BD:Blog:a-car-valuation-guide-drive-it-into-the-ground-or-trade-it-in
BD:Blog
BD:Car
Budget Direct

A Car Valuation Guide: Drive It Into The Ground Or Trade It In?

Looking for smarter
Car Insurance?

Get a Quote

A Car Valuation Guide: Drive It Into The Ground Or Trade It In?

Whether to drive your current car into the ground or trade it in for an upgrade is a big decision to make.

While the thought of cruising around in a shiny, newer model is certainly appealing, it could put a dent in your budget.

Before you make such a big choice, understand what it means to keep your old car versus trade it in for a new one. What should you consider before upgrading your vehicle? And how will you receive fair compensation for your senior vehicle?

This guide can steer you in the right direction.

Keeper or Trade-In?

Pros of a Keeper: Keeping your car to drive ‘until the wheels fall off’ does have its benefits. First, you’ll have the chance to pay it off. This means (eventually) no monthly car payment, but years of future service from a car that still runs.

If you believe you’re ready to upgrade your ride, trading in your old car at a dealership is an easy way to get extra money.

An older auto can save you money on repairs. For example, if you dent your mudguard, you might opt not to pay to fix it if you can drive it just fine. Conversely, you may be obligated to make certain repairs on a newer car, particularly if you’re still making payments on it.

Pros of a Trade-In: If you believe you’re ready to upgrade your ride, trading in your old car at a dealership is an easy way to get extra money — that is, a down payment — towards a newer, improved vehicle. This newbie will likely give you more kilometres for your petrol intake, and better safety and technology features.

Trading in with a dealer allows you to conveniently dispose of your vehicle without the hassle of writing (and funding) a classified ad. Not to mention, finding time to meet with potential buyers.

TradeIn3

Going through a dealership dismisses worry that can come with giving out bank details or wondering whether your purchaser’s cheque will cash. At a dealership, you generally sign some paperwork, and you’re done. You also won’t have to mess with obtaining administrative requirements like the safety certificate or funding fix-ups. That’s the dealer’s job.

Before You Upgrade…

Convinced to trade in your old car for a newer vehicle? Here are some questions you’ll want to consider first.

Will a new or used car be more in your price range? Factoring in the cost of yearly registration, maintenance, petrol and insurance is as important as the vehicle’s price.

What’s your budget?

Will a new or used car be more in your price range? Factoring in the cost of yearly registration, maintenance, petrol and insurance is as important as the vehicle’s price.

Should you buy or lease?

Buying is usually the better use of your money. Leasing is a suitable option, though it involves never-ending payments, which make it hard to know how much you’re spending on the auto, separate from interest and fees. With buying, you’re always clear on the car’s price and you won’t be paying for it for the entire life of the car.

Sure, leasing could get you a fancier car, but if you can’t afford to buy it, you should consider if it’s really in your budget at all.

What type of car is right for you?

You’ll also want to determine what type of car is right for you. If you frequent the city, you might opt for a smaller car — about 1-1.6 litre — to save on petrol. If a larger vehicle better suits your lifestyle, remember it’ll be more expensive in terms of upkeep, registration, fuel and tyres.

Card 1b

Will you resell?

Think about the resale value of the car you want. Popular models hold their value well. If you might upgrade again in a few years, consider resale value seriously pre-purchase.

Determine the Value of Your Car

A dealer will likely value your car roughly 10-20 per cent below the price they’ll sell it for, to make a profit. So, before you make a trade, do your homework to determine the true value of your older car.

The biggest mistake people make is not knowing what their current vehicle is worth when they walk into a dealership.

Do your research.

Bankrate quotes: “The biggest mistake people make is not knowing what their current vehicle is worth when they walk into a dealership,” says Jack Nerad, executive editorial director and executive market analyst for the Kelley Blue Book website, a renowned resource for obtaining vehicle values in the U.S. “The key to doing well with the dealer is to be knowledgeable.”

What’s a good asking price?

It pays to research your car’s value online, according to Scott Painter, founder and CEO of Zag, a U.S.-based auto shopping, research and pricing technology platform, also quoted by Bankrate. “Pretend you’re a buyer and look up your kind of (trade-in) vehicle,” he advises. “Look at what other people are asking for your particular type of car, especially in your local area.”

Redbook.com.au is a trusted resource for car valuation, specifications and pricing guides in Australia. It offers a free assessment tool based on your car’s year, make and model. To see and compare what buyers are asking for your vehicle, browse Carsales.com.au, a dependable automotive classifieds site.

Card 1a

How old is it?

You car’s age will definitely impact its value (probably decreasing it, unless you’ve got a rare, vintage collector’s item on your hands). Owning a popular brand and model, regardless of how old, can improve your auto’s worth.

You’re in luck if your car has an automatic transmission. They’re typically higher in price than manuals, which can heighten your vehicle’s value.

What’s its condition?

Poor condition can quickly diminish the market price of your vehicle. This is where regular servicing of your vehicle can pay off.

Handle outer scratches and dents, and inside damage like stains and tears soon after they happen. These imperfections all affect the car valuation. Wear and tear is often related to an odometer housing thousands of kilometres, which can also decrease your vehicle’s worth.

You’re in luck if your car has an automatic transmission. They’re typically higher in price than manuals, which can heighten your vehicle’s value.

Finally, if your auto has extra goodies like massage or heated seats, enhanced safety or technology features or any innovations not included on standard models, you can expect its worth to be higher.

 

Sources

http://classroom.synonym.com/keeping-old-car-vs-buying-new-car-5933.html
http://www.racq.com.au/cars-and-driving/cars/selling-a-car/trading-in-an-old-car
http://www.drive.com.au/buying-tips/get-top-dollar-for-your-tradein-20090731-e3vd.html
https://www.moneysmart.gov.au/life-events-and-you/life-events/buying-a-car
http://www.mensfitness.com/life/cars/10-things-consider-buying-new-car?page=2
http://www.bankrate.com/finance/auto/4-steps-to-boost-car-trade-in-value-1.aspx
http://www.redbook.com.au/
http://www.comparethemarket.com.au/blog/car/your-car-valuation-checklist/