It’s time to say goodbye to your old reliable car, but should you sell it privately or trade it in? Both options have their pros and cons, but with the right approach, you can minimize financial losses. Here are 10 tips to help you make the best decision.

10 Car-Selling Tips To Consider

1. Don’t name your price first

If a salesperson asks how much you want for your car, don’t give them a number. Let them make the first offer to avoid limiting your potential trade-in value. If asked, let them know that your primary interest is minimizing your net cost, or trade difference, after an allowance for your trade.  Avoid providing any firm numbers, despite their repeated attempts to enquire, as they will be resolute in getting you to throw out the first number.  

2. Tax benefits of trading in

Trading in your vehicle at the dealership can save you on sales tax. When you trade-in, you subtract the value of your car from the sales price of the new one, and you only pay sales tax on the difference in value. For example, if your trade-in is worth $20,000 and your state has a 5% tax, you could save $1,000 compared to selling it privately.

3. Don’t clean the car too early

If you’re just browsing, don’t clean out your car beforehand. A spotless trunk signals you’re ready to buy, potentially weakening your negotiation position.

4. Watch out for the higher offer trick

Dealerships may offer more for your trade-in but mark up the price of the new car. Don’t be fooled by the dealer that simply offers you the highest price for your car, as they may be getting you on the other side. Always look at the total cost.

5. Fix the obvious issues

If selling privately, get the obvious repairs fixed up front, and perform the routine service, like an oil and filter change. If your vehicle needs obvious repairs, private buyers will discount its value by at least 2X of the cost of the repair, as they will be concerned that it can’t be fixed, or that repairs will end up being more costly.  Buyers don’t want to inherit a problem; they want a car that they can drive home with confidence, and is trouble-free.

6. Check your car’s history report

Run a vehicle history report before selling. Surprises on a report could deter buyers or lower your asking price. If you’re the original owner and have never had any problems or accidents, it’s possible to skip this step.

7. Organize vehicle documentation

Present your service records and manuals in an organized manner to instill buyer confidence. If you have them, make sure to include the vehicle registration, window sticker and any operating manuals that you received, so that you can present them to any possible buyer.  

8. Trade where it makes sense

If your trade-in doesn’t match the dealership’s typical inventory, expect a lower offer. If you are at the BMW dealership, and you’re looking to trade in your 10 year-old Corolla with 120,000 miles, don’t expect a good offer. They won’t want your car, and will sell it straight to a wholesaler. Keep this in mind when thinking about a trade-in. 

9. Meet in a public place

For safety, meet prospective buyers in public spaces like designated safe meeting zones rather than your home.

10. Pay off loans before selling

If possible, pay off any loans before selling. Having a clean title in hand, goes a long way towards resulting in a seamless transaction, versus having to get a bank involved. Sometimes banks will take weeks to send you a title that is free of liens, and that is enough to sour a lot of car deals. Similarly, make sure that you ask the private buyer how they intend to pay for the car. 

Conclusion

Selling or trading your car doesn’t have to be stressful. By fixing minor issues, getting paperwork in order, and strategically timing your sale, you’ll increase your chances of getting a good offer. The more certainty you provide the buyer, the more they’ll be willing to pay. Learn more about resale values with CarEdge Research.