880 Walkers Line, Burlington, ON, L7N 2G2, Canada

Trade In Vs. Down Payment On a Car: What's The Better Option?

Trade In Vs. Down Payment On a Car: What's The Better Option?

You have a couple of ways to dispose of your old car when planning for a new one. You can sell it privately, trade it in or sell it to a dealership. As the organization that can help with the latter two, we thought we would discuss which might be best. So, we asked our Acton auto loans team to consider whether it’s better to sell your car privately and use a down payment or trade in your old car to raise money for your next car.


Down Payment or Trade in when Buying a New Car?


If you’re buying the same make and model of car, trading in can work well. If you’re changing manufacturer or want to keep the two transactions separate, selling your car to a dealership would be beneficial.


For example, if you’re a Ford owner buying another Ford, trading in can work. You’ll be selling a car to a dealership that sells that make, which is a benefit.


If you were selling a Ram to a Ford dealer, you may not get the same trade in offer as you would if you traded it in at a Ram dealer. The Ford dealer doesn’t necessarily have the market to resell it, so may offer less.


Trading in isn’t such a good idea if you work with certain dealerships. It’s too easy to leave money on the table when getting into the numbers between the trade in, purchase price of the new car, down payment and loan payments.


Selling your car to a dealership


For some, it’s far easier to sell your car to a dealership and get paid. Then buy the new car as a separate transaction. This prevents confusion and ensures you get a good deal on both transactions rather than risk losing out on one without realizing it.


The process of trading in and selling to a dealership are largely the same anyway so there’s little to choose between them.


You need to:


Prepare the car for sale – Give the car a clean inside and out and make it look as good as it can.


Make any cosmetic repairs – Repair dings and scratches on paintwork or chipped glass where appropriate. Don’t spend too much money but do what you can.


Make any minor repairs – Check all lights work, check the condition of tires, check wiper blades, check interior switches and make any minor repairs an appraiser would notice.


Make an appointment for the appraisal – You can just drop in while you’re passing but we recommend you book an appointment. That way, we can guarantee to not keep you waiting around and assess your car quickly.


Accept the offer and get paid – Once the appraiser has done their thing, they will give it a value and make you an offer. You can accept and sign the deal or negotiate if you think the offer is low.


Once agreed, you’ll sign the car over to us and get paid into the bank.


You can use that money as a down payment on your next car or however you like. It’s entirely up to you!


We will use all our skill and experience to deliver the lowest possible Acton auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.


Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!

Categories: Auto Loan

Tags: ,