The Family Upgrades to a Van
This past week we finally decided to upgrade our family vehicle. Danielle and I have been married for over 10 years and we have only ever owned one vehicle together. We bought a 2012 Hyundai Tucson nearly 11 years ago and it has been such a reliable vehicle. We definitely got our money’s worth.
Many thought we were crazy for holding onto it, even after we had our third child but we made it work. We did our research and found the only car seats on the market that could fit three-wide in the backseat of a compact SUV.
What prompted us to finally upgrade was strictly an investment decision. We likely could have used the Tucson for a couple more years but we knew that we would need to purchase a new vehicle eventually. We recently sold our motorhome and we were skeptical of adding more money into the volatile stock market at this time so we thought a vehicle is a good place to put our money at this time.
New vehicles are in short supply and the prices are incredibly high. I was shocked to find out that a new Grand Caravan basic model is $55,000 with taxes right now. Instead we settled on a two-year old demo model from the dealership that only had 20,000km for half the price at a little over $30,000. We are pretty happy with our purchase and the money we invested should cover us for another 11 years of driving ($2,700 per year).
The dealership offered to take our SUV as a trade-in. But because of its age and because there were more granola bar wrappers and goldfish scattered in the car then you could find in a grocery store, we were only offered $1,000. The salesman in me loves a challenge so I decided to sell this car privately. I knew it needed work but I wanted to present it as best I could so I brought it to Canadian Tire and agreed to do whatever work they needed for a certification. $1,100 later and all new brakes and I had a very presentable vehicle for the hot used car market.
After spending $10 on a car wash and another $10 on some cleaning materials and a nice smelling air freshener I spent an afternoon getting the car ready. After formulating my ad for Kijiji I likely put a combined 3 hours into the process of selling this vehicle.
As a result we got $6,300 for it within a day of listing it. After expenses we made $5,180 or 500% more than I would have made if I simply traded it in. My hourly rate for taking on this sale myself was $1,700. Tax free.
So now our vehicle upgrade only cost us $25,000 (or $2,273 per year if we can make it last another 11 years).
It’s important to always do the math when you are offered a trade-in value. It’s often not as clear as in our case. But if your trade-in value is $15,000 but you think you could get $22,000, it might be worth putting $2,000 and a few hours into selling it yourself. A $5,000 profit, or $1,666 hourly rate is not something to ignore.