Buying a new vehicle is the one of the largest purchases people ever make, second only to their house in most cases. During the purchase process, consumers need to make a several important decisions, including the make/model they’re buying, colour, desired options, which dealership to purchase from, etc. One common decision many people struggle with is the following: Should I trade in my car? Or sell it privately? While both choices have their pros and cons, I am seeing more buyers than ever opt to trade in the vehicle their currently driving as opposed to sell it privately. Here are a number of key reasons why:
- Ease of Transaction – Selling your car privately requires much more effort than one might think. First, you need to spend time posting an advertisement (either in the paper, or most likely online). Second, if you want to sell your car quickly, you need to be available to take calls and set up viewings from potential buyers at all times of the day/week. Third, to achieve a maximum sale price, you need to make sure your car gets professionally detailed, has the oil and other fluids changed, and stays clean on the outside. Finally, upon selling the vehicle, you need to visit an insurance office with the new owner to have the registration and ownership transfer papers signed. When you trade-in your vehicle, all of these details are handled at the dealership making the purchase process easy.
- Privacy – Selling your car privately involves advertising your personal phone number, and eventually your home or business address for viewings. This personal information is subject to viewing by an infinite number of people online. For some people, this may not be a issue. For others that take their privacy seriously, posting personal information online and having multiple unknown people visit their home can be concerning. When you trade-in your vehicle at a dealership, you are providing your personal information to a business that is licensed by the Vehicle Sales Authority of BC and held to the highest privacy standards.
- Tax Savings – When you sell your car privately, the buyer simply strokes you a cheque for the agreed sale price (let’s use $20,000 for an example). You now have $20,000 in your hands to apply towards your new vehicle purchase. When you trade in your vehicle at a car dealership, the value of the trade-in is deducted from the selling price of the new vehicle and you only pay tax on the difference. For example, if you purchase a new car for $30,000 and the dealership gives you $20,000 credit for your trade-in, you pay tax on $10,000 only. In this example, you would save an additional $2,400 in tax (12% of $20,000).
- Paperwork Handling – Selling your car privately means you need to take care of all the paperwork yourself, including the sale contract, registration, and ownership transfer forms. If you still owe money on your vehicle, you would also need to make sure that you pay any outstanding amount owing on the loan to the financial institution holding the lien. To complete these tasks, you’ll need to make a couple trips to the bank and whichever insurance office that the new buyer chooses. When you trade-in your vehicle at a car dealership, an experienced automotive Finance Manager will complete his paperwork on behalf of the customer. Larger stores have insurance agents on site full time, providing an added convenience to the new owner.
At the Trotman Auto Group, we make car buying easy by facilitating your new vehicle purchase (including your trade-in) under one roof, in less than one hour.
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