There are many different ways to go about this. Many people want to sell their cars privately. Then use the money to put down on the new car. Or you can trade in your old car to the dealership and not have to worry about selling arrangements. Just as an example - you bring your car to Guelph Infiniti Nissan and you have fallen in love with the new 2013 Nissan Altima, we offer you a trade-in value of $8,000 on your vehicle. But you could get $10,000 if you sell it privately, giving you the option to put a $10,000 Down Payment. There are a few things to consider here. And I am going to clear the air for you!
When selling your vehicle privately there is a list of things you have to make sure get done.
Lets look at it this way:
When selling your vehicle privately
- Cleaning your car inside and out, making it look it's best for the potential consumer.
- Take photos of your vehicle and display in newspaper ad sections, online advertising like autotrader.ca or kijiji.ca
- Wait for potential consumer to contact you - this could take days, weeks, or even months.
- Arrange meeting and test drive times for potential consumer.
- Price Negotiations. This means you could not get the money you really want for your vehicle
- Unless you are selling your vehicle "as is" and asking for less money you need to have the vehicle emission tested and safetied.
- Then you need to go to the MTO and purchase a used vehicle package that contains owner history, accident report and bill of sale.
- Fill out all legal paperwork and transfer ownership or vehicle.
$10,000 minus $500 price negotiation = $9,500
$9,500 minus $20 MTO package, minus $35 E-test, Minus $300 for safety = $9145
You now have $9145 to put towards your down payment!
Now that you have your down payment in hand, let's compare the two situations
Selling Your Vehicle Private
|Trading Your Vehicle|
|Example Cash Transaction:
Trade In= $0
Selling Price before taxes= $30,000
Selling prices after taxes at 13%=$33,900
Total Taxes Paid= $3,900
Down Payment =$9,145
Effective Price =$24,755
*Savings of $105 Compared to Trade-In*
| Example Cash Transaction:
Trade In= $8,000
Selling Price before taxes= $22,000
Selling Price after taxes at 13%=$24,860
Total Taxes Paid= $2,860Down Payment=$0
Now these numbers can be confusing at times. Especially with all of the hustle and bustle surrounding the purchase of your new vehicle. But because the Down Payment is deducted after taxes you end up paying a lot more in taxes even if your down payment is larger than the appraised trade-in value.
Every situation is different. Sometimes it may be worth selling your vehicle privately, but more often times it's not. Especially when considering the above example. Sure you saved $105! But you have to ask yourself these questions:
- Was it worth the hassle of finding a buyer for the vehicle?
- Was it worth the time out of my days to meet with interested buyers?
- Was it worth the time and money spent cleaning the vehicle, getting it e-tested, and safetied?
- Was it worth having to negotiate with strangers about the price?
- Was it worth standing in line at the MTO for the used vehicles package?
- Was it worth dealing with all of the legal paper work when selling and transferring the ownership of the vehicle?
- Was it worth waiting for the vehicle to sell so then I could go purchase my new vehicle?
Especially if your vehicle is a little less than desirable in the market place at the moment..
As always, I would recommend doing some homework before deciding to make your move.
I hope I was able to help some of you out there. I know it can be confusing. but if you have any questions feel free to comment or give us a call directly at the dealership at 519-822-9200!