Should I trade in my car or sell it privately?

Published On
November 4, 2016

There are two benefits to trading in your vehicle at the dealership; saving on taxes and on time.  

Trading a vehicle at the dealership may mean you’ll get less for it (than if you sold it privately) as the dealer will likely only offer the wholesale value, but there are some upsides. There are tax advantages as you’ll only have to pay HST on the cash difference. In other words, if you’re buying a $25,000 vehicle and the dealer gives you $10,000 for your trade-in, you only pay HST on the $15,000 difference – a savings of $1,300. Trading-in your vehicle at the dealership also saves you the time and effort of having to sell it privately – of having to answer calls from tire kickers or waiting for shoppers who make appointments to view your car but fail to show. 

So, if trading in your car makes sense there is one fact you should know. The dealer will ask you to sign a trade-in disclosure document outlining important information about the history and condition of your trade. Dealers are required to do this by law as they must make disclosures to anyone, they subsequently sell the vehicle to.

Common trade-in disclosures include: 

  • If the vehicle has been in an accident or collision resulting in more than $3,000 damage and the cost of the repair if known if the manufacturer’s badging has been altered or if the original production specifications have changed 
  • The true distance the vehicle has been driven 

Dealers are also likely to exercise the following practices to ensure that the information a consumer provides to them is accurate: 

  • Conducting a thorough inspection of the vehicle 
  • Using a paint gauge to identify possible repairs (painted panels) 
  • Consulting a history report to check for previous accidents 

Is the value the dealer has offered fair? 

If you want to know whether the value you’re being offered for your trade is fair, consider resources like it can often provide wholesale values, though these can fluctuate depending on the vehicle (even things like the colour), the location, even the time of year (trading-in a convertible in November versus May).  

So, if you want to maximize the value of your trade-in, get it looking its best, gather proof of maintenance and remember, the dealer will require all the information listed above. 

An educated and informed consumer is a protected consumer. Visit OMVIC’s website to learn more about car-buying rights and when they apply, as well as additional tips on buying a car in Ontario. 

OMVIC protects car Buyers in Ontario 

To learn more about the protections afforded to you under the Motor Vehicle Dealers Act and resources when purchasing from an OMVIC-registered dealer, visit For advice and answers to all your car buying questions, reach out to OMVIC’s consumer support team at or 1-800-943-6002. Plus, explore their free education services and webinars by emailing 

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