It’s a common question, and it’s one that we hear all the time. Should you trade in, or should you sell your old car to a private party?
The best choice for you depends on your priorities, your timeline, and whether or not you’re currently in the market for a new car.
We can guide you through the most important factors that you should take into consideration, but you’ll have to make the final decision on your own.
Let’s take a look at some of the pros and cons of selling your car to a private party versus trading it in at a dealership.
Want to Sell Your Old Car? Remember, Time is Money!
You have to invest a lot of time and effort in order to sell your car outright to a private party. First, you have to prep it for sale, take photos, create a classified ad, and post your ad at several different outlets.
When your car is listed, you’ll need to field inbound phone calls and emails, and schedule appointments with buyers who want to view and test drive the vehicle. When you find the right buyer, you’ll need to manage all of the paperwork and take care of the final payment - more on this below.
If you want to sell your old car to a private buyer, you need to make sure you have the time that’s required to do the job well.
The Sales Cycle for a Car Can Be Long
If you choose to sell your car on your own, keep in mind that it could take weeks - or even months - to make the sale. Instead of getting your money right away when you decide to part with the car, you’ll need to be patient.
Selling your car outright is typically the most lucrative way to dispose of an old car, but if you need your money right away, you’ll probably be better off with a different approach. In this case, selling your car wholesale to a dealer may be a better option.
Who Will Be Responsible for the Paperwork?
As the seller in a private party transaction, you’re responsible for providing the bill of sale, signing over the title of the car, cancelling your insurance policy on the car, and ensuring that you protect yourself from any legal liability.
If you sell your old car to someone and the buyer immediately gets into an accident, you could be on the hook if you don’t have a signed limitation of liability form.
It’s also possible that the buyer may want to return the car after the purchase. If they claim that you didn’t disclose problems with the vehicle before the sale, you could wind up in court. Most states consider private party vehicle sales to be ‘as is’ transactions, but some states require you to file paperwork specifically stating this.
Setting the Terms and Managing the Payment
Before you sell your old car to a private buyer, you should clearly communicate the payment terms. What payment methods will you accept, and how will the process work?
If you plan to hold the vehicle until the payment clears, you’ll want to set the buyer’s expectations accordingly. And if you’re only willing to accept certain methods of payment, you’ll want to make sure they know what to bring.
Accepting a personal check from a stranger is a risky proposition, and we recommend you stick to cashier’s checks and money orders instead.
Manage Your Meetings for Safety and Security
Meeting with strangers can be intimidating, and for good reason. But if you sell your old car to someone you met online, there’s going to be a point when you need to meet up in real life.
You should take precautions to manage any meetings carefully to protect yourself and maintain security throughout the process. Never invite a stranger to your home, and never agree to visit theirs.
Always meet in daylight in a populated and visible area. Bring someone with you if possible, and always tell someone you trust when, where, and who you’re meeting.
Never get in the car with a stranger. When the time comes for a test drive, you should have a suggested route prepared. You should obtain a copy of the potential buyer’s driver’s license, and you should let them know exactly how long they can keep the car before you’ll call the police to report the car stolen.
The Benefits of Trading In
If you’re in the market for a new vehicle, trading your old car in is probably a better option for you. While the price you get for your old car will be slightly lower than it would have been in a private sale, the benefits of trading in more than make up for that difference.
In most states, you get a tax break for trading in. Oftentimes, that tax break outweighs the difference in price between a trade-in and a private party sale.
Trading in also solves most of the problems we discussed above. While a private sale can take a long time and requires a lot of hands on management, a trade-in is instantaneous. The dealer manages the paperwork and payment, and the whole process takes place in a professional environment.
Final Thoughts - Selling Versus Trading In
If price is your top priority and you’re not concerned about time, then you might choose to sell your old car to a private party. Just be sure to do your homework and manage the process carefully.
If you’re in the market for a replacement vehicle, trading in is the way to go. You get a tax credit on the value of your old car, and the dealer is responsible for coordinating all of the paperwork and details.
Whichever route you choose, The Appraisal Lane can help make the experience as smooth as possible. You simply submit pictures and information about your car to our team of appraisers. We’ll give you a guaranteed offer in 30 minutes or less that can be redeemed for cash or trade-in value at a dealership near you.