Are you ready to swap out your old ride for a new one, but don’t know where to start? Trading in your car is a more than just handing over the keys, there’s plenty to know and do before you even get to the dealership. We can help you easily navigate the process and get a great deal.
Step 1: Find out how much your car is worth
A great place to start getting an idea of what your car is worth is to research what similar cars sell for in your area. We have a free tool that will tell you the average selling price of similar vehicles. Keep in mind this will show you the average selling price of the vehicle and that a trade-in offer you get from a dealer might be different. A trade-in value may be different because it takes into consideration the vehicle’s history and how much reconditioning a dealership may need to do in order to re-sell it. Nonetheless, it’s a good place to start your trade-in journey.
As a car gets older, it generally decreases in value – this shouldn’t be too surprising. But there are many factors that impact how much it’s worth including previous damage, the number of kilometres it’s travelled and where it’s been registered. A good way to keep your value intact is to keep your vehicle well-maintained and serviced regularly. Read more about what can impact the value of your vehicle in our Used Car Value Guide.
Step 2: Know how much you owe
If you’ve financed your current vehicle or decided to go with lease-to-own, you might have a balance owing on your current car. There’s a chance that you might be able to roll over the amount owed onto your next vehicle, but that means your monthly payments will most likely increase. It’s very important to know the remaining balance before going into the dealership. To get this information, simply call the company that provided you with the lease or financing - this will be a different company from the dealership you purchased your car from, quite commonly it’s a financial institution.
Step 3: Prepare your vehicle
Have you been putting off fixing some minor scratches on your car? How about doing a deep clean or even getting it detailed? Doing the little things for your car could increase how much a dealership may give you. This isn’t to say you need to go all out and completely overhaul your current car, but a little bit of elbow grease couldn’t hurt.
Step 4: Shop around for trade-in values
Whether you do it in person or online, finding out what dealerships are willing to offer you for your vehicle is important. Some dealership websites even offer a free 3rd party valuation tool, (like our CARFAX Canada Vehicle Trade-in Widget), that will give you a quick estimate of how much that dealership may offer for it. Take advantage of these handy tools and get a few estimates for comparison purposes. Our recommendation is to do your homework, but ultimately look for a trusted dealer who you feel comfortable with because this can make the whole trade-in process a lot faster and easier.
Step 5: Negotiate
Now that you’ve done the prep work, it’s time to negotiate how much you’ll get for your vehicle. It’s important to know the history of your vehicle, since it can impact how much it will trade in for. If you’re not sure of what the car’s past was, you can purchase a CARFAX Canada Vehicle History Report. This tool will give you a clear picture of your vehicle’s past, and you can then use the car’s history to negotiate the deal. Learn the best ways to negotiate.
Trade-in tax credit
An important thing to be aware of is that depending on where you live, trading your car in to a dealer can earn you significant tax savings on your next vehicle. If you decide to sell your vehicle privately, you will pay tax on the sale, but if you trade it in to a dealership towards the purchase of a new vehicle, that tax is applied as a credit, saving you money! Check out what the regulations are in your province and keep this in mind when deciding to sell your car privately or trade it into a dealership. During the journey to a “new-to you” car, there are plenty of other important steps to consider including taking the vehicle you’re interested in for a test drive and getting a pre-purchase inspection. To get the full list, be sure to check out our Used Car Buying Guide.