Thinking about upgrading to a brand-new Toyota? Trading in your current vehicle is a fantastic way to reduce the overall cost and make your dream Toyota more attainable. Understanding how trade-ins work, especially the difference between owned and leased vehicles, is crucial as you Build Your Toyota. Let’s break down the essentials to ensure you get the most value when you trade in and build your perfect Toyota.
When considering a trade-in, the first step is to determine if you own or lease your current vehicle. This distinction significantly impacts how the trade-in process is handled and how it affects your new Toyota purchase.
If you own your trade-in vehicle, it means you have full equity in it. You are considered the owner if:
- You paid for the vehicle in full with cash at the time of purchase.
- You financed the vehicle through a loan and are making payments, or have already paid off the loan.
In essence, if you have the title to the vehicle and are not making lease payments, you own it. Trading in a vehicle you own is straightforward. The trade-in value is directly applied to reduce the price of your new Toyota, helping you build your toyota with greater affordability.
On the other hand, a leased vehicle operates differently. When you lease, you are essentially renting the vehicle from a leasing company. The company retains ownership, and you make monthly payments for the right to use the vehicle for a set period. Therefore, you don’t technically “trade-in” a leased vehicle in the traditional sense.
To leverage the value of your leased vehicle towards building your new Toyota, you must first “buy out” the lease. This involves purchasing the vehicle from the leasing company for the remaining amount owed on your lease agreement.
The process works like this: your Toyota dealer will assess the current market value of your leased vehicle. This value is then compared to the lease buyout amount.
- Positive Equity: If your vehicle’s market value exceeds the buyout amount, the difference can be applied as a down payment towards your new Toyota. This positive equity helps reduce the financing needed for you to build your toyota.
- Negative Equity: Conversely, if the market value is less than the buyout amount, you have negative equity. In this case, you might need to pay the difference or potentially roll the negative equity into your new Toyota financing, depending on your specific situation and lender options. Your Toyota dealer can provide expert guidance on navigating lease buyouts and trade-ins to help you build your toyota within your budget.
To get a clearer picture of your trade-in’s potential value and how it can contribute to building your toyota, it’s beneficial to get an estimate. Canadian Black Book® is a reputable and independent source for vehicle valuation in Canada. By clicking the provided link, you can access their website in a new window. After you’ve noted the estimated value, simply close the Canadian Black Book® window to return to the Toyota Canada website and continue building your toyota with the added knowledge of your trade-in’s worth. Remember to consult with your local Toyota dealer for a precise trade-in appraisal and to discuss all available options to make building your dream Toyota a reality.
