Buying a new car tends to be the fun part, whereas dispensing with your old vehicle is not as much fun. Should you trade it in, or should you take the time and energy to sell it to a private buyer? The answer usually comes down to whether you want to put in the time to potentially gain more money. Here is a chart to help you sort out some of the important issues that will help you decide.
Weigh the Pros & Cons of Selling vs. Trading In
|Private Auto Sale||Dealer Trade In|
|Price||You can often get more money for a private sale than from a dealer||Getting more money isn’t certain||You usually get less money from a dealer|
|Preparing your vehicle for sale:In either case you need to thoroughly clean your car and collect maintenance receipts for the best price||A very clean car with maintenance receipts may be powerful in convincing a buyer||Any mechanical defects may worry a potential buyer||They have their own cleaning apparatus so will be less impressed||Dealers will be focused on what they can get for the car, which may make them more critical|
|Finding a buyer||Involves a lot of work meeting potential buyers. Risk of car being damaged during test drive||Buyer is dealership, entire transaction can take place in a few hours|
|Difficulty of negotiating||You can set the terms and refuse to get embroiled in tiresome negotiations||Could involve exhausting and heavy-handed negotiations|
|Financing||Buyer may have cash||Buyer may have to complete financing arrangements, which can take time and sometimes result in starting over||Dealership takes the cost of old car directly off cost of new car||May get unfavorable or confusing terms|
|Ease of financial transaction when there is a lien on the automobile||Could turn buyers off. May require meeting at lienholder’s office to complete transaction or other measures||Generally everything can be handled from the dealer’s office, often in one sitting||
Greater potential for veiled charges to be added to transaction
|Ease of paperwork, such as title transfer||If auto is paid for, can be simple and straightforward||Can get complicated with liens||Generally simple and straightforward|
|Risk of buyer coming back with issues||Rarely successful||Incumbent on buyer to check out vehicle before transaction, but seller should have document saying that car is being sold “as is” with no warranties and including odometer reading.||Unlikely with dealer|
|State taxes||Car may be less expensive, so lower taxes.||Individual must pay 6.25% sales tax on new vehicle with no break from trade in.||When trading in old car in same transaction as purchasing new, the trade in can reduce the price of the new car and the amount of taxes paid.|
Selling your used car or truck to a private buyer may be more work, but in the end, you can potentially get more money for it. But if getting into your new vehicle is more important than getting a better return value on your current auto, then trading it in at the dealership may be the better option for you.
Once you’ve decided what to do, give the Auto Lending specialists at Credit Union of Texas a call at 214-818-3252 to see about getting pre-approved for your new vehicle with a great interest rate. Or if you’re ready to apply online, visit our Auto Loans page.