Tuesday, May 18, 2021

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Should You Trade-In Your Used Car or Sell It?

Your car has been with you for many years. It has been the old faithful, reliable vehicle to get you to many destinations on time. However it’s good days are limited.

With an aging car you have decided it needs an upgrade. You even know the new car you want. It is at a car dealership and you are happy with the price. But the question remains of what to do with your current vehicle?

The main options run through your head of whether to sell it privately or to trade it in when making your new car purchase.

In order to help you make your final decision, let’s first analyse your options.

Options #1 – Trading-In

Any car dealer will present this as an option to you, to help lower the purchase price of your new car. The new car you may be interested in could be brand new or second hand, it doesn’t matter.

For the dealership, they are willing to take your old vehicle from you and then reduce the purchase price of the car you are buying.

Pros with Trading-In

The main benefit of trading in your car to the dealer selling your new car is convenience.

You do not have to waste time, money or effort to advertise your car in order to sell it privately. You only deal with one person, the car salesmen who both buys your current car, as a trade-in, and sells you a new one.

For people who want a quick transaction this seems like a great option, and in some cases it can be a good way to go.

Cons with Trading-in

However, this option has its disadvantages too.

The main issue with this option is that the dealer will not provide you the best price for your vehicle. Instead of paying the market value of your vehicle, they pay what is known as a wholesale price.

This allows them to resell your vehicle at a profit. Of course they will normally spend some money on it first to give it a thorough safety check, service it, repair any issues and perform a full detail to present it in the best way possible. 

Another issue may be that they consider the trade in value to be zero dollars. This could be due to it being too old or requiring too many repairs to get to a sellable state.

In these cases they may say something like, we will take your car to dispose of it for you but cannot give you any trade in price for it. If you get this option, never take it. There is a better option (#3) that we will mention below.

Option #2 – Selling Privately

The other main option is to sell your current vehicle privately.

This is the way that most people sell their car, especially if they are planning to buy another car privately. In these instances, trading in is not an option as they are not buying from a car dealership.

Pros with Selling Privately

The main benefit of selling privately is you get to sell your car for the market value.

With trading in you only have the option of trading in to the car dealer you are buying your new car from, so your negotiation is limited. However with selling privately you can hold out until you get a price you are willing to sell it for. 

Cons with Selling Privately

Of course selling a car privately takes time, money and effort. First you need to advertise the vehicle in either online websites or local newspapers, bulletin boards, car groups, etc.

Each place you advertise may cost money and requires you to craft a compelling advertisement  including posting many photos. But before the photos are taken you need to present the car in its best light too.

This means you should complete any repairs that are due, maybe perform a service and give it a good clean both inside and out. Then you can take photos and try to keep it clean for when people want to come and inspect it before making an offer.

All of this takes time. Then you need to be available for people to come to inspect, take it for a test drive and then make low ball offers. This can all be very frustrating to say the least.

Option #3 – Cash for Cars Companies

Perform a quick search in Google and you will realise there are many cash for cars companies in your local area. These companies provide a way to sell your car fast for quick money.

Pros of Cash for Cars Companies

There are many benefits of dealing with a cash for cars service provider. For starters they buy all makes and models and are not deterred if your car is old, damaged, unregistered, totaled or not working.

Also they offer a super quick turn around. In fact if you find a local service provider they will often be able to pick up your car and make payment on the same day that you call them.

Cons of Cash for Cars Companies

Of course every service always has some downsides. The main problems with cash-for-cars companies is they often pay low rates.

The reason for this is they buy damaged cars to scrap them. This means they strip it for re-sellable parts and recycle the rest. 

If your car is in a working condition, then they will pay you more, but still not the market value. The reason for this is they will then resell the car at a higher price to make a profit.

At the end of the day they are a business that needs to make money to survive too.

What Option Will You Choose?

So now you have the pros and cons of either trading in or selling your car privately, what option will you choose? You may even choose the third option of selling your vehicle to a cash for cars company.

At the end of the day, the option you chose will be dependent on how good your current vehicle is. Also how much time and effort you are willing to put into selling it.

If your car has good resale value and does not require any repairs, then you may choose to trade it in for a quick way to lower the price of your new car purchase. If you want to get more money for your car then you should go the longer route of selling it privately.

But if your car is in a really bad state then the dealer will not offer you very much for it. Also selling it privately will be hard as no-one wants to buy a car with issues. In this case, contact a cash for cars company and get some fast money in your pocket.

The good news is you have options.

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