You’ve decided to get a new car (or “new to you” car) and deciding what to do with your old car can be tricky. Nearly every person at sometime in their life has been faced with the challenge of “Should I trade in my car or sell privately?”
Many buyers prefer the simplicity of trading in their current vehicle at the dealership even though they may not get as much money for it. Others choose to do the legwork, find an appropriate buyer and try to get a better price. Here are the Pro’s and Con’s to help you make the decision.
Trading In Your Car
The pros of trading in your car.
One of the major advantages to trading in over selling privately is convenience. Dealers will handle all the paperwork and all you’ll have to do is sign your name.
If your car has any minor defects, you won’t have to worry about getting them repaired before trading in. Minor defects such as small dents, scratches or moderately worn tires won’t make a difference in the offer a dealer will give you. Dealers typically handle fixing minor issues before reselling the vehicle.
If you’ve kept your car in good condition, you can also use it as a down payment. Cash can be a very helpful factor in reducing the overall cost of your new car.
If you’re “upside down” in your car loan (you owe more than it’s worth), the dealer can often roll the difference into the new car loan. Word of caution: you’ll be paying a higher payment and lender approval depends on creditworthiness.
The cons of trading in your car.
There’s really only one main disadvantage to trading in your car: you won’t get the price you would if you were selling it to a private party.
Dealers will offer you wholesale price, not its retail value. This means that while you may have determined your car’s market value, expect the dealership to offer you a price that’s less than what you’d get if you sold it privately.
Selling Your Vehicle to a Private Buyer
The pros of selling to a private buyer.
The most basic benefit to selling a car to a private party is the cash.
You are more likely to get close to your ideal asking price when you sell your car yourself. You’ll have more flexibility to negotiate with a private buyer, and you can hold out until you get an offer you’re happy with.
The cash can be used as the down payment on your new car loan, thereby lowering your payment.
- If you have bad credit, the extra cash can help you get a better loan. Lenders like to see larger down payments.
- If you have good credit, and don’t need to lower your new car’s payment, you can spend the cash in some other way. You can probably find a million ways to do that, right?
The cons of selling to a private buyer.
The biggest disadvantages of selling your car vs. trading it in are time and paperwork.
When selling your car yourself, you’re at the mercy of the buying market, and you’ll need to wait as long as it takes for buyers to come calling. While there are plenty of ways to promote your vehicle for sale, you’ll need patience to find the right offer.
Selling privately means all the paperwork duties for the sale fall on you. Make sure you take every step needed, otherwise, you could put yourself in a position of liability if things aren’t handled correctly.
Selling to a private buyer requires considerable effort, including placing ads, taking phone calls, dealing with strangers, and giving test drives.
One last thing: If you want to use the cash from your sale, you’ll need to sell your car before you buy the new car. This means you’ll need to coordinate the purchase of your new car to fit with the sale of your old car.
At Dye Autos, we’ve taken in hundreds of trade-ins and even outright purchased cars from customers in the Denver / Wheat Ridge area who want to work with a trustworthy dealer. We can help you too! Call us at (303) 286-1665 or simply use our contact form >>here<<.