It's a problem faced by consumers since the first car was traded in: is it better to sell or trade in used cars? Answer these 7 questions about selling or trading in your used car and you’ll have a good sense of what your decision should be. By the way, there is no definitive right or wrong answer, which is why I developed these questions for you to figure out if you should sell or trade in your used car. If you answer yes to 4 or more of the questions, though, you’re probably a good candidate for selling your used car on your own.
What shape is your used car in?
If your car is in good shape, you might consider selling it yourself. If you need to make repairs, though, you need to ponder how much you’re going to invest in the repairs. The truth is you might not recoup the entire investment. So, weigh the possible cost of repairs against the potential added value. By the way, all references to “car” are generic and encompass trucks and SUVs, too.
Regardless if you sell or trade in your used car, it has to be in good shape. Follow my step-by-step instructions for selling or trading in your used car.
Do you like doing research?
A lot of research is necessary whether you sell or trade in your used car. (Well, one good sign is you’re here at About.com, which means you know how to use a computer.) Trading your used car in requires going to the top three valuation sites: Edmunds.com, kbb.com, and NADA.com and establishing a price you will realistically get for your used car if you trade it in.
Selling your car requires the same step, but it also requires you researching the best methods for selling your used car. You also have to research how to make the transfer when the time comes as well as research what others in your area are trying to sell their used cars for.
Also, as a seller, you have to know your car inside and out when it comes time to sell. Savvy buyers will walk all over you if you don’t know your used car well.
Do you like to sell?
To be successful at selling a used car, you have to like selling. You’re going to have to convince somebody to buy your used car. As mentioned above, you have to know your used car inside and out. You also have to be prepared to counter people’s objections.
Check out sales.about.com for more information on selling. There is some good basic information there on the basic skills needed for selling. The most important piece of advice I can impart is “Be enthusiastic.” Make potential buyers excited to purchase your car.
Do you like people?
Be honest. Do you hate meeting new people? Are you concerned for your safety? Well, if you sell your used car yourself, you might meet a lot of new people – and some of them might post a risk to your well being.
Sure, you’re going to deal with new people at a dealership. The difference is these new people aren’t going to be invading your personal space, calling at all times, and asking lots of questions. I once advertised a used car and had to endure questions about my school district, traffic on my street, and if the car could hold a cello. Obviously the last question was important, but what did the other two have to do with the car?
Do you like paperwork?
When you sell your used car to a dealer, the dealership has staff to handle the paperwork for you. Basically, you drop off the keys and they present you with a neat and tidy package of papers to sign. Your plates either get transferred or you get a new registration depending on your state’s practices.
When you sell your used car to a private buyer, you have to do all the paperwork yourself. You have to make sure the transaction is handled properly and the title transfer is done correctly. Do it wrong and you could continue to be the owner for tax and liability purposes. Plus, you have to go to your motor vehicle office and effect all the necessary paperwork changes. I’m freakishly lucky when it comes to the motor vehicle office, but others aren’t and it can become an all-day experience if you do something wrong. (Maybe I’m lucky because I ask for help before doing anything. I don’t believe in fighting bureaucracies.)
What is your time worth to you?
People totally underestimate what it costs to “earn” money sometimes. I saw a comic strip the other day about one brother telling the other to drive around to find a parking space with time left on the meter. The second brother says, “You want me to spend $2 on gas to find a meter with 50 cents?”
Let’s look at a 2003 Grand Prix as an example. It’s worth $5672 to trade it in and $6807 if you want to sell it. Now, the difference isn’t going to be $1125. You have to factor in how much time it will take you to prep the car for sale. Plus, as mentioned above, you’ll have to handle all of the paperwork for the sale, including paying off your car if there is money left on the loan, getting the title sent to you, and then signing it over to the new owner.
And, finally, you have to factor in how much time you’ll spend showing your used car to people who aren’t going to buy it. The Grand Prix in this example isn’t going to ignite a lot of people’s interest, but a sports car might.
Another factor in selling your used car is how long you’ll have to carry two car payments if that’s your particular situation. Plus, by selling it yourself, the value from your used car can’t be applied to your new car until the old one is paid off.