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TRADE IT OR SELL IT?
Often, the most difficult decision you need to make when purchasing a new vehicle is figuring out what to do with your current vehicle. This article discusses the options available to you when trying to get rid of your current vehicle.
Trade It In
Trading in your old car is the easiest thing to do.
In fact, most dealers want your old car so they make it as easy as possible.
Trading in a car is usually a same-day transaction with minimal fuss.
The dealer will assess the condition of your car, its age, and other
factors and will determine its trade-in value. The trade-in value
is the price the dealer will offer for your car with the understanding
that the value of your trade in will be applied to the purchase or lease
of a new vehicle.
Trade-in value is generally lower than the amount you could sell the car for yourself, but by trading in you avoid many headaches.
Trading in is about convenience - there are no advertisements to place, no test drives to arrange, and no legal battles to fight if your vehicle breaks down after you sell it. Once a car is in a dealer's hands, it's the dealer's responsibility to prepare it and handle the resale.
Trading in may also offer a tax advantage if you are buying a vehicle at the same time. In most states, according to dealers and regional authorities, when your car is taken in trade you only pay sales tax on the difference in cost between the trade-in value and the price of the new car. For example, if a dealer gives you $10,000 on your trade-in and the purchase price of the car you are buying is $30,000, you will only be required to pay sales tax on $20,000.
Sell It Yourself
Selling your car by yourself is the best way to make
sure you get the highest possible price. Honestly assess the car's
condition, and then decide on how much you want to spend on minor repairs,
always remembering the liability involved with a private-party sale.
Be sure to fix things well enough to avoid having legal troubles down
the road.
Once the vehicle has been cleaned and repaired, you'll need to determine what it's worth. Your best bet is to obtain the Kelley Blue Book value. Your asking price will most likely fall between the trade-in and suggested retail value listed by Kelley. Also check your local newspaper's classifieds to determine local market pricing.
The next step is to advertise and take phone calls. Start by placing ads in the local newspaper's classifieds but remember to adverstise in more than one source. Make sure you calculate the costs of the ads. If the car doesn't sell right away, can you afford to run the ads for an extended period of time?
After the ads have been placed you should start receiving phone calls. Be prepared for the hassles involved with multiple buyers wanting to see the car at the same time and scheduling test drives. Determine how low of a price you will really accept.
The final step to selling your own vehicle comes once you have found a buyer and have the money in hand. This last step is to transfer the title and registration and cancel your insurance on the vehicle.
A Third Option: Donate Your
Car to Charity
A third option that many individuals never consider
is donating your car to charity. This is an excellent option if
you have a low-value, hard-to-sell vehicle. Donating your car
to charity also usually tax deductable.
