Is it better to sell my car or trade it in?
Often times, when buying a new car, we are faced with the dilemma of how to get rid of the old one and the question comes up, “is it better to sell my car or trade it in?” The answer to that question can vary based on your priorities as both have their own set of benefits. Let’s take a look at a few of the thing you should do to determine which path you should take.
The first thing you’ll want to do is determine the value of your vehicle. If you don’t know what your car is worth, you can’t know if you’re getting a good value for it. The best place to do that is with Kelley Blue Book. While utilizing this resource is a great starting point, it may give you an overinflated sense of your car’s value because a reference web site can’t determine the exact condition of your vehicle. While Kelley Blue Book does let you enter what you perceive to be the condition of your vehicle, it does not require any kind of thorough inspection to confirm that your perception is correct before giving a value. It would be quite easy to say your car is in very good condition, but a mechanic’s inspection could determine that necessary repairs have either been neglected or are due to be needed. So, once you determine the value of your vehicle, you may want to have it inspected by a mechanic to determine if something major needs to be repaired or replaced before putting a price tag on it that doesn’t account for that damage.
The next thing you want to determine is demand. Search the internet, the newspaper, and other used car dealerships to see how many similar cars are for sale in your area. Don’t confine your search to the same make, model and year. Search for similar makes, models, and for a three to five year window around the year your car was made. If you find a ton of vehicles that match your description, you will have to compete against them to get your car sold. If you find very none, there’s a pretty good chance that no one is selling because no one has been buying. A handful of similar vehicles is the ideal situation for those that want to sell their vehicle on their own, but that brings us to our next factor to consider.
What is your time worth? Selling your own car doesn’t just happen on its own. You have to market the vehicle, and take time out of your day for prospective buyers. When it comes to marketing the vehicle, there are numerous websites where you can list your car for free, some of which are very popular. There are other sites that charge once you actually sell the vehicle. Of course, there’s the good old, tried and true classified ads in your local paper. There are also numerous other printed publications that serve a similar function as the classified ads, but they don’t usually offer the same circulation as the paper, so your vehicle is seen by fewer people. Then there’s the matter of prospective buyers. You will likely need to take time out of your day to show the car or offer test drives. Even with online shoppers, investing in a used car is rarely done “sight unseen.” Plus, there is no way to determine how many prospective buyers will have to come along before your car is sold. It could be the first person you show it to, or the twentieth. This process can take weeks or even months before you sell your car. There’s also the issue of the prospective buyer’s perceived value of your vehicle. If they don’t think your car is worth what you do, they may make an offer that is less than what you are asking, which can negate your efforts to maximize what you planned to get out of the vehicle.
That being said, many experts affirm that selling your car on your own will likely net you a higher price than trading it in. Dealerships know going in that trade-ins are going to be a monetary loss, so naturally, they try to minimize that loss. However, some dealerships can offer more than others for a trade-in as leverage on the sale of a new car. But this is often dependent on whether they believe they can resell your car on their lot. If they know that they are going to have to send it to auction, that makes your car less valuable, and more often than not, that is the case. Relating this back to the prospective buyer’s perceived value of your vehicle, if prices being offered are significantly less than what you were asking, then going to great lengths to sell your own car would be wasted when you consider the convenience of being done with your old car the same day you buy a new one.
Ultimately, you have to make the decision on whether you want to sell your car yourself or you want to trade it in. Hopefully, considering these factors will help you make an informed decision.
