Selling privately or trading in your car: Which one will get you more?
Whether you’re planning to sell your car privately or trade it in, there are advantages and drawbacks to both options. We weigh up the pros and cons of each, to help you make an informed decision when the time comes to change your car.
Trading in a car
This is one of the most common transactions when getting rid of a used car. You simply take it to the dealership where you’re planning to buy your next car, you and the dealership agree on a value for your old car, which will then go towards paying for your next one. In one fell swoop, you’ll have accomplished two things: your old car will be off your hands, and part of your new car is paid-for already.
It's quick and easy, but there is a distinct downside to taking this route as well. That revolves around your old car’s agreed-upon value, which is almost certain to be lower than the car’s actual market value.
Related: Can I trade in a car I just purchased?
Trade value versus retail value
There’s a simple reason for this: To turn a profit when selling your old car on again (at retail value), they’ll need to offer you less than retail on your trade-in. Add onto this the possibility that your car may need servicing or repairs before being sold, and the trade-in value takes an added dip.
The only way in which a dealership may offer you more than the basic trade-in value (or even less) will be if you’re interested in a much more-expensive car, or if they really want to get your new car out the door. Remember that inventory costs money just to keep in stock, and if it sits unsold for a long time, the dealer may incentivise its sale with a particularly generous trade-in offer just to get it off their floor.
Related: Can I trade in my car at a different dealership?
Selling privately
Selling your own car without involving a dealership has one major advantage over trading it in: You will be able to sell your car for more than a dealership would offer you. The buyer will be just as happy as you would be, because they’ll end up paying (perhaps even slightly less than) retail value than they would when buying at a dealership.
This is a win-win situation for both buyer and seller, but there are some concerns worth noting. Firstly, be aware that there are crooks everywhere, just waiting for a victim to defraud. There are numerous security risks involved, and you’d be well-advised to follow the guidelines in this article closely.
Related: Top 5 scams to watch out for, when selling your car privately.
Conclusion
You will be able to get more for your old car if you were to sell it privately, than if you were to trade it in at a dealership. However, this comes with some hazards – most of which can be avoided, if you follow some basic security measures when it comes to demonstrating the car and handing it over to the buyer.
