While getting a new vehicle is exciting, it can sometimes be difficult to decide what to do with your old one. Should you sell it yourself or trade it in at a dealership? Both options have their merits, so it’s important to carefully consider each before making a decision.
Privately Selling Your Car
Privately selling your car is a fairly straightforward process. As long as you and your potential buyer can both agree on a price, there is usually not much more that needs to go into the arrangement. If they have to take out an auto loan, this will be paid to you once you sign over the car title.
Pros of Privately Selling
- Better prices: You will be able to get a better price for your vehicle, sometimes by more than $1,000. This is the difference between a fair retail price and the wholesale value that dealerships will want to give you so they are able to make a profit.
- No hidden fees: Selling directly will allow you to get the full value for your vehicle, with no middleman or hidden fees included in the deal. Hidden fees at a dealership include things such as extra warranties.
- Selling power: Dealers will give low trade values for older models or vehicles with high mileage (over 100,000 miles). Selling on your own allows you to get a better price for those types of vehicles.
Cons of privately selling
- Time-consuming: Selling privately means a lot of work maintaining your listing and meeting with potential buyers. Therefore, having a relatively open schedule is a must.
- Negotiating: People who are buying from private sellers may be looking for a cheaper vehicle than they can find at a dealership. Because of this, many will often attempt to negotiate the price much lower.
- Ease of sale: Dealerships will take nearly any trade-in. While they will examine your car, private buyers will be much more thorough. They will question every single flaw in your vehicle and their opinion can affect whether or not they purchase your vehicle.
Trading In Your Vehicle
Trading in your vehicle will not take much effort on your end of the deal, besides negotiating with the dealership about the value. After this, the value of your trade-in is applied directly towards the cost of your new auto purchase, which can save you a lot of money on an auto loan.
Pros of Trading In
- No paperwork: The dealer will handle any paperwork involved in trading in your car and purchasing a new car -- all you will have to do is sign and drive off the lot.
- New vehicle: One of the biggest pros of trading in is the value of your trade-in goes directly towards your new vehicle purchase. Additionally, you will only pay sales tax on the difference between your trade and your purchase, rather than the entire purchase price.
- Vehicle condition: A dealership is much more likely to take your vehicle even with imperfections like torn upholstery. Though this will lower the value of your trade, it is much less hassle than dealing with private buyers.
Cons of Trading In
- Lower value: Dealerships are looking to make a profit off of your vehicle, which means that they will offer you less than the retail price.
- Hidden fees: When trading your vehicle in, dealers may attempt to work extra costs into the price of your purchase. These may include extra features or extra warranties and are worked in so that the dealer can maximize their profit.
- Harder negotiating: Dealers will be tougher to negotiate with because they are unlikely to be willing to change their offer very much. Because of this, you will not have as much of a say in the value you get for your vehicle