Thai
Elite Member
Advice:
What to do with your trade-in
by Phil Bailey
Shopping for a new car can be an exciting thing, an exhausting experience or a frustrating ordeal - and not just because you're sniffing all those new-car fumes, which may not be too good for you. But in the maelstrom of the moment, you might have forgotten about your old car. You know, the one you drove up in? That's right - what should I do with my old car? Trade it in? Or sell it privately?
Before you commit to several years of payments, you need to decide what will become of old faithful. Selling it yourself has its advantages, such as the prospect of a higher return on your old car. But letting the dealership handle it for you can sometimes be by far the best choice.
Most people simply trade-in their old vehicle, because it's generally the fastest, most trouble-free way to get rid of it. The dealer handles all the paperwork and you get money that is usually applied to your new car purchase.
The big downside to trading in is that you will definitely get less money than the vehicle is actually worth on the retail used car market. Unless you happen to be trading on a Maybach, or a Bentley, the dealer will offer a trade-in credit equivalent to the wholesale value of the vehicle - an amount reflected by current used car pricing guides and adjusted to reflect the specific condition and mileage of your particular car or truck. There is a substantial difference - very often as much as 20 percent - between wholesale and retail values. If the dealer gives you a $4,000 credit for your trade-in, don't be surprised to see it the next week on his used car lot with a $5,900 window sticker on it. This isn't usury - it's usually his cost of doing business, plus some profit. But it's also true that at the lower end of the market, dealers make more money on used cars than on new ones.
Be aware, though, that trading leaves you open to a popular gambit that can cost you money. Some new car salespeople will offer what appears to be a spectacular price for your old clunker, which makes you happy and distracted, and then boost the price of the new car while you're mentally counting all the cash you're making on the trade. To avoid getting stung by this scam, never discuss your trade at all until after you have negotiated and agreed upon the sales price of the new vehicle. Once that's settled, you can bring up your trade. The salesman may not like it, although the better ones expect you to do something along those lines and they allow for that possibility, nevertheless, it's a smart move for you.
And when you're ready to discuss your trade-in, don't go in unprepared. Find out what the approximate fair market price (retail and wholesale) of your vehicle is. This information can be culled from used car value guides that can be purchased at any large bookstore. Red Book is often available at the local public library, or it can be purchased online at www.canadiandredbook.com for $11.95 for one issue or $90.00 for a yearly subscription. The guides will tell you how to estimate the fair market value, adjusting for such things as mileage, condition and options, etc. If you know your old car is worth about $5,000 retail, you won't get suckered into accepting a $2,700 trade-in offer.
Selling your old car yourself, on the other hand, has a number of upsides - and one or two downsides, too.
On the positive side of the ledger, you'll get more money - the retail price versus the wholesale price the dealer would offer. This can amount to $2,000 or more, or in the case of some higher-dollar used cars, much more. Once the car is sold, you'll have cash in hand to use as a down payment, or whatever.
The big negative is you have to sell the vehicle. That means placing classified ads, talking with buyers on the phone, spending time arranging for people to come and see the car, and then dealing with the paperwork that is associated with the actual transaction.
Ask yourself if the additional money is worth the aggravation of late-night calls and waiting around the house to show the car to people? It may take several weeks to complete the transaction. For some, this is no big deal; for others, a couple of Saturdays spent with tire-kickers and no-shows is ultimately worth it when the car is finally sold.
If you do choose to sell your old car yourself, preparedness is the secret. Here are a few things to get in order before you start out:
Decide what the car is worth and be realistic. Don't overprice the car; because it probably won't sell and you'll have to go through the hassle all over again. It's okay to pad the asking price a little because everyone expects to haggle, and you'll have to knock down the asking price regardless.
Clean the vehicle so it looks as presentable as possible. The dealer calls this "detailing." Professional car sellers know the importance of appearances; a clean, shiny car will always sell faster and command a better price than an identical car that's unwashed and dirty, even if it has lower mileage and is actually in better condition. An afternoon spent washing; waxing and vacuuming can pay big dividends. Actually you'd be amazed what the professionals can do for about $125.
Fix any major problems - especially those that affect the safety of the car, such as tires or brakes - before you put the "for sale" sign out. The vehicle should be sound enough to safely test-driven.
Advertise the car effectively. Take out a classified ad in the appropriate section of your local major daily newspaper. The ad should be direct and have the following information: Make, model, year, mileage, options (air conditioning, automatic transmission, etc.), colour, a brief and honest description of its overall condition ("good shape," "excellent," etc.). If the vehicle is in poor shape, has faded paint and rusty patches, or "needs work," state this in the ad. The people who call are going to find out anyhow, and attempting to pull the wool over their eyes about major problems is a bad idea that could lead to trouble you do not want. Make sure to include a phone number where you can be reached, as well as the best times to call. If you prefer not to be called after 10 p.m., state that in the ad. List the asking price (i.e., $5,500 or best offer).
Sell the car. It's up to you to make arrangements for people to come and see the vehicle and also whether you'll allow them to take a test drive. If you do, be certain you ask to see their driver's license and proof of insurance before you allow the car to be driven.
It's smart to jot this info down, just in case. And use your judgment; if the person who shows up seems suspicious or not "right," be polite but do not allow them to drive your car. There have been cases of car keys being wax copied during "test drives" and the car then disappears from your driveway, or a cinema parking lot a few hours later.
Be prepared to discuss the car's features, equipment and history. Have any service records available to show. In fact we offer this service to our customers. With their approval, we make all the information we have available to the prospective buyer - another advantage of using one service facility on a regular basis. Draw up a sales receipt listing the vehicle identification number (VIN; this number can be found on the title, or on the left-hand side of the dashboard); also the year, make and model - and the sales price. Date the document. State that the vehicle is sold as seen, tried and approved so that any unforeseen problem that develops later on is understood to be the buyer's problem, not yours. Print your name and the buyer's name; each of you sign the document.
The final step is to sign over the title; there is a box where the owner must sign so that the buyer can go to the licence bureau and get a new title issued in his name.
Get the money. Do not release the car or the paperwork until you have payment in full: either in cash, or in the form of a certified check or money order in your hand. A personal check can bounce and a promise to pay is only as good as your faith in the person making the vow.
The last thing to do is remove your licence plates and any personal things from the vehicle. Never allow the car to be driven away with your old plates still on it. Acquiring new plates is the responsibility of the buyer - and you don't want to be getting parking bills and photo radar tickets months down the road because someone else is driving around in your old car with your old tags still on it. Be sure you notify your local licence bureau that the vehicle has been sold.
If all this seems like far too much work, there's always the trade-in. It's easier - but it'll usually cost you, too. The choice is yours to make. Of course, if you drive the car for 15 years and then scrap it, you have definitely maximized your cost per kilometre. And the automobile manufacturers will just HATE you!
What to do with your trade-in
by Phil Bailey
Shopping for a new car can be an exciting thing, an exhausting experience or a frustrating ordeal - and not just because you're sniffing all those new-car fumes, which may not be too good for you. But in the maelstrom of the moment, you might have forgotten about your old car. You know, the one you drove up in? That's right - what should I do with my old car? Trade it in? Or sell it privately?
Before you commit to several years of payments, you need to decide what will become of old faithful. Selling it yourself has its advantages, such as the prospect of a higher return on your old car. But letting the dealership handle it for you can sometimes be by far the best choice.
Most people simply trade-in their old vehicle, because it's generally the fastest, most trouble-free way to get rid of it. The dealer handles all the paperwork and you get money that is usually applied to your new car purchase.
The big downside to trading in is that you will definitely get less money than the vehicle is actually worth on the retail used car market. Unless you happen to be trading on a Maybach, or a Bentley, the dealer will offer a trade-in credit equivalent to the wholesale value of the vehicle - an amount reflected by current used car pricing guides and adjusted to reflect the specific condition and mileage of your particular car or truck. There is a substantial difference - very often as much as 20 percent - between wholesale and retail values. If the dealer gives you a $4,000 credit for your trade-in, don't be surprised to see it the next week on his used car lot with a $5,900 window sticker on it. This isn't usury - it's usually his cost of doing business, plus some profit. But it's also true that at the lower end of the market, dealers make more money on used cars than on new ones.
Be aware, though, that trading leaves you open to a popular gambit that can cost you money. Some new car salespeople will offer what appears to be a spectacular price for your old clunker, which makes you happy and distracted, and then boost the price of the new car while you're mentally counting all the cash you're making on the trade. To avoid getting stung by this scam, never discuss your trade at all until after you have negotiated and agreed upon the sales price of the new vehicle. Once that's settled, you can bring up your trade. The salesman may not like it, although the better ones expect you to do something along those lines and they allow for that possibility, nevertheless, it's a smart move for you.
And when you're ready to discuss your trade-in, don't go in unprepared. Find out what the approximate fair market price (retail and wholesale) of your vehicle is. This information can be culled from used car value guides that can be purchased at any large bookstore. Red Book is often available at the local public library, or it can be purchased online at www.canadiandredbook.com for $11.95 for one issue or $90.00 for a yearly subscription. The guides will tell you how to estimate the fair market value, adjusting for such things as mileage, condition and options, etc. If you know your old car is worth about $5,000 retail, you won't get suckered into accepting a $2,700 trade-in offer.
Selling your old car yourself, on the other hand, has a number of upsides - and one or two downsides, too.
On the positive side of the ledger, you'll get more money - the retail price versus the wholesale price the dealer would offer. This can amount to $2,000 or more, or in the case of some higher-dollar used cars, much more. Once the car is sold, you'll have cash in hand to use as a down payment, or whatever.
The big negative is you have to sell the vehicle. That means placing classified ads, talking with buyers on the phone, spending time arranging for people to come and see the car, and then dealing with the paperwork that is associated with the actual transaction.
Ask yourself if the additional money is worth the aggravation of late-night calls and waiting around the house to show the car to people? It may take several weeks to complete the transaction. For some, this is no big deal; for others, a couple of Saturdays spent with tire-kickers and no-shows is ultimately worth it when the car is finally sold.
If you do choose to sell your old car yourself, preparedness is the secret. Here are a few things to get in order before you start out:
Decide what the car is worth and be realistic. Don't overprice the car; because it probably won't sell and you'll have to go through the hassle all over again. It's okay to pad the asking price a little because everyone expects to haggle, and you'll have to knock down the asking price regardless.
Clean the vehicle so it looks as presentable as possible. The dealer calls this "detailing." Professional car sellers know the importance of appearances; a clean, shiny car will always sell faster and command a better price than an identical car that's unwashed and dirty, even if it has lower mileage and is actually in better condition. An afternoon spent washing; waxing and vacuuming can pay big dividends. Actually you'd be amazed what the professionals can do for about $125.
Fix any major problems - especially those that affect the safety of the car, such as tires or brakes - before you put the "for sale" sign out. The vehicle should be sound enough to safely test-driven.
Advertise the car effectively. Take out a classified ad in the appropriate section of your local major daily newspaper. The ad should be direct and have the following information: Make, model, year, mileage, options (air conditioning, automatic transmission, etc.), colour, a brief and honest description of its overall condition ("good shape," "excellent," etc.). If the vehicle is in poor shape, has faded paint and rusty patches, or "needs work," state this in the ad. The people who call are going to find out anyhow, and attempting to pull the wool over their eyes about major problems is a bad idea that could lead to trouble you do not want. Make sure to include a phone number where you can be reached, as well as the best times to call. If you prefer not to be called after 10 p.m., state that in the ad. List the asking price (i.e., $5,500 or best offer).
Sell the car. It's up to you to make arrangements for people to come and see the vehicle and also whether you'll allow them to take a test drive. If you do, be certain you ask to see their driver's license and proof of insurance before you allow the car to be driven.
It's smart to jot this info down, just in case. And use your judgment; if the person who shows up seems suspicious or not "right," be polite but do not allow them to drive your car. There have been cases of car keys being wax copied during "test drives" and the car then disappears from your driveway, or a cinema parking lot a few hours later.
Be prepared to discuss the car's features, equipment and history. Have any service records available to show. In fact we offer this service to our customers. With their approval, we make all the information we have available to the prospective buyer - another advantage of using one service facility on a regular basis. Draw up a sales receipt listing the vehicle identification number (VIN; this number can be found on the title, or on the left-hand side of the dashboard); also the year, make and model - and the sales price. Date the document. State that the vehicle is sold as seen, tried and approved so that any unforeseen problem that develops later on is understood to be the buyer's problem, not yours. Print your name and the buyer's name; each of you sign the document.
The final step is to sign over the title; there is a box where the owner must sign so that the buyer can go to the licence bureau and get a new title issued in his name.
Get the money. Do not release the car or the paperwork until you have payment in full: either in cash, or in the form of a certified check or money order in your hand. A personal check can bounce and a promise to pay is only as good as your faith in the person making the vow.
The last thing to do is remove your licence plates and any personal things from the vehicle. Never allow the car to be driven away with your old plates still on it. Acquiring new plates is the responsibility of the buyer - and you don't want to be getting parking bills and photo radar tickets months down the road because someone else is driving around in your old car with your old tags still on it. Be sure you notify your local licence bureau that the vehicle has been sold.
If all this seems like far too much work, there's always the trade-in. It's easier - but it'll usually cost you, too. The choice is yours to make. Of course, if you drive the car for 15 years and then scrap it, you have definitely maximized your cost per kilometre. And the automobile manufacturers will just HATE you!
