Generally, the main differences between both options is:
- Private Sale – you’ll sell the car yourself.
- Trade-in – the dealer takes ownership of your car, and gives you credit toward your purchase.
For a private sale, you will usually get more money for your car. But it can take a long time and advertising your car can be expensive. Once you weight up all the costs and time involved the extra cash may not be worth it.
With a trade-in, the dealer takes all the risk in the car taking time to sell. However, this risk is often mitigated with you being offered a much lower figure than a private sale would fetch. But, the ‘sale’ happens on the spot.
While the choice may appear simple, there are other considerations, and we’ll go over a few of them here.
Selling Your Car Privately
Selling your car privately is a good way to get more for your car and save on new car repayments. After all, the less you need to borrow the more you’ll save on intertest payments and that’s a good thing. But do you have the skills and time to sell your car? Unless you have sold a few cars in the past, it can be hard to tell. It may seem daunting at first, but it can be as easy or as difficult as you’d like to make it.
- Get the paperwork – find out exactly what is required to sell a vehicle in your state. Most often you can check all of this online and print out the required paperwork.
- Settle on a price point – have a look at what similar cars like yours are selling for and set a price a little above what you’d like, as you can expect a buyer to haggle.
- Obtain a car history report – having the history report helps build trust between yourself and the potential buyer. It shows that you have nothing to hide. You are able to order one from Carify or other online services.
- Get good quality photos – you can take these yourself or hire a professional, but it is important the these have your car looking it’s best. Remember people are going to be looking at thousands of cars, and you need something to get them to stop.
Dealership Trade-In
If the price you get for your car is not a real concern, then opting to take the dealer trade-in price can make for a quick and painless transaction. However, you still want to get a fair price for the vehicle you’ve looked after for many years. It is best practice not to take the first offer the dealer throws at you.
Many people think that what ever the dealer offers for your car is the final price, when in fact there are several factors that the dealer considers before making an offer:
- Cleaning costs – if your car hasn’t been cleaned since the last time it rained the costs to detail the car to get it ready for sale will be high. Clean your car as much as possible before taking it in to be assessed.
- Resale Value – the dealer will compare your car to recent sales and make an offer based off this. While there isn’t much you can do about the resale value, knowing the sales range of your car can allow you to negotiate a higher price. Remember though the dealer is buying your car at wholesale value and not retail (or about 50% less than retail.).
- Car Popularity – the more popular your vehicle is the quicker the dealer can sell it.
- Car History – dealers will check the history of a vehicle and if something unusual appears on the report it can lower the offered price substantially.
If you feel the dealer is treating your trade-in unfairly and offering you a low price, you have a few options:
- Prepare to walk from the deal.
- Negotiate harder on the price of your replacement vehicle.
Most dealers will want the sale and be more willing to accommodate you on price than see a sale leave the office. Be firm, but also reasonable!
Which to Choose?
It’s usually best to take every situation as it comes. If you feel that you can get a good price for your car and have the time to spare, then selling private is probably a good option.
If you don’t feel comfortable dealing with people that may come to look at your car and getting a lower offer for your car is not a concern, opting for the trade-in may be a better choice.
Being armed with information is usually the best way to decide. Take your car into a dealer and ask them about the trade-in value of the car, your immediate reaction to the price they offer is a great indication for what you should do.
