When it’s time to say farewell to your car, whether it’s a hoopty or a pretty nice ride, you still need to figure whether it would be better to sell it or trade it in. Trading it in is usually easier, but you typically get more money by selling it. Once you learn a few tips, you’ll know which direction to go.
You generally get more money by selling your car. One exception to this rule is if you are leasing. Lease deals are usually more beneficial when you trade in the car and lease another one. Car expert and radio personality Adam Goldfein says you should lease, not buy, if you meet three conditions: you have good credit, you drive fewer than 20,000 miles a year, and you like getting a new car every two to four years.
If your goal is to get rid of your old ride quickly with no hassle, choose the trade-in option. Trading it at the dealer means you get rid of your car immediately and can then show off your new one, if that is the plan. You don’t need to worry about cleaning up your car, advertising it, staying home on weekends to show the car or dealing with folks who say they are coming over but don’t. (ref. 1, page 2)
Dealers make more profit selling used cars than new ones, according to Don Fuller of AutoMedia.com. A trade-in is really the dealer buying the car at less than retail value from the customer of the new car. Offering less than retail value is how dealers make money. If your goal is to make as much money as possible on your car, the better option is to sell it yourself. That way, you can ask retail price and could potentially get it. You could stand to make a few thousand dollars more than what you would get as a trade in. (ref. 1, page 3)
Condition of Car
If your car is in bad shape and is showing its age, a trade-in might be the better choice. A trade-n, in this case, prevents you from spending money on extensive repairs required to sell the car for top dollar. You could end up spending too much time and money bringing the car into shape for it to be worth your while.
Relationship with Dealer
The exception to the rule of getting more from a private sale than from a trade-in comes when you have a relationship with the dealer, said Mark Perleberg, auto expert with NADAguides.com in a Bankrate.com article. If you are a regular customer whom the dealer counts on for periodic sales, he might offer you top dollar for a trade if your car is in excellent shape and is a popular model.
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- Can You Trade in Two Cars for One?
- What Happens When I Return a Lease With Equity?
- How to Buy a Used Car for First Time Buyers
- How to Buy a New Car With No Credit
- Tips on Purchasing a Used Car From a Private Seller
- How do I Negotiate a New Car Deal?