When you’re at the car lot thinking about buying a new car, the harder decision becomes what to do with your old car. Do you want the ease of trading in your old car, or do you want the extra money from selling it privately? The answer to this question may cause you to look at a lot of factors, such as what kind of car you have, its condition, how much time you have on your hands, and the financial implications of the decision.
The Case for Trading In
Plain and simple, you can trade in just about any car in any condition. This means no extra time spent trying to find the perfect buyer at the perfect price—it’s a one-and-done offer and sale that can be applied to the purchase of your new vehicle. Often, to get a quote on your trade-in takes less than five minutes, and you can do this on your schedule—no need to make an appointment. However, with all of this ease comes less money in return for the vehicle. The reason is that a trade-in will either be cleaned up and placed on the dealer’s used car lot (only a small percentage actually make it to the lot) or will be wholesaled at auction. The dealer also has to invest money and time into processing paperwork, prepping the vehicle for sale and potential transportation of the vehicle to auction or another dealer – as a result of this, they won’t offer you money you’d receive from a private sale since you’d be handling this work on your own.
The Case for Selling Privately
Popular models with plenty of features usually have the best opportunity to be sold privately, especially if they have low mileage and are in excellent condition. If you’ve saved all of your maintenance records and can share them with a potential buyer, this can help lead you to a quick sale. If your current car doesn’t fall into these categories, selling privately may not be for you.
Selling privately generally means more money in your pocket, but at the cost of advertising and most importantly your time—it can potentially take weeks to sell your vehicle. You need to be available for potential buyers to examine your car from top to bottom, ask you tons of questions about the vehicle’s maintenance, performance, and scratches/dents, plus be available for test drives. When someone decides to buy, you also have to be prepared to handle payments and transferring car titles. As a seller, you need to make sure you feel comfortable with the time involved in selling privately, and most importantly, feel safe working with potential buyers.
The Bottom Line
In almost every case, the amount of cash you’d receive for trading in a car will be less than selling the vehicle privately. If your car is only a few years old, this amount of money could be significant. On the other hand, if your car isn’t in the best shape, is in low demand or is high mileage, a trade-in might be the best use of your time and money.