When the time comes to sell your old car and buy a new set of shiny wheels, you may be wondering how much your current car is worth.
It can be confusing trying to figure out how much your current car is worth when a dealer offers you a price that seems extraordinary low compared to what you thought.
Although used cars do depreciate in value as soon as you drive them off the dealer lot, you’d actually be surprised at the price you could get for your old trusty vehicle.
Here we’ll walk you through what trade-in value means, what factors affect the trade-in value of a car, and how to calculate your car’s trade-in value.
What does trade-in value mean?
The trade-in value of a car is the amount a dealer will offer you towards the purchase of a new car in exchange for the old one you’re selling.
Be aware that dealers may undervalue your car in order to sell it at a profit.
When you sell your car to a dealer, there are usually two options. They can either give you the money for your old car outright, or the money can go towards the sale cost of your new purchase. For instance, if you are buying a car worth $50,000 and your car is valued at $20,000 by the dealer, the changeover price would be $30,000 for the new car. That is what you’d be required to pay.
One of the biggest benefits of trading in a vehicle is the convenience of it. A dealership will make an offer for the vehicle on the spot and give you cash for it very quickly without you having to do any work.
Whereas when you sell a vehicle privately, you can be met with some inconveniences such as the time it takes to sell, the effort (people visiting your house constantly to inspect the car), and the vulnerability of people calling you at odd hours.
So if you want to sell your car quickly without needing to commit to selling it online privately, and if you want help with buying your next one, a trade-in can be very useful.
In order to work out your trade-in value, it’s best to conduct your own research online to see what price your car is selling for in the local area. You do have other options including visiting a dealership, getting an independent valuer to look at the car, and using a trade-in calculator.
What factors affect the trade-in value of a car?
Of course there are basic factors that affect the sale price of a car like condition and maintenance. But what are some of the other factors that people may not think about?
Here are the six things that will affect your car’s trade-in value.
The age of the car
Typically, the older the car is the cheaper it’ll be. The same goes for mileage (odometer). The higher the odometer, the lower the price you will get for your car.
The general saying is that people drive approximately 10,000 to 20,000 km per year. So, if your car is a 2020 model and it has over 60,000km, your re-sale value may be lower than expected as the car has more kilometres on it than average.
The brand/type of car you own
The brand and type of car you’re looking to sell is a big factor that influences trade-in value. If your car belongs to one of the popular manufactures in Australia such as a Mazda, Toyota, or Ford (these aren’t the only ones), you’ll find that they tend to retain value better than a more unknown brand like a SsangYong.
The size/shape of the car
The supply and demand of a vehicle can affect your re-sale value. If there is no demand for your car in the market, you may not get the best price possible.
Typically, location and the size/shape of your car plays a part in re-sale value.
While utes are more likely to retain value in rural areas, an SUV or family vehicle will likely hold more value in a suburban area. It all comes down to location and demand.
Any damage to the car
Take a look at your car right now.
Are there any visible scratches that need fixing? Are there any parts missing or look completely worn out? Has your car been sat in the sun a lot which has caused the paint work to peel or fade?
Any type of damage to a car (like the above) will negatively affect the re-sale value.
If your budget allows you, invest in getting a fresh paint job and replace any missing parts. This will leave a better impression on the buyer and may ultimately increase your car’s trade in worth.
Maintenance and cleanliness
Just as you’d keep your house clean, you want to keep the inside and outside of your car clean. A car with rubbish in the front and back, stains on the seats, and a “smoker-smell” will be unappealing to a buyer.
The easiest thing to bring the car back into good condition would be to vacuum it entirely, remove any marks, and give it a nice soapy wash and polish. Keeping the car in a garage or undercover area where possible is another easy way to avoid damage from acidic substances like bird droppings and severe weather.
The cosmetic appeal isn’t the only thing you want to maintain.
You should aim to have the car serviced regularly and on time. Having a record of your yearly services is known to have a positive effect on sales prices as potential buyers know what’s previously been repaired and what major service items may be coming up.
If your car hasn’t been regularly serviced, this gives dealers better negotiating power to value the car for less than what it’s worth.
Sometimes accessories don’t pay off
If you’ve spent thousands of dollars on adding accessories to your car, you might be shocked to hear that add-ons don’t necessarily guarantee you more money when you sell.
While things like bull bars, tow bars, and tinted windows may appeal to some buyers, others simply may not like the added features. Whereas safety features and modern technology, such as blind spot detection and lane assist, will most likely appeal to all dealers and thus increase your re-sale value.
How to calculate your car’s trade-in value
If you’re ready to calculate your car’s trade-in value, you can do some of your own research, visit a dealership, or get an independent valuer to look at the car.
You also have the option of contacting OnlineAuto who is part of the Firstmac Group, along with loans.com.au.
carloans.com.au and OnlineAuto work together to help buy your brand new car and get you low rate car finance.
OnlineAuto’s trade-in quote generator can give you a solid estimate of your car’s worth before you head into a dealership. When filling in the form, make sure to enter the following details so they can be as accurate and prompt with their quote:
- The make and model of the car
- The car’s series
- The year it was made
- State
- The odometer
- The body type e.g. sedan, SUV, etc.
- The fuel type
If you’re ready to finance your new car, speak with one of our car brokers today to help you find a great deal.