Sell or Trade-in Your Car?
Questions about vehicle trading or sale are easy to decode if you know what you are doing, understand the legalese that is inherent in a car sale transaction, and talk to the right people. Don't worry if you have never done it before; by following a few specific steps, you can figure out the best way to sell your vehicle or trade it in. It is important, though, to remember that you can always enlist the help of a professional-such as a lawyer-if the car you want to sell is in the premium category, say, a luxury or vintage auto, and potential buyers are sophisticated investors with extensive experience in the second-hand automobile market.
How Do I Trade in My Car?
"To trade in your car" means to replace your existing automobile with a newer one, usually after deducting the trade-in value from the newer car's sale price and paying the difference. For example, say you want to trade in your old 2001 Chevy Impala, a value at $5,000, with a 2010 Acura MDX that fetches $8,000 on the open market. The car dealer would review your Chevy and make sure it passes mechanical muster. If everything looks good, the dealer would ask that you pay the price difference of $3,000 to take possession of the automobile.
Let me break down the car trade-in process further, pausing a bit on its pros and cons.
- The dealer makes it as easy as possible to trade in vehicles
- The trade-in typically is very quick, often within a few hours if everything checks out
- The dealer checks the car's trade-in value in front of you, and if you agree on the price, the transaction closes.
- If the trade-in value exceeds the worth of the new car you're getting, you receive a check from the dealer
- Very convenient; you place no advertisement
- You don't have to schedule a test drive nor face a legal battle if something breaks down in a vehicle you recently sold
- You only pay sales taxes on the difference between the trade-in value and the worth of the new car you buy
- You have no control on the trade-in amount the dealer quotes to you
- You can be short-changed because you depend on a single buyer-the dealer
- You can get a better deal if you sell to a private party
Can I Sell My Car Myself?
Of course you can. Just do your homework in advance, so you are fully prepared to navigate the commercial and legal subtleties that invariably come with a vehicle sale. Here are a few steps you should pay attention to:
Assess the vehicle's mechanical condition
Before selling your car, make sure it passes mechanical muster. If you are adept at everything car-related, do an in-depth review of things like engine and brake system. Otherwise, enlist the help of a local mechanic or auto body shop specialist, depending on the defect you want to fix. You are better off spending a few hundred dollars fixing the vehicle upfront because you can recoup that money-and maybe more-on the final sale price. Needless to say, your automobile would command a higher dollar amount if it is in top-notch shape.
Evaluate the car's worth
Check your car's value for free on portals such as Kelley Blue Book, Car Wale, and Cars Direct. Pay attention to the suggested retail value as well as the trade-in amount that dealers and other car reviewers post on those websites.
To boost your odds of a faster sale, try to set a price that nicely fits in the middle range of the suggested retail price and the trade-in value. You can increase it a bit if you feel that the automobile is in top shape and that you have spent enough money on the car to request a higher sale price.
Using an online tool is the fastest and easiest way to gauge your car's worth-plus, it's free. For example, let's use Kelly Blue Book to estimate your second-hand car's worth. On the company's website, you can select a car or browse a list of vehicles.
Choose the below criteria:
- Year: 2005
- Make: Ford
- Model: Crown Victoria
- Mileage: 50,000
- Click "Next."
- Select the car you want
- Sedan 4D – Engine: V8, 4.6 Liter – Drivetrain(s): Rear-Wheel Drive – Automatic – MPG: 16 city/23 highway
- Click "Choose this style."
- Select options to get a specific price
- Choose price type: Private party (price if buying from an individual)
- Click "Excellent" and "Get used car price."
You would see that the final asking price is $6,781. With this in mind, you can set a reasonable price hovering around $6,500.
Review local classifieds
Read the car classifieds section of your local newspaper to figure out how much sellers of similar cars are asking for. You can also canvass local dealerships for the same purpose.
Once you have a better idea of pricing, place ads to tell people-and local residents, in particular-all the goodies your car possesses and why buying it at the asking price is such a bargain. Don't break your budget by buying pricey ad sections in local newspapers. I suggest you go the online route, advertising on social networks, such as Facebook, Pinterest, Twitter, and Google+. They are free, so use them!
If you have set some money aside for promotion, opt for CraigList or other locally focused announcement platforms.
Field calls from interested parties
Adopt a professional bent when answering calls from prospective buyers. Be courteous at all times, even if you find some questions outlandish, incomprehensible, or nonsensical. Remember that customers can be a complex and diverse bunch, and don't forget that the dollar bill has the same color, whether it comes from an extremely smart and auto-savvy customer or a patron who may not have much expertise in everything car-related.
Don't forget to always ask each caller the price range that he or she is comfortable with. Don't be pushy like a salesperson who wants to close the sale of the century, though. Just reiterate the car's qualities, why you think the price is right, and the day and time you are available for a test drive.
How Do I Sell My Auto on Consignment?
A consignment sale means that you entrust the sale of your car to a dealer, a process that frees you from the daily hassle of advertising, test driving, fielding questions, and interacting with expectant purchasers who don't always use decorum when talking to people.
You still have to take care of everything from mechanical fitness and posters to pricing, but the dealer allows you to display the car at his or her dealership. In exchange, you give him or her a commission ranging from 6% to 15%, depending on the car and location, once the car is sold.
In essence, selling a car on consignment is like hiring a dealer to sell a car on your behalf.
How About Donating My Vehicle to Charity?
Donating your car to your favorite charity does not really fit in the context of selling or trading in your car, but I wanted to cover that topic here for various reasons.
For starters, you may not find someone who is willing to buy your vehicle at the price you want. Second, some prospective buyers may require that you do additional repair or substantially discount the asking price. Third, there may be extra fees related to things like vehicle registration and sales taxes, both of which invariably would reduce your take-home money.
So the question is - if you cannot sell the automobile at the price you deem perfect, why not donate it? The process normally is easy and straightforward.
Second, there are tax advantages here because you can claim the fair market value of the car as a charitable contribution, subject to certain restrictions that primarily depend on your income and overall donation amount for that specific tax year.
Third, don't forget the more nebulous notion of "feeling good" when you donate something you know will help someone in need. You cannot put a price tag on that feeling, but it certainly is valuable or, rather, invaluable.
Trading in or selling a car is not difficult if you follow a few tips ranging from advertising to checking the automobile's mechanical condition. The process requires a mix of preparation, diplomacy, attention to detail, and negotiation skills. Besides trade-in and outright sale, you also can consign-sell your car or donate it.