Sell your car or trade it in? Which is right for you?
So, the time has come for you to buy a new car. Your current one might not fit your needs or you may have your eye on one or two snazzy new pre-owned vehicles that are more suited to your current situation.
Whatever the reason to find a new car, your high car insurance premiums or unappealing colour, the fact remains that you need to get rid of your current one first. You could sell it privately or trade it in to one of the many pre-owned car dealers in your area, but it can be difficult to know which one is right for you. Outlined below are the pros and cons of both selling and trading in your car.
Selling your car
The advantages
- You will generally get a better sale price: Selling your car privately or to a dealership means that you will most likely be able to get a better sales price for the vehicle. Generally, when selling pre-owned cars, sellers can expect to receive a price that falls between the vehicle’s retail value and the wholesale value. Do some online research to find out what these values are for your car before setting a sales price.
- Easier negotiating: Trading in pre-owned vehicles does not allow for much ‘wiggle room’ when it comes to price, but this is not true when selling it privately. You will have plenty of bargaining power with potential buyers, which means that you should set your selling price high and be prepared to work your way down to a price your buyer can afford. If you do this, you will still be making a tidy sum.
The disadvantages
- The legwork can be time-consuming: The amount of legwork you have to do when selling your car privately can take a considerable amount of time. You have to organise a roadworthiness certificate, as well as make any repairs that need to be done before sale. Other documents include a copy of your ID and a change of ownership form, which you will need to obtain and fill in from the traffic department. You will need to have it cleaned and valeted before any viewings.
- Vetting buyers and the viewing process: Once you have received replies to the advertisements you put out for your car, you will have to go through the process of vetting the buys and showing them the car. You will have to spend time figuring out who is genuinely interested or who is simply fishing for information, and you will have to set up meetings in safe areas for buyers to come and view the car.
Trading your car in
The advantages
- You only deal with the dealer: Pre-owned car dealers are professionals and therefore have your best interests at heart. As opposed to selling your car privately, when you trade it in, you only deal with one person: the dealer. They will handle the transaction from start to finish, meaning that you spend less time on the legwork of obtaining documents, advertising and vetting potential buyers.
- The cost of your new car is reduced: If you own your car outright, many pre-owned vehicles dealerships will apply your trade-in amount to your next vehicle. This can save you a significant amount of money if you are planning on purchasing a car that is slightly more expensive than your previous one or if you are taking out a loan, the amount given back to you can help you to offer a down-payment to your bank when applying.
The disadvantages
- Maintenance is not taken into account: The cost of owning and maintaining a car can become expensive, especially if you have a newer model that has electronic components that need to be repaired. One of the disadvantages of trading in your car is that the dealer does not take into consideration all the time, money and effort you have spent on maintaining your car. They will not factor this into the price they offer you.
- Limited choice of new vehicle: Trading in your car with a pre-owned vehicles dealership means that you will most likely have to choose from their options. This can be very limiting if you have a certain make and model in mind. This limited choice can make choosing a new car difficult and time-consuming as you will have to readdress your wants and needs in a vehicle in order to be able to find a new one.
What is right for you?
Before you make a decision between selling or trading in your car, you will need to figure out what is right for your needs. If you prefer to have full control over who buys your car and what price you can offer, then selling is probably the right choice for you. However, if you do not have the free time to spend on gathering documents and setting up meetings, then trading in your car is the best option. Whatever you choose, be sure to do your research beforehand.
