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Trade In Your Vehicle Vs Sell it Privately
When you’re considering buying a new car, you have two options when it comes to your old vehicle. 1. You can trade it into the dealer using it as a nice down payment (or just paying off the loan) or 2. You can sell it yourself. When it comes to selling your car, which is the best option? Let’s break down each option and help you decide.
The biggest benefit to this option is that it is easy. You take your vehicle to the dealer, they make you an offer and you put it toward your new car or your existing loan (or both). You don’t have to handle any paperwork like you would a private sale. Also, it can help keep the cost of taxes down. For instance, if you buy a $15,000 car and your trade-in is $10,000, you’re only paying taxes on $5,000 (a 1/3 of the cost), so you end up saving money there despite the biggest con.
The major disadvantage to this option is money. The dealer needs to make money on your car, so you won’t get retail value for it. While you don’t have to deal with the hassle, you can lose money. However, as mentioned above, it helps lower your overall taxable price.
#2 Private Sale
You will likely get more money for your vehicle with this option. This is because the next owner won’t mark it up like that of a dealer. Selling a car isn’t easy and can take time. You also must schedule time to meet with people, allow them to test drive and dealing with banks. Selling your car will take more legwork, but if you have the time and means, it will result in a better return.
Ultimately while selling your own car can be hard, we believe that the hassle is worth it. The difference between a trade-in offer from a dealership and a private selling price can be extreme. Our advice is to try selling the car for a period of time before deciding to trade it in. This gives you adequate time to research vehicles you’re interested in, get financing research and/or pre-approval done and test drives scheduled too.