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Buying a new car is exciting, but you may be faced with the difficult question of whether you should trade in your old car or sell it yourself.
Besides the money you can get by trading in your car instead of selling it yourself, there are other factors to consider, such as the legwork involved with each option. Let's look at the pros and cons of trading in a car versus selling it yourself.
What is my car worth?Now view the estimated value of my car
Should I change my car?
Trade in your carmay offer more benefits, but you probably won't get as much money for the sale.
Advantage: less hassle
A major benefit of trading in your vehicle is that it ultimately requires less work on your part. The process usually involves going to one or more dealers to get estimates, choosing where to trade in your car, and closing the deal at the dealer by filling out the sales paperwork. The car dealer can take care of the transfer of ownership and registration of the car and possibly pay off your old car loan if you have one. But you should check with the dealer to make sure they handle all these details, which would mean a lot less hassle for you.
Pro: Reduced taxable sales price
If you live in a state that charges sales tax, you may pay less in taxes when you trade in a vehicle. Many states require that you only pay taxes on the difference between your trade-in amount and the price of the new car you buy.
Cons: Lower offers
Car dealers want to make money on trade-ins so they can give you less for your vehicle than what you could possibly get if you sold it yourself. Dealers typically offer less than a car's wholesale price, which is the price a dealer might pay to purchase the car from an automaker.
What is my car worth?Now view the estimated value of my car
Should I sell my car alone?
When it comes to selling your car privately, the biggest benefit may be the money, but you'll have to work for those extra dollars.
Advantage: Higher resale value
Even if you take into account the cost of detailing and any maintenance of your car before it is listed, you can still get more money if you sell it yourself.
For example, Kelley Blue Book gives an estimated private party value range of $13,756 to $15,027 for a 2016 Honda Civic LX Sedan with just under 46,000 miles in the Dallas area. But the resale value range for the same car is only about $11,022 to $12,041. Please note that these price ranges may fluctuate.
To calculate the difference between the trade-in value of your car and the private value, e.gKelley blue bookInEdmundsOffer both trade-in and private appraisals for your car's make and model based on sales in your area.
Disadvantages: More work and time
Sell a cara private party can require a lot of work on your part. You may need to gather documents such as your car's title and maintenance records, determine a fair sales price, clean and list them, screen potential buyers, and even take it for a test drive. And once you've done all that and found a buyer, the buyer has to fill out a bunch of paperwork to register the title of the vehicle in their name.
Selling your car to a private individual can take some time, depending on the type of vehicle you have and the local used car market. During this time you may need to keep your car registered and continue making paymentscar insurance. If you need cash quicklybuy a new caror to pay off a new car loan, selling your car privately may not be the best move.
QUICK FACTS
Sell your car privately if you owe more than it is worth
You can sell a car, you are"other way around', but it can be difficult. If the price the buyer pays for your car doesn't cover the balance of your car loan, you may have to come up with the rest of the money you need to pay off your loan.
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In short
The decision to trade in a car or sell your car privately basically comes down to two questions: how important is it to get the maximum sales price for your old car, and how much work are you willing to put into the sale of it?
But if you still owe money on your car loan and can't pay it off now, you may want to wait before selling or trading in your car. Otherwise, you may not be able to sell your car privately. Some dealers may pay back your old loan if you trade in your car. But if you go the dealer route and owe more on the car than the car is worth, you can eventually convert your current loan balance into your new car loan balance — a step that will reduce your monthly payment and the interest you pay over the term. can increase. a lifetime of the loan.
What is my car worth?Now view the estimated value of my car
