You are shopping for a new car and you want to know what your old set of wheels is worth.
Car dealers calculate the value of a trade-in based on a variety of factors including the car’s condition and the cost of reconditioning.
High reconditioning costs will mean less payout for you. If there are scratches and dents on it, get them fixed. If the car needs maintenance, get it done. Now, shop your car around.
Don’t forget the dealer wants to make a profit on the sale of your trade-in, so you will be offered a wholesale price.
To get a realistic valuation, look to online trade-in valuators such as Canadian Black Book.
If after determined haggling, you think the estimates you’re getting from dealers are too low, you might want to consider selling your car online. However, there are a few things you should know before you do.
Consider these 5 things before you sell your vehicle yourself
The Sales Tax Factor
You don’t pay sales tax on a trade-in. So, if the price tag on the car of your dreams is, say, $30,000, and your trade is worth $8,000, you’ll pay tax on the remaining $22,000. Pay cash and you pay on the entire amount. Your savings on a trade-in deal will vary from province to province. So, get out your calculator and figure out the bottom-line amount you’ll need to make a private sale worthwhile.
Listing Options
There are plenty of online sites where you can list your car at no cost. To set a price, see what other cars like yours are going for. Check to see how long they’ve been listed. That will give you an idea how long it will take to sell your car.
In addition to listing online, try some old-fashioned ways: post some signs on your supermarket and laundromat info boards and neighbourhood lampposts.
Now while you wait for buyers, keep this in mind: there are some disreputable people out there. So, you’ll want to develop a sales plan that will help ensure everyone’s safety and that keeps the sales process under control.
Your Sales Plan
Be familiar with the equipment on your car. Show your car’s ownership papers, maintenance history and proof of extended warranties and rust protection, if you have them.
Most provinces and territories have some form of used vehicle history report that shows your car’s registration history and any money owing on it and to whom. Have one on hand.
Now draw up a blank sales agreement. Get input from experts, or consider doing research online for existing forms that have been vetted by experts.
Most provinces and territories require a vehicle condition report that shows your car is roadworthy or it cannot be registered. Since most reports are valid for only a set period of time – usually 30 days – you might want to wait and hand this over when the car is sold.
Before you go for a test drive, insist on seeing your customer’s driver’s licence. Make sure that it’s still valid by checking the expiry dates and confirming with the customer that it is in good standing. Set out a route for a short test drive in your neighbourhood. Don’t let a customer take your car on the highway; most car dealers won’t.
Taking along a friend is a great way to enhance your safety and give all parties peace of mind. Telling others where you are going, what you are doing, and when you intend to return is also key.
Closing the Deal
Once you’ve found a buyer, insist on a deposit. It’s a guarantee that your buyer is serious. Since time is of the essence, insist on an electronic transfer of funds. Waiting for a cheque to clear wastes time and isn’t guaranteed.
Tell your buyer that you want an electronic transfer of the remaining amount. Don’t accept money orders or certified cheques; they are easy to counterfeit.
If you have a loan on your car, once you’ve got a deal, find out exactly how much money you still owe on your car. Then co-ordinate an electronic transfer of the outstanding amount to the finance company.
To assure the buyer that you have paid off the loan on the closing date, the two of you should visit your bank together so that you can see the purchase amount electronically deposited into your account and, likewise, your buyer can see the loan paid off.
Now, take the plates off your car and sign the car over to the buyer.
Confirm the Buyer has Insurance
Before you wave goodbye to your car, it’s best to insist that the buyer has his or her own automobile insurance. The new owner can’t register the car without proof of insurance in any Canadian province or territory. But what if they drive without insurance?
All provinces/territories insure members of the public injured in accidents with uninsured drivers. But it’s not clear whether or not the government will turn to you for reimbursement – especially if the sale has not been properly documented. Why wait to find out? Insist the buyer be insured and ask for a copy of their insurance slip.
While selling a vehicle privately will typically get you more money than trading it in, selling a car yourself takes time and effort, and can come with more risks. If you find all this strenuous, you may want to trade-in your car to a dealer. Then it’s the dealer’s job to assume all the responsibilities.