repairs and upgrades. There are a lot of options out there for used vehicles. We live in a superficial world and the “prettier” cars always get noticed more. You can always do this for a trade-in as well, but it’s not something you have to do.
Reason #6: You Get to Use Tax Savings
(New Car MSRP – Trade-in Value) + Tax % = Final Price |
e.g. ($30,000 – $10,000) + 15% = $23,000 |
When trading in a vehicle, you can save money on taxes. For example: If the car you are buying a vehicle with an MSRP of $30,000, while your trade-in is worth $10,000, then you will pay tax on the difference of these two amounts, which is $20,000. In order to get the same tax break when selling privately, you will have to boost your asking price.
Reason #7: You Can Benefit from an “In-and-Out” Trade
“In-and-Out” Trade |
Trade-in Value (e.g. $10,000) = Retail Price (e.g. $10,000) |
Regular Trade |
Trade-in Value (e.g. $10,000) < Retail Price (e.g. $17,000) |
If you have a friend or family member who wants to buy your car, take them to a dealership and make an “in-and-out” transaction. Doing so will get you your tax savings from the dealer, and your dealer will sell the car to your friend or family member for the price of the trade-in.
If you are interested in a trade-in, you can configure your new car and get in touch with a dealer right now via our free dealer cost report.
