In 2017 alone, Americans bought over 6 million cars and 11.1 million light trucks.
It makes sense to use the money from your old car toward your new car. That leaves you with two options, selling or trading in your old car.
But which is your best option?
A pro and con list can help you make that decision when it comes time to rid of your old car. It will tell you what saves you more hassle and what saves you more money. Then you can figure out what’s more important.
Keep reading for our take on the trade in vs sell battle.
First Things First
Before deciding whether to trade in or sell your car, you should determine what your car is worth. Arming yourself with that knowledge puts you in a better position when it comes to negotiations regardless of how what you trade or sell.
To figure out how much your car is worth, you can comparison shop in a used car magazine. Remember that these cars have a wide variance in specs like mileage, previous damage, and upkeep, so it might be hard to find something comparable to your exact vehicle.
A better way to check the value of your vehicle is to go online. There are websites that will analyze both national and local car sale websites and value your car based on complicated algorithms.
Some of these sites also show you the average amount you’ll receive for trading in that vehicle and selling privately. They might also provide the dealership price as well as the certified pre-owned cost. Keep this information in your arsenal when making your decision.
All you have to do to access the value of your vehicle is fill in some information about the features of your car as well as its mileage and describe the condition. But be honest. You can trick the quoting tool but when it actually comes time to sell, you won’t trick your buyer.
Pros and Cons of Selling or Trading in Your Old Car
We’ve broken down the pros and cons of trade in vs sell into the three most important categories: value, negotiations, and time, and effort.
We’re just going to get this out of the way, the trade-in value of your vehicle offers the lowest return of both options. Dealerships give you less because they have to account for a number of costs when making the purchase.
Those costs include cleaning and prepping the car for resale. They also need to ensure they’re making a profit. Which means you’re not getting anywhere close to retail value for your old car.
What you might consider is that there are tax benefits to trading-in your car instead of selling it. Most states require that you pay sales tax only on the difference between the trade-in value and the price of a new car. Although the tax benefits aren’t as great in states that have lower sales taxes, it’s a cost you’ll want to factor into your decision of whether to sell or trade-in.
Note that, even with those tax benefits, the amount you’ll get for selling your car privately is almost always higher than a trade-in.
If you’re not a great negotiator, think about how much easier it is to negotiate with another private individual instead of a dealership.
The dealership employs professional salespeople who know how to negotiate better than you. Beyond that, you have a shorter window for figuring out a price with them then you will with another private person. When it comes to getting the most out of your old car, you want to take your time to make the best decision for your situation.
It should also be mentioned that a dealership may only be able to offer an auction price for your trade-in. This is usually a nominal amount that you should definitely refuse. But keep in mind that there’s no room for negotiations in these cases.
Time and Effort
The biggest drawback of selling your car privately is that it takes a lot of time and effort. In order to handle the sale, you’ll need to take pictures and post them online and in classifieds with other specifications and a detailed description. You’ll also have to schedule test drives and deal with all the phone calls.
Selling your own car also means taking responsibility for talking to banks and financing companies. You might have people who waste your time, won’t compromise during negotiations, or are flat out trying to scam you out of your old car.
This is where trading-in your vehicle wins. All you have to do is bring it to the dealership, negotiate a price, and sign on the dotted line. The dealership will handle all the documentation and you can walk away with no further duties.
How to Sell Your Old Car Privately
If you decide that making money on your old car is more important than saving time and effort, than keep these items in mind when trying to sell:
- Be flexible on the price
- Be flexible with your schedule when booking test drives and viewings
- Don’t accept payment in the form of a cheque
- Only accept cash or cashier’s cheque
- Clean your car before photographing or showing it, a dirty car can lower the value in a buyer’s eyes
- Be aware of scams
You can use free listing sites to put your car up online. And if you pay for a service like eBay, you can reach a larger market for a fairly small cost.
Selling Your Old Car for Cash
When it’s time to upgrade your vehicle, you have to make room in the driveway. That means deciding how to get rid of your old car. And when you have to decide between selling or trading-in, the choice comes down to whether you value your time or money more.
And sometimes, selling or trading in your old car isn’t an option at all. When that’s the case, consider selling your car for cash. Contact us to find out how.