When it comes time to trade in your old car for a new one, one of the big questions any driver has to wonder is should I repair my car before trading it in. If your car has been in relatively good condition and you're just looking for a new one or an upgrade, then this isn't a problem. But if the reason you want a new car is because your old one just isn't working well anymore, or maybe it doesn't run at all, this can be a real cause of anxiety. You'll get more for a working car, after all. What should you repair on your car before trading it in? Is it going to be worth the money in time you put into it?
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The Advantages of Repairing Your Car Before Trading It In
There's no doubt about it, a car that is in good repair and runs well is worth more than one that doesn’t. But the matter is not as simple as that. It's not a running car or a broken car, right? There is a range functionality that can still be considered running, and there is definitely a range of problems that can go from bad to worse when it comes to damage.
Selling a car that has been fixed up and looks and runs as well as it can is going to get you the most money in your hand in the moment, but over the long-term, it may not actually be worth what you think.
The Disadvantages of Repairing Your Car Before Trading It In
Of course, you will get a better offer for sale or trade in when your car has been repaired but consider this. The Ford F-150 has been the best-selling truck in America for decades now. So, it's safe to assume it's a common automobile. If you were looking to trade in a 2010 Ford F-150, according to Edmunds.com your trade-in value would be between $5,043 for a truck in rough condition and $7,632 for a truck in outstanding condition.
Now let's say that 2010 Ford F150 looks great from the outside but it has a blown transmission. Getting a new transmission is going to cost somewhere between $1,800 and $3,000. Add in some labour costs of about $500 to $1,200 for a total price of a transmission replacement that can be anywhere from $2,300 to $4,200. And those are just average prices, could be a little more or it could be a little less.
Now if your truck was worth $7,600 to begin with and that's if it was in otherwise outstanding condition, you lost more than half the value repairing it to that state. You actually would have made more money on the deal if you left your truck in rough condition and took the $5,000 trade in.
One thing you need to remember before you commit to paying for any repairs on a car you're going to trade in is that the dealer is able to make the same repairs at a far lower cost than you. You're paying someone else to do it, the dealer has mechanics available there on staff or on contract who will service their cars regularly. That means they're not charging the dealership nearly as much so it's a much better deal for them to fix it than you.
Things That Will Affect the Value of Your Trade In
No one wants to pay more for a car than they have to and any advantage that a buyer can come up with to lower the price they're going to want to take. That just makes sense. You wouldn't want to pay more for your new car than you had to, right? Dealers and private buyers are going to work in much the same way. That's why you need to remember these following factors when considering whether you should repair your car before trading it in.
- Mileage. Your car has been used, that's a fact. There's an old saying that a brand-new vehicle loses 10% of its value the moment it goes off the lot. The value of your car is just going to depreciate from there. Every mile you put on your car is taking some money off the offer that you're going to get when it comes to a trade-in. So, no matter how much money you put into repairing it, you can't peel those miles back off again. Especially if you were a heavy driver and clocked more than 20,000 miles per year. Even if it looks great, a buyer knows that the car was well-used and that means it's more prone to future problems which translates into a lower offer for you.
In general, the car that has over 100,000 miles on it is going to suffer a drop in trade in value as a result. It doesn't matter how reliable the vehicle is, and even if it's going to drive smoothly for another 300,000 miles.
- Vehicle History. So, let's say you got into a serious accident and the front end of your car was crushed. And for whatever reason, rather than totalling the car, you decided to repair everything as good as new. Is that car still worth as much as the exact same vehicle had it never been in the accident? Maybe not. The fact is that the history of the vehicle now is that it was in a serious accident and many parts had to be repaired. To a potential buyer that means that perhaps there were parts that were damaged and not repaired that are at risk of going bad later on. Or maybe there will be some kind of risk that the parts that were put in we're not OED parts. Maybe that means they're not as reliable as the original parts so that will affect the value.
- Desirability. As much as any driver might hate to admit it, there's no guarantee that anyone actually wants their old car. Some models are just more popular with drivers than others. As we mentioned, the Ford F-150 has been the best-selling pickup truck in America since the 1980s. It's hugely popular and there's a good chance that if you want to trade in your old one someone's going to be interested in it. On the other hand, the Nissan Titan is the worst selling pickup truck in America. So, if you have an old Titan, even if you paid to repair it, that might have been money you just flushed down the drain.
- Age. This goes hand-in-hand with desirability, but it is a different consideration. Some older cars are very desirable, classic muscle cars or rare sport cars, or even a car that just reminds someone of their childhood. However, if your car is not a classic or a rare automobile, that age is going to be a factor. Even if it's a model that is popular like the Ford F-150, for instance, buyers looking for a Ford F-150 want one with modern conveniences and technology. If you have a Ford F-150 from the 80s, meaning there's no power windows, no remote start, no navigation system and so on, it's just not as desirable as a newer model.
These are all the factors that are going to affect the trade-in value of your vehicle that you cannot change by paying for any repairs. That's why, at the end of the day, it's often better to simply not repair damage to your vehicle at all unless it's something extremely minor that you can take care of quickly and easily. The main things that buyers care about aren't going to be affected by the repairs you put into it. And the things you can't repair just aren't going to make it worth your while to do so.
How Do Repairs Affect the Value of My Trade In?
There's no guaranteed way to answer this question because there are so many variables to consider. The make and model of the car, the person buying it, the nature of the repairs, and so on. However, as with many things in the automobile world, there is a rule of thumb that you may want to consider. For the most part every $5,000 worth of repairs that you put into a car you can expect the value of your vehicle to be cut by $2,500.
What that means is if you establish the value of your car as being $10,000 and then you get into an accident, you need to pay $5,000 to have it fully repaired again. At the end it's only going to be worth $7,500. No number of repairs will ever get your car back to the “actual” value again.
The Bottom Line
If your car needs some serious repairs and you're not sure that you're going to be able to sell it anywhere, just remember that repairing a car is almost always going to leave you at a loss on the deal. The good news is that Cash Cars Buyer buys cars in any condition. We are able to pay you cash in hand right away, and we can even tow the car away free of charge if it's not drivable. We pride ourselves on making a fair offer for your vehicle no matter what condition it's in.