Trade-in versus private sale

Cars don't last forever, and vehicle owners know they will someday need to replace their current automobiles. When the time comes to upgrade your vehicle, you will face the choice of trading in your current vehicle or selling it on your own.

Some people are interested in getting the highest resale price for their current vehicle, while others just want to make the process of getting rid of their current vehicle as easy as possible. There are advantages and disadvantages to selling privately and trading in, and the choice often comes down to personal preference.

Private sale

A person interested in getting the best price possible for his or her vehicle might benefit from selling it privately. However, it is important to note that this will take more time and effort than simply trading in the car at a dealership.

To get started on a private sale, you must first establish a value for your car. This can be done by using a reputable used car pricing guide. You also can scan the automotive section of the newspaper to see what similar vehicles are selling for and price accordingly. The goal is to entice buyers with a realistic price.

Once you have established a price, it is important to keep the vehicle clean and running smoothly. This way anyone who contacts you about the vehicle will form a good first impression. Therefore, routinely wash and detail the car and make sure to stay current on oil changes and tune-ups.

In terms of advertising the sale, there are many different options available to sellers. Buyers regularly check the classified section of the newspaper (both print and on their Web site), so that is a start and perhaps the most effective way to reach local shoppers. Some people like to post a message on social media or online classifieds. There also are automotive sales sites where you can advertise your car for a cost.

Because researching, advertising and maintaining the vehicle can cost a substantial amount of money, selling it privately may negate the profit you earn in lieu of trading it in. This is the chance you will take if you go this route.

Trade-In

Trading in your vehicle is the other option that you have if you are looking to recuperate some of the cost of your vehicle. The dealership where you are buying your new car will make you an offer for your older car and then put that amount toward the down payment on the new one.

Oftentimes people find that trading-in is the sensible and easy way to go when replacing an older vehicle, particularly because the dealership does most of the work for you. They then will clean and fix the vehicle for resale on their lot or send it elsewhere.

The dealer who accepts your trade must be able to add in a margin for profit; therefore, you are not likely to get the full book value for your car. Rather, you will probably receive what has been dubbed "wholesale value" for the vehicle. This may be a few thousand dollars under what you could sell the car or truck for in a private sale. Therefore, you are paying for the convenience of having the dealer do the work when trade in. However, you will not be responsible for the condition of the car and anything that should happen to it once it is sold.

Donation

Donation is another option for motorists looking to unload a vehicle. Individuals who have a vehicle that is so old it may not be worth much in a trade-in or through a private sale should consider donating it to charity. While you will not make a profit on this or have money to put toward the down payment on a new car, you will typically receive a receipt that can be used for a tax deduction. So it can be financially advantageous in that respect.

Choosing whether to trade in a car or sell it privately depends on personal preference and how much time sellers want to devote to unloading their vehicle.