How to Calculate the Trade-In Value of Your Car in 2 Minutes
If you have questions about how to determine the trade-in value of your car, when to trade in your car to get the best value, or even understand how a car dealer will determine your trade-in value, here’s a super quick guide that will take you through everything you need to know (and, don’t know you need to know!)
There’s lots to decide when you want to upgrade your car. But one of the first things you’ll want to know is how much you can get for your current vehicle. Once you know how much your trade-in is worth, you can start shopping for a newer car within your price range.
Read on to learn how you can easily find out how much your car is worth and how you can get the best price for it.
What’s my car’s trade-in value?
The trade-in value of any car is the amount of monetary value that you are likely to be able to get if you sell it to a car dealer. It's intended to be the sale price of the car to the dealer, but you may also be able to negotiate other benefits too such as extra services or better lending rates (if you're financing the new car). These benefits may meet your goals better, for example, if you need to have a longer-term car loan, or if you want an extended warranty. These are just some of the negotiating advantages of trading in your car. And car dealers, especially used-car dealers, are very hungry for used cars these days, and that will make your trade-in value work harder for you.
How much is my car worth?
First, you'll need to know what the current market value is for your make, year, and model of car. Start by looking up your car's worth on the Canadian Black Book valuation site. (Please note: very old and or obscure cars may not appear on the site.)
Next, your car’s mileage, compared to its age, is one significant factor in assessing its trade-in value (and whether it’s been mostly driven on highways or on city roads). The average range, annually, is between 18,000 km, and 22,000 km.
Your car’s actual condition, based upon a physical inspection by the dealer, is the next criteria. Make sure to clean your car and service it before this inspection so that the dealer doesn't use any small problems as bargaining chips to negotiate a lower price. If you have maintenance records with no damage history, you will do better. There are various groups that are starting to offer more specific evaluation-type services online, and although they are slowly making headway for consumers and car dealers, a physical inspection is still necessary. There are a few other factors that will vary dealer to dealer.
Read more: What Is My Car Worth? How to Sell Your Car for Top Dollar
When do I trade my car in to get the best value?
The value of your vehicle decreases over time. Two things that will accelerate depreciation is the mileage it racks up and any wear and tear it accumulates. To maximize trade-in value, some dealers recommend trading your vehicle in before it reaches 100,000 kilometres. But if you look after your vehicle, you don't have to worry about reaching this milestone too much.
If you do decide to trade in your vehicle to a dealership, choose late winter as you may be in a better position to negotiate. How come?
New car models come out in spring and summer. Late winter is when the dealers want to clear their lots prior to make way for the new cars and will offer the generous discounts on the older (but still brand new) models. Choosing this time of year to buy a new car and trade in your old vehicle will help you get a better deal.
How do car dealers determine trade-in value?
Online car assessment tools available to anyone which means car dealers have access to the same information you do. But dealers have their own options and goals to reach, and because those considerations vary from dealership to dealership, you may be surprised to find very different offers for your car.
The car dealer will be looking to give you just enough to be able to sell your car with a reasonable profit margin. To do that, the car dealer is likely to max out at a wholesale price for your car, in the hope of selling it at a higher retail price.
Another important factor in whether or not the car dealer will even want your car, is the popularity of that car (and how quickly and easily it can be sold), and if there are several other similar cars on that dealer’s lot, there is likely to be less excitement about taking your trade-in.
Can I trade in my car and get cash back?
You may want to trade in a car (that you own outright) and hope to receive some of its value as cash back. It's possible. When you’re completing the financing for your vehicle, you’ll have to specify with your dealer how much you’d like back in cash and how much of your trade value you’d like to put towards the new vehicle.
Should I sell or trade-in my car?
Many car owners feel that selling their own used car is a good option. While this might provide you with a decent sale price, there are zero guarantees. Will you have the time to haggle until you get the best possible price from someone who may disagree with your estimation of the car's value? You may spend a lot of time and effort advertising, meeting with potential buyers, going on test drives, and still not get any offers at all. And if you do, it may be a poor offer.
Should you agree to an offer, you're still not done. You need to agree on a secure deposit, and if your buyer doesn't change their mind, you'll need to go and transfer your ownership documents once you've received the fully secured, balance of payment.
Get a real offer for your car with Canada Drives
Canada Drives makes it easy to trade-in your vehicle. Shop online to find your perfect ride, apply your trade-in in a few clicks, and book home delivery. When we deliver your new car, we'll take your old car with us! Our offer for your old car will be based on Canadian Blackbook values, so you'll know you're getting a fair price!
