Should You Trade in Your Car or Sell It Privately?

So you’re ready to buy a new car, and you need someone to take your old vehicle off your hands. At this point, you have two choices. You can either trade your car in at the dealership or sell it privately. The trade-in option affords the most convenience, while selling privately will yield more cash. Read on to learn whether you should trade in or sell your old car.

Trading In

Trading in your old vehicle at a dealership is indisputably the easier of the two options. Dealerships can sell your old car for more than they pay you for it, which is why dealers readily accept trade-ins. When you trade in at the dealership, the transaction typically takes place the same day you purchase your new car. The dealer quotes you an offer on the value of your trade-in based on its age, condition, and other factors. If you accept the offer, the dealer will automatically deduct that amount from the price of the new vehicle. In many cases, dealers are flexible on the trade-in amount, which means you have the ability to negotiate when appropriate.

Advantages of Trading In

When you trade in, you don’t have to worry about the expense and hassle of selling a vehicle privately. Trading in makes the dealer responsible for your old car, so you are indemnified against potential liability. You also save yourself the time of advertising your vehicle, showing it, and dealing with the sales transaction.

Pitfalls of Trading In

The single-biggest pitfall to trading in a vehicle is that you will receive significantly less than the vehicle is worth. In other words, you pay a price for the convenience of the trade-in option. You will almost always get more for your car if you sell it privately.

Selling Privately

Selling your vehicle privately will ensure that you get top-dollar. A private sale will give you the cash that would have otherwise made the dealership a profit on your trade-in. You are much more likely to receive the Kelley Blue Book value of your vehicle when you sell privately.

Advantages of the Private Sale

The biggest advantage of a private sale is that you will receive the maximum amount of money possible for your vehicle. You don’t have to hassle with the dealership middleman; all of the profits will go to you. Ideally, selling your car privately will give you more cash to put down on your new vehicle.

Pitfalls of the Private Party Sale

If you choose to sell your car independently, you accept all post-sale liability. To avoid potential legal battles, you have to clean and fix your vehicle to the point that it is safe and ready for sale. The time and cost of doing so can be significant. Moreover, you must pay for the cost of advertisements and allow for the time it takes to receive calls and meet prospective buyers. When all is said and done, the cost of a private sale can far exceed the monetary benefits.