Published July 20, 2023 • 3 Min Read
When you’re ready to part ways with your current car, you’ll generally have two options: sell it yourself or trade it in to help offset the cost of your new vehicle. Understanding the value of your vehicle and weighing the benefits of each choice will help you make the decision that works best for you. Here are a few things to consider:
Trading in
“Trading in” means giving your vehicle to a dealership and putting its value towards a new car. Online tools such as Kelley Blue Book Canada can provide an approximate valuation you can take to a dealer and negotiate. After a visual inspection and test drive, the dealer will offer their valuation based on the car’s make, model, condition and kilometres on the odometer. That money goes towards the down payment on your next vehicle.
More convenience
Turning your car over to a dealership is usually much easier than selling it yourself. Trading in is typically a hassle-free and relatively quick experience, and you’ll also leave the dealership with a new ride. If you don’t want to deal with the paperwork, negotiations and detailing that come with selling a car yourself, trading in might suit you best.
Save on detailing costs
When trading in, your dealer typically expects to detail and recondition your vehicle themselves. When selling privately, getting your car fresh and clean to maximize its value can be expensive and time-consuming. Some details can cost upwards of hundreds of dollars!
Easier transaction
A dealership will handle all the paperwork and responsibilities of a vehicle sale when you trade in. If you sell your car yourself, you’ll need to take care of any necessary paperwork, and be sure the buyer’s payment goes through – you could be out a lot of money if the buyer’s cheque bounces.
Selling privately
Listing your vehicle on multiple websites is a good way to find potential buyers if you want to sell privately. Make sure you’ve done your research and list your vehicle for what it’s worth.
Potential for higher offers
Selling your vehicle privately may net you more money than trading it in. That’s because dealerships need to turn a profit, so they often value cars below their actual worth. Private buyers typically aren’t in the business of reselling cars for a profit, so they may be more likely to pay the market price for your car.
More room for negotiation
When selling privately, you can field multiple offers until you find the best deal. You have more control over the transaction and can set the price and the terms however you like.
Read next: Buying a Car in a High Cost Environment
Whether you’re selling your car or trading it in, RBC’s My Auto Affordability Tool can help you know what you can afford before going to a dealership.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
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