When it comes time to get a new car, it can be a really exciting time! The only issue is whether you should sell your old car yourself, or trade it in to the dealership? There are pros and cons to each option, and they are detailed below.
The biggest pro to trading in your old car to the dealership is that it’s easy. You simply drive in to the dealership in your old car and drive out of the dealership in your new car. The dealer will make you an offer on your car, and you can put that money directly towards your new car. You don’t have to deal with any paperwork as the dealership will handle all of that.
However, there is a major disadvantage to this easy process. Because the dealership will still need to make money on your car, they will not offer you retail value. While you avoid the hassle of selling it yourself, you may lose hundreds or thousands of dollars.
While you may not be getting top dollar for your car, this loss of money may be made up, at least a portion of it. In most states, sales tax is only calculated based on the difference between the trade-in value of the old car and the purchase price of the new one. That means if you get $7,000 for your trade-in, and you’re spending $15,000 on your new car, you will only pay sales tax on the $8,000 difference. While this will most likely not offset the full difference between trade-in and personally selling, it can certainly help.
In almost all cases, you are more likely to get more money for your car if you sell it yourself. The buyer will not need to mark up the price after they buy it, meaning they will pay much closer to the retail value for your car.
However, the hassle with selling your car yourself is something you need to be prepared for. Selling something yourself means having to advertise for it, which can include Craigslist listings, signs in your car, flyers, newspaper ads, etc. In addition to advertising, you will need to find time in your schedule to meet with potential buyers and let them test drive and inspect your car, and answer any and all questions they may have. The question you have to ask yourself here is if the extra hassle and work of selling your car yourself is worth the extra money you will make by doing so.
So what should you do?
We advise to try selling your car by yourself first. Usually, you will find you are happy taking the extra steps and making the extra money. If you have not sold your car after a few weeks, consider lowering the price, or perhaps bringing it to a dealership at that point.