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driving concerns

We've just found out that my husband is in the early stages of Alzheimer's disease. He shouldn't be driving, so we want to trade in our two cars for a small SUV (a RAV4 or CR-V) that I'll drive. The dealership said we'd get less than $22,000 for our two cars: a 2014 Honda Civic EX with about 5,000 kilometres on it and a loaded 2009 Honda Odyssey with 100,000 km on it. The offer for the two vehicles is less than what we paid for the Civic last year. And it's less than half of what they're quoting us for the new car. This is my first time doing this, but it doesn't sound fair. Would it be better to try to sell them myself? – Carol, Calgary

The price is right – if you're the dealer. You should be able to get more than you're being quoted for a trade-in – but you'll get even more if you sell the cars yourself, experts say.

"The combined value for these two vehicles appears very low – it's certainly a good deal for the dealer," says George Iny, president of the Automobile Protection Association. "With models in demand like the two here, you'll almost always obtain quite a lot more money selling yourself, but it's not always realistic."

The trade-in price given to you by a dealer will always be lower than what you see advertised on Kijiji or Autotrader, says Radek Garbowski, co-founder of Unhaggle.

"They need to be able to make some kind of profit," Garbowski says. "They might spend a couple hundred to a couple thousand bucks to recondition it – buff out scratches, put on new tires – so they can sell it."

How much lower? According to Canadian Black Book, the average asking price for a 2014 Civic EX is $18,500. For a 2009 Odyssey touring edition, it's $19,900. Add those together and you've got $38,400.

Compare that to trade-in price. Black Book gives a range. It's $14,400-$15,900 for the Civic and $15,400-$17,600 for the Odyssey.

So you're looking at a trade-in value somewhere between $29,800-$33,500 for both.

That's definitely more than what your dealer is offering.

"The Black Book value is sometimes lower than what a dealer will offer in trade, and often higher," Iny says. "A more definitive way to determine the market value of a vehicle is to check local ads for similar vehicles and deduct $1,000 to $2,000 if you're selling it yourself, and $3,000 or more for a trade-in."

Iny says a six-year old car is worth less to many new-vehicle dealers because "it is outside the age range of many manufacturer-supported warranty and financing plans."

One way to get more money for a trade-in is to stay with the same brand, Iny says.

"A Honda dealer, with in-house parts and robust re-marketing support from the manufacturer will almost certainly offer more money for the used Civic than a dealer selling a competing brand," Iny says.

What the law says

While an offer might seem unfair, it's likely not illegal.

"While legislation does not address how trade-in values are determined, we recommend consumers arm themselves with as much information as possible," says John Bachinski, president of the Alberta Motor Vehicle Industry Council (AMVIC), which regulates dealers. "Get quotes from at least three different AMVIC-licensed sales businesses and consider the option of trading in just one vehicle and selling the other."

We checked with other provinces. Prices aren't regulated, but there are laws against unconscionable business practices.

In Ontario, the Motor Vehicle Dealers Act (MVDA) requires dealers to conduct business honestly and the Consumer Protection Act (CPA) prevents businesses for taking advantage of consumers who may be unable to protect his own interests.

"It usually takes a judge to determine if a breach has occurred," says Terry O'Keefe, spokesperson for the Ontario Motor Vehicle Industry Council (OMVIC).

Trading in versus selling yourself

You'll probably get a better price if you sell it yourself, but it's a hassle – and it might take a while. Plus, to get top dollar, you may have to get repairs done.

"The dealer will take a trade any day they're open, but at Christmas time, private buyers are scarce," Iny says. "Women who live alone do not want strangers coming to their homes – a senior with a sick husband may feel the same way."

Trading in means you'll pay less sales tax on the new vehicle you're buying, Garbowski says.

"If the new vehicle costs $30,000, and you get $10,000 on your trade-in, you'll only pay tax on the $20,000," he says.

Do your homework so you know what you should be paying for the new vehicle – and what you'll accept for the trade-ins. But, don't let the dealer know that you want to make a trade-in when you come into the showroom, Garbowski says.

"They'll say, 'We'll give you a great deal on a new car,' but really they'll just give you less for the trade-in value," Garbowski says.

Instead, you and the dealer should agree to a price on the new vehicle first.

"Always separate the transactions," he says."Once you know you have a good deal, then you say, 'Okay, I have these two trade-ins, what can you give me for them?'"

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