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What to do With Your Present Vehicle
When you shop for a new or newer vehicle (assuming you are not returning a leased vehicle), the question comes to mind "what to do with your present older vehicle?? Should you sell it privately, or trade it in at a dealership? Let me share with you some insight that may assist you in choosing what is best for you.
New car dealerships value well maintained used vehicles that are in excellent condition. Regardless of the model year, we will pay top dollar for these vehicles. Why? Our customers who want to purchase pre-owned vehicles desire them. You may love your car, and have an emotional attachment to it, but remember, it's not you or I that ultimately determines the value of your trade-in. Market conditions, dictated by supply and demand, will yield a vehicle's price range.
In today?s market place used vehicle prices have been impacted by the explosion of new car incentives. Today, by financing your new vehicle purchase over a 5 or 6 year period, with rates as low as zero percent, in some cases, can generate savings in excess of $10,000. A comparable used vehicle, without this incentive, has its price or market value impacted tremendously. The reality today is, whether you decide to sell privately, or trade in your vehicle, your vehicle?s value will be affected by these new vehicle incentives. The primary monetary advantage of trading in your used vehicle is your tax savings of 15% (PST and GST). You save this (on your used vehicle's value) when the taxes are calculated on your new purchase.
Once a vehicle's value exceeds $10,000, it is difficult, if selling privately to recoup more than the $1500 savings in taxes. When new car dealerships assign a value to your vehicle, we must complete a detailed appraisal as to what costs we must now incur to resell this vehicle. We estimate costs associated to replacing items such as tires, brakes, suspension components, tune-ups, paintwork, and even a clean-up before assigning a value to your vehicle. If we earn your business, and acquire your trade, we will then advertise the vehicle, respond to inquiries and phone calls, demonstrate the vehicle, and review all offers. Throughout this process the new car dealership is responsible for insurance, storage, and financing the trade-in, and, in most cases, will warrant its condition/operation for a period of time after it is sold. We are also subject to market conditions that can quickly change, affecting the current market value of the vehicle. We also take the risk with unforeseen costs at appraisal, as we rarely complete a mechanical inspection when we commit a value to you.
If time is on your side, and you can see yourself dealing with the phone calls, the appointments that don't show, the offers that are insulting to you, and the ones that aren't but that may not materialize, then give it a shot. When determining a price, be careful not to count on other seller's advertisements as your guide. These prices are only asking prices, not the eventual transaction price. Many may not have even received a single phone call at the price they are asking. Remember, no two vehicles are alike. Vehicles that are re-sold before being transferred, and for immediate use on our roads, are required to be certified at a motor vehicle inspection station, and obtain a drive-clean "pass" certificate. When selling privately, these responsibilities are usually that of the seller. Not so if you trade in your vehicle. A vehicle certification is based on minimum government set standards. This safety inspection certificate is valid for only 36 days. The vehicle will have to be re-certified and inspected if not sold/transferred within this time period. Many purchasers will ask for an independent inspection of your vehicle by their mechanic. Even though this could take up a good portion of your day (in order to protect your vehicle) ensure you accompany them to their mechanic.
You are also responsible for purchasing and supplying, a Used Vehicle Information Package (U.V.I.P) to the buyer. Always accompany the purchaser to the Ministry of Transportation Licensing Office to ensure your registration is transferred out of your name. Remove and retain your license plates, as they belong to you, not the vehicle. Only accept payment in the form of a certified cheque, bank draft, or money order, and avoid accepting large denominations of cash. If you have already purchased a new vehicle prior to selling your old vehicle, remember both vehicles must be licensed and insured for liability. This is necessary when allowing potential purchasers to test drive your vehicle. Collision and comprehensive insurance is required should there be a registered lien on your vehicle.
Confirm that the potential buyer has a current driver's license before they operate your vehicle. To avoid theft or misuse of your vehicle, always accompany your potential purchaser on every test drive. To ensure your safety, always inform others of what route you will be taking during your test drive, and when you are expected back. Ideally, take test drives during daylight hours.
Selling to family and friends can minimize the time as well as the aggravation of selling privately. However, keep in mind that relationships can be strained should a mechanical failure occur. Discuss, and make clear at the onset, who is responsible should a situation occur.
In the past, people would spend time to save any amount of money. Today, we find consumers prefer to spend a little more money in order to save time and aggravation.
If you are comfortable with the process, and believe your time can be well spent for your expected savings of selling privately, then this is a good alternative. Otherwise, visit any one of your new car dealers in the G.T.A? We are here to make it easy for you!
Until next week, remember - YOU are in the driver's seat.
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