Sell or trade-in your vehicle?
Vehicles are one of the few things you can sell yourself or trade in when you decide to buy a new one. Has your local appliance store ever offered to take a trade-in for a new refrigerator?
So what's better, sell the vehicle yourself or settle for a dealer trade-in? It depends on what your vehicle has to offer and the payoff you want. Trading in your old vehicle is certainly convenient, but selling it yourself will likely get your more money. However, it will take time and effort, and maybe even some money to sell it.
The case for selling it yourself
Selling your old vehicle takes more time and know-how, but you can potentially get more money than if you choose to trade it in. That's because you cut out the middleman, the dealer who must spend money to advertise and spruce up your vehicle before it can be resold at a profit. The dealer considers these costs before arriving at the amount for your trade-in. You will face the same issues, so consider them carefully before deciding.
If your vehicle is older or is not in great shape, you'll probably have to get it detailed to make it attractive to buyers. You might even have to spend money on repairs. You also have to consider your time investment in advertising the vehicle and showing it to prospective buyers -- probably on weekends or evenings.
If you do decide to sell, realistically assess your auto's marketability. Selling a popular brand is a lot easier than trying to sell one that's not.
Location also comes into play. A two-wheel drive sports utility vehicle might sell quickly in Florida, but will be shunned in harsher climes where four-wheel drive is a winter-driving necessity. Sales appeal can even extend to color. White, silver and black are popular colors, while purple is not.
When your car does sell, you'll have to arrange payment. Taking a personal check is risky, so you might request a cashier's check from the buyer. If it's someone you know, would you be willing to accept monthly payments?
Another hassle is the paperwork you'll need to complete to ensure that ownership is transferred correctly. Do you have the title? Do you know what your state requires when a car is sold to another consumer?
On the plus side, there are a lot of Web sites that can help you sell your vehicle, from determining the asking price to downloadable "for sale" signs for your vehicle's windows. Some sites even help you sell online by posting your vehicle's specifics for a price. It varies by web site, but generally is based upon how much information you want to post and for how long.
The case for trading in your vehicle
Obviously, the easiest way to unload your vehicle is to trade it in. The biggest appeal here is that it's quick and relatively hassle-free. Plus, it could cut your out-of-pocket costs on your next vehicle. The value of the vehicle can be immediately applied to the new car price. The car can become the down payment and there's no waiting for funds or the need to establish a relationship with a new buyer.
Trade-ins usually are called for when your car is showing its age, with lots of miles, a rusted and dented body, and the tendency for routine maintenance to turn into expensive repairs. It may not be worth much as a trade-in, but the amount that you'll have to sink into it so it will sell may be too high for the effort. Still, you might be able to make an extra $1,000 to $2,000 if you are willing to really work at it and be patient. Then again, that's not always the case.
Sometimes you can make more when you trade it in if there's a motivation for the dealer to step up to the trade.
Some dealers offer more for trade-ins if you have a long-standing relationship with the dealer and have bought new cars from the dealer before. Dealers might also offer top dollar if the vehicle is in exceptional value and has high marketability in the area.
Finally, remember that depreciation will affect the vehicle's ultimate price regardless of whether you trade it in or sell it yourself . Vehicles depreciate quickly, so it might be wise to dispose of it before it isn't worth much in the eyes of a dealer or an individual buyer.
The bottom line: If you have a demanding job, aren't a natural salesperson or hate dealing with details, trading in your vehicle may be the better choice. If you like the challenge of doing it yourself and don't mind doing some extra work for extra money, then selling your car may be a better bet.