Would you like to buy a new car? Yes? What about your current vehicle? You have an important decision to make. That decision is deciding whether you should opt for a private sale or a trade-in. The best course of action is to closely examine the pros and cons of each beforehand.
Opting for a Trade-In
When opting for a trade-in, you approach a new or used car dealer. You agree to purchase the car in question and the dealer agrees to buy or trade-in your used car. The purchase price of this used car offsets or reduces the amount you owe on your new purchase.
The Pros: It is an easy way out; it is a simple way to wash your hands of your used car. Keep in mind that not all dealerships accept trade-ins and there is no guarantee that your vehicle will be accepted. Good condition, low mileage, and a newer make and model does help. If your trade-in is accepted, you provide the dealers with the vehicle, title, keys, and then you are done!
The Cons: You don’t always get the best deal when opting for a trade-in. Run a value check on the Kelley Blue Book website and you’ll typically notice that the trade-in value for your vehicle is less than the private sale value. This is because dealership will turn around and resell your used car. They need to make a profit, meaning they need to pay less upfront.
Opting for a Private Sale
When opting for a private sale, you typically post a for sale sign in the vehicle window, post an ad on Craigslist or another classified website, put an ad in your newspaper’s automotive section, or you do all three. The buyer comes to you and exchanges cash for the vehicle and title.
The Pros: As previously stated, private car sales tend to fetch more money. For that reason, you will often reap a higher profit when opting for a private sale. Moreover, you have the ability to set the price yourself. Many sellers aim high at first ($500 to $1,000 more than the estimated value provided by Kelley Blue Book). If the car doesn’t sell in a week or two, the price is then lowered. Try this approach.
The Cons: Although you can generally sell your vehicle for more via a private sale, it isn’t a walk in the park. Some cars sellers spend weeks trying to find a buyer. In addition to having a quality and dependable vehicle, you must take the time to market and advertise it. It can be time consuming to post ads online, time consuming to meet with various potential buyers, and costly to post automotive ads in local newspapers. You should decide if this time is worth the hassle; it all depends on how old your vehicle is.
So there you have it! You now know some of the pros and cons of opting for a private sale and a trade-in. If you want or need to buy a new car, please consider all of the pros and cons outlined above before making a decision; do not decide on a whim.
