About Cash For Cars Calgary

 

One of the major concerns in assessing a vehicle’s value is determining how quickly it is likely to sell to another buyer. When someone comes in with a trade-in, we look at the vehicle, walk around it, check it to see if it’s had paint work, and check to see if any damage has been done to it. We’ll also drive the vehicle and check to see what repairs it’ll need to get up to standard for retail sale, or we have to decide if it would cost too much to have the repairs done. In the latter instance, the vehicle would be sold on the wholesale market for a lesser value.

 

There is the potential that you can sell it for more to a private party, but you also have to deal with the non-convenience factor, and that is certainly worth something of value. A lot of people feel uncomfortable with strangers coming into their home to inspect and ‘tire kick’ the vehicle.

 

Understanding the Value of Your Trade

 

When you trade your car in to a dealer, you’re selling it wholesale whether you realize it or not. The wholesale value of your car is approximately what it would bring at a dealer auction, and is hundreds or even thousands less than the going retail price.

 

Now I know what you’re thinking, If I sell my car myself, then I’ll keep the extra money. You’re right, you will and if you can, you should. But you should also keep a few things in mind. You will need to advertise your car, field phone calls, make appointments (some of which may not show and some of which you’ll wish didn’t) as well as let strangers take your car for test drives and accommodate scheduling appointments with their mechanics, only to have them haggle down the price you wanted for your car.

 

Consider also potential hassles with financing and timing. You may find someone to buy your car, but you may still owe money on it. This means they need to pay you first and then wait while your bank processes paperwork before getting the lien released to their new car. Not everyone will be willing to do that. Plus, after going through all the hassles already mentioned, you may need to wait for them to either sell their old car or get approved for financing themselves.

 

And let’s assume you finally sell your car. Can you time things such that you can sell your car and buy a new one without an inconvenient gap where you have no car? Don’t get me wrong–If you can sell your car private sale, go for it. But unless someone is beating down your door with cash in hand you may want to consider selling directly to us and removing the entire hassle.

 

So what is your car worth?

 

The automobile market is as volatile as any market on Wall street, and a number of factors can affect the value of your car positively or negatively. Some cars are notoriously ‘soft’ which means they often bring less than book value while other cars are ‘strong’ and usually bring book value or more. If you want to fine tune your figure, try to compare the book value to what similar cars are selling for in your area. Once you have calculated the ACV, you need to deduct from it any balance that you may still owe on the car. Call your bank and get an accurate payoff amount. The amount left over is your equity in the car.

 

For example:

 

Cash value of trade in = $13,000
Loan Balance/Payoff      $ 8,000
Your cash equity         $ 5,000

 

What if you have negative equity?

 

If you find yourself owing more than your car is worth or ‘upside-down’, don’t panic. This is more common than you might think! First consider selling your car private sale to try and get more for it than its wholesale value. Also use your down payment or any other cash available to you to make up as much of the difference as you can.

 

If you still find yourself upside-down, you may consider keeping your current car a little longer and continue paying it off. If all else fails, you can roll the negative equity into the new car. You are in essence financing your negative balance along with the cost of the new car. This is possible by paying full price (or perhaps more) for a car and using any discount you would have gotten to pay off the negative balance on your trade-in.

 

Even though this happens all the time (Most people are just unaware that they are doing it,) it should be your last option since it sets you up for being really upside-down next time you trade. Many people continually roll more and more negative equity into new purchases. Eventually this catches up with them because banks limit the amount that they will lend on each car. I have seen people owe over five thousand dollars more on their car than it is worth. Obviously this is trouble.

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