Deciding which car to buy and how much you can afford to pay is only a small part of the car-buying picture. There’s also the matter of deciding what to do with your old car. You can sell it yourself or you can take the easy way out and trade it when you buy your next car.
The choice of whether to sell or trade depends on a variety of factors and there are good reasons for doing both.
REASONS TO TRADE
If you want to trade your car at the dealership, then they’re going to offer you a deal. Sometimes they don’t even care if the car actually runs and will make you an offer even if you have to have it towed to the lot. They want you to sell you your next car, so they’ll find a way to take the old one off your hands if necessary.
How much you’ll get for your bucket of bolts is another story. Just because they’ll buy your old car doesn’t mean they’ll give you a great price. If you’ve got a real junker, don’t expect top dollar. Be realistic in your expectations if your car is in bad shape.
On the flip side, if your car is in decent condition, then do research to find out how much it’s worth before you drive onto the lot. They want to sell you a new car for as much as possible, but buy your old one for as little as possible. Have an idea of what it’s worth and what price you want for your old car.
If you think it’s a hassle buying a car, then you should try selling one. Since you don’t have a car dealership with business hours, meeting with potential buyers can cut into your free time. Instead of heading out for fun on the weekend, you may have to hang around to meet up with a potential buyer.
You’ll also avoid having to place ads, field phone calls, and answer the same questions repeatedly each time a new buyer shows some interest. Chances are it won’t be the first guy who looks at your car that will make an offer, so expect it to take a chunk of your free time to sell your own car. At the dealership, it’s a done deal in the course of your new car purchase.
Don’t Sweat the Details
A prospective buyer is going to look over the car very carefully. They’ll notice worn leather seats and scuffs on the doorsills. Any cosmetic issues are reasons for a potential buyer to request a reduced price.
The same goes for any mechanical issues, even things that are normal wear and tear. A set of tires that looks a little worn might need replacing soon and you’ll have to adjust the price of your car accordingly.
The dealer isn’t as likely to nitpick and haggle over ever last scratch and scrape. They are generally more willing take a car that’s in less than perfect condition, especially if a new car sale is hinging on that trade. They can opt to resell your old car or sell it for scrap, so it has value to them in any condition.
Lower Down Payment
Trading your car at the dealership means applying that money to the cost of a new car, which reduces your down payment. It’s a part of the sales process and they’ll figure in the value of your old car when they quote you a monthly payment on the new one.
Sell your car yourself and you’ll have to hold onto that money until you buy a new one. It might be hard to resist the cash sitting there and you may end up spending it on something else while you’re looking for a new car. There goes your down payment and a lot of your buying power when you walk into the dealership.
REASONS TO SELL IT YOURSELF
A Better Deal
A dealer still has to get rid of your old car, so his price isn’t going to be as good as what you’ll get selling it yourself. Whether the dealer chooses to sell it for scrap or clean it up and put it on their lot for sale, they need to make money on your old car.
They have to cover the costs of disposing of your old car by reducing how much they pay you for it in the first place. A private buyer doesn’t have to worry about turning over the car and making a profit. It might be easier to trade your car to the dealer, but you’ll almost always get more money if you take the time to do the work and sell it on your own.
That extra cash can either sit in the bank until you need it or go towards your next new car as a down payment. The hassle of selling your car is worth it if you have the time to wait and get the right price and want to get the most money possible.
Your Car is Collectible
If you have a rare or collectible car, then it’s valuable and you really shouldn’t be trading it at the dealership. Most dealers aren’t in the collectible car business, and those that are still aren’t going to give you as much cash as a private buyer. There are individuals out there who are constantly searching for the classic car of their dreams and they’re willing to pay a premium to put that car in their driveways.
Take the time to figure out your car is worth and sell it yourself to get a far better price than you will at a dealership. It may take some time to find the right buyer and determine the sale price, but if your car is a collectible, then a little patience will definitely pay off in the end.
You’ve Got Time
Deciding to get rid of an old car and buy a new one isn’t a decision that happens overnight. It usually involves months or at least weeks of coming to the conclusion that it’s finally time to buy a new car.
It can take just as much time to find a buyer willing to pay your price. As long as you’re not in a rush, listing your car for sale and then waiting for the right buyer is a good idea.
Be ready to turn down any offers that you feel are too low. The buyer can always come back with a better offer if he really wants the car, or you can wait for someone who is willing to meet your price. It takes more time to sell your car for the price you want, but it will net you more money than rushing into the dealer and selling it to them on the spot.