For many, buying a new car means going to the dealership and trading in their old car to cover most of the down payment for the new car. It’s fast and convenient.
However, it’s important to remember that it’s not your only option.
Why Selling Your Car May Be the Better Option
If you’re most concerned about getting what your car is worth, selling it yourself is going to get you the most money. There’s a big enough difference between the two numbers that you’ll even have to choose the option of a trade-in value vs. private sale on Kelly Blue Book’s car value estimator.
More cash from a private sale means you can put more on your down payment. This will allow you to save even more on interest in the long run.
Finally, you’ll have more negotiating power if you have the cash to put down and only one vehicle to discuss.
The Drawbacks to Selling
Selling your car can be a lot of work. Instead of just handing over your keys at the dealership, you’ll need to spend time getting your car ready, posting ads and fielding phone calls. You also don’t know how many test drives and back-and-forth conversations you’ll have before making the sale.
After the sale, you may face an angry buyer if something goes wrong with the car shortly after the sale. Even if you do all the paperwork right, your contact information is known and they could harass you. Trading in at the dealership makes it their liability.
1. Look up the value of your vehicle for both options. Kelly Blue Book is an excellent tool and you can also try the National Automobile Dealers Associations’ Appraisal Guide.
2. Think about how much time you have. If you need a car ASAP, trading in at the dealer will be the fastest option.
3. If you decide to go for the extra cash instead of the convenience, get your car ready. You need to thoroughly clean it and make sure it’s up-to-date on maintenance. People usually want a car that’s ready to go, not one that needs work.
4. Print out our Used Car Checklist to go over your own car and inspect the one you have your eye on at the dealership.