Should I sell my car myself or trade it in?

To sell your car or trade it in that is the question. When deciding what you want to do with your used vehicle you have to balance profit with convenience. If convenience is most important, you may want to sell your car to an auto dealership or to a used car dealer. If saving money is your top priority then you should sell your used car yourself.

On this page you we will learn how to>>>

• Save big money by selling your car yourself.
  
  
• Increase the value of your used car.
  
  
• Find the best places to sell your used car, including a review of Auto Web.
  
  
• Determine the price at which you will be able to sell your vehicle.
  
  
• Shop your used vehicle around to ensure that you get the best price and avoid dealer tricks.
  
  
• Donate your used car, which might in the end be your best option.

Two important terms>>>

• Retail value. This is the amount your vehicle is worth if you sell it yourself to a private party. You get the maximum amount of money for your vehicle by selling at it retail value.
  
  
• Wholesale value. This is the amount your vehicle is worth to someone who intends to resell it. If you sell your car to a used car lot or trade it in at a dealership, wholesale value is the most you can expect to get for it.

How do I sell my car myself?

The first thing you need to do is get a general idea of the retail value. The best way to find the true retail value is to look in your local paper or at online auto ads and see what other sellers are asking for vehicles that are similar to yours. Once you have decided on your asking price, the next thing you will need to do is place an ad.

Advertising your car.

In the past, the best place to advertise a used vehicle was in the local paper. But times have changed. Millions of people are turning away from the local paper and to their computers as their primary resource for buying a used car. Placing an ad with an online service such as Auto Web (see review below) costs less money for a longer run time and will probably get you a much greater response. Additionally, with online services, you can write a much longer description of your vehicle and submit a color photo. Some services allow multiple photos at no extra cost. You may still want to consider placing a newspaper ad, but first you should consider placing an ad with an online service.

Writing your ad.

Make your ad intriguing and honest. Highlight the good points of your car. (Read other ads to get an idea of what to say.) Make sure you include the words "no dealers" in your ad - this should keep auto dealers from calling you. Tell people how you want them to contact you? Telephone? Email? What is going to work best for you?

Auto Web. For $29.95 you can advertise your vehicle until it sells (unlimited extensions). When you place an ad with Auto Web your ad also runs on Autobytel.com and Car Smart. Full page ad with photo is included in the basic price.

Hot Tip - Free advertising!

Consider posting your used vehicle on a local community bulletin board. Find a local newspaper that offers free advertising for used cars. Make a "For Sale" sign and hang it in the window of your car.

What legal issues will I have to deal with when I sell my vehcile?

Make sure you know the proper procedures for selling a vehicle in your state. In most states, the buyer will have to pay sales tax. You'll have to execute a transfer of title once the vehicle is sold. This is a lot easier than it sounds. You should be able to get all the information you need from your department of motor vehicles. Also, a very helpful resource is Consumer Guide's (consumerguide.com) auto seller's kit. For $15.95 you get unlimited access to their seller's kit which is an interactive online auto sellers resource.

Does it make sense for me to donate my car instead of selling my car?

Donating a used car to a charity is a great opportunity to give to a good cause and may also provide you with a nice tax deduction. If your car is fully paid for and is worth less than $6000 dollars, donating it may be your best bet. Go to a few search engines and search for "car donation" to find a charity that fits your tastes. Or call up your favorite local or national charity and ask them if they have a vehicle donation program. Most charities will be happy to come to your house to pick up the car. Any charity to which you donate your car should provide you with the proper IRS forms and a tax I.D. number.

What can I do before I sell to get better price?

A little upfront effort can save a lot of money. Here are some tips>>>

• Clean thoroughly. Do it yourself or pay someone to do it. People generally assume if a car is kept clean that it has also been maintained well mechanically.
  
  
• Wax and fix paint nicks. It takes at least two to three hours to give a car a really good wax job but if this returns it to it's original shine it will be well worth it. If you have small nicks in the body paint use touch up paint to cover them over. Make sure you use the exact color of your original body paint - you can get this from your auto dealership.
  
  
• Minor repairs. Take care of any minor repairs your vehicle needs. If there are fuses that need replacing do it. If something is not working on your vehicle an appraiser or buyer may not have any way to know if there is a major problem or minor one so spend a few bucks to fix the minor ones. A 50 cent fuse could save you $500 with the appraiser or win you the sale with a potential buyer.
  
  
• Extended service agreements. If you are going to retail your vehicle and it carries an extended service agreement, find out if this is transferable. If it is and you are planning to sell your vehile to an individual, this will add value to the price. If you do not have an extended service agreement, you may be able to add one for not a lot of money.

Once you have your car looking and sounding its best you are ready to sell it!

How do I sell my car to a dealer or used car lot?

If you decide to sell your car to a used car lot or auto dealership you are going to get less for it than if you were to sell it to an individual but you don't have to get ripped off. The easiest way to sell your used car is to trade it in at the auto dealership where you are buying your new car. Your auto trade-in is the true battle ground for profit at any dealership. If you don't negotiate with them, they will give you much less for it than it is truly worth. The key to getting a fair wholesale price is to shop your car around. If your auto dealership knows you have gotten price quotes on your trade in from their competitors they are more likely to give you a competitive price. If your auto dealership does not give you a competitive price, you can sell your used car to one of the places you got bids from. Either way you win.

Hot Tip - Tax Savings!

If you sell your used car to the dealership where you are buying your new car you will only pay sales tax on the difference between the two cars. Depending on the sales tax rate in your state this could be over a thousand dollars in savings. Make sure you consider sales tax in your final decision.

Shopping your used car around.

The easiest way is to look in the yellow pages for used cars dealers that say they buy cars. Call ahead and let them know what you are selling and see if they are interested in buying the car. Only go to places where you get a good feeling over the phone. Ideally, you should get quotes from two or three of these places. Tell them that you are totally serious about selling your car if they can give you a good price for it. Generally, when you go to these used car places they will want to take your car for a test drive (they need to do this to appraise the car). The whole appraisal process usually does not take more than 15 or 20 minutes. If they like the car, they will make you an offer. This offer could be the starting point for negotiations if you decide to sell your car to them. Let them know that you are considering other offers and ask them if this is the absolute best offer they can make on the car. Ask them to put the offer in writing and let them know that yyou are interested, but still want to shop your car around. Thank them for their time.

After getting one quote, you have a good basis to get an even more competitive quote from the next used car dealer. If the next used car dealer does not beat the offers you have already received, let them know it without telling them the actual offer, and see if they can come up any. If they do not raise their offer, then, let them know what your best offer is and who gave it to you. Ask them if they can beat the offer. If they do beat the offer have them put their offer in writing. Thank them for their time and leave.

You now know how much your car is worth "on the street". When you go to buy your new car and sell your old car you will be in a position of strength when negotiating with the dealership. If the dealership is trying to offer you too little for your trade-in, you can let them know you have other offers on the car. Tell them you will sell your car one of the other if they can't make a competitive offer. This can save you hundreds and possibly thousands of dollars and it only takes a few hours out of your day. How much is your time worth?

How will my auto dealership evaluate my trade-in?

The value of your trade-in is determined by: condition of your car, popularity of the model, skill of the appraiser, needs of dealership (supply and demand), and individual curb appeal of the car.

Hot tip!

Combine your used car shopping trip with your first new car pricing trip (see our Auto Pricing page.) In most towns you can find new car dealerships and used car lots clustered into several small areas. Plan your day so that you can go to the new car dealerships and shop your used car around at the same time.

I've been low-balled!

This means the dealer offers you less on the trade-in then what they have placed as the true wholesale value. This is a common practice and is where the most profit is made for the dealership.

I've been high-balled!

A dealer or website gives you an inflated figure for your trade-in to get you to come into the dealership or put a deposit down. Once you are at the dealership or have put down money, they find another way to make money on you or they don't come through on the offer.

Equity in vehicle.

This is the true wholesale value minus any money you owe on the car.

Upside down.

You have negative equity in your vehicle. You will have to pay someone to take this car off your hands.

Positive equity.

You can expect to receive money when it is time to trade in.

Oh no, I'm upside down!

If you owe more money on your car than someone will pay for it you are "upside down" on your car loan. My best advice to you would be to wait to buy a new car until you can get right side up. If you trade-in when you are upside down, instead of receiving money for your trade-in, you will owe additional money. If you don't have any other resources you will have to add that amount to your new car loan, which puts you further upside down and perpetuates the problem. If you are upside down on a car loan you are in a precarious position. If something were to happen to you, you were no longer able to make your car payment and had to sell your car you would actually have to pay someone to take the car off your hands. Where would you get this money? Also, the more debt you carry on your car loan the more interest you are going to pay. A safe guideline is if you can't afford to put at least 20% down on your new car then you need to buy a less expensive car. You may be able to make up the gap and get right side up if you sell your car privately to an individual.

Watch Out!

Trading in a car you owe money on. It's fine to trade in a car on which you owe money as long as your are not "upside down". It is the dealership responsibility to pay off the loan on your old car, and this should be done immediately. However, some dealerships have been known to take several months to pay off an old car loan. If the dealership is irresponsible about paying off your loan quickly, you could get late fees or your credit could be negatively affected. Have the dealership make a notation on your paperwork stating the date by which they will pay off the old car loan. Check with your loan company later to make sure the dealership paid off the loan in a timely manner.

How does it work when I sell my car to the dealership?

The dealership places a value on your trade-in. If you agree to this value, the dealer takes possession of your car and then applies the agreed value to your loan on the car. Once the loan is paid off any extra money can be applied to the purchase your new car. If you are upside down, then you will have to put money down out of pocket when you buy the next car.

Mileage statement. When you sell your car you will have to sign a mileage statement to certify the mileage when you release it to the dealership. Make sure you mileage statement is completely filled out when you sign it. If the dealership does not fill out the numbers and you sign off on it, you are opening yourself up to trouble. Later someone could roll back your odometer and then fill in the false numbers on your mileage statement. You could be found liable because you signed off on the mileage statement.

Power of attorney. You will have to sign one of these when it is time to transfer title at the dealership. If you are doing a trade-in you will have to sign two powers of attorney: one for your trade in and one for your new car title transfers. This gives the dealer legal power to execute the transfer of the titles.

When is the best time to sell my car?

If you trade a car in and it is twelve months old it is considered a one year old car. If you sell your car when it is thirteen months old it is considered two years old. Do you understand? One month can cost you a lot of money. This is a bigger deal if you're are selling your car to a dealership or used car lot than if your selling your car to an individual.

How do I sell my car to the dealership when I am ordering a car?

This can be tricky because dealers will often want your trade-in to be reappraised once your new car arrives, and this can leave you open to being low-balled by on your trade-in. A way around this is to have the dealership manager agree in writing that when your new car arrives you have the right to have your used car appraised by and sold to another source if that source can beat the dealership's offer.

Wow, that was not all that bad!

Now you are prepared to get a great price for your used car. If you have already read our Auto Loans page and our Auto Pricing page then you are ready to go in for the kill. On to...

Step 4 - Auto Purchase!

If you have not read our Auto Loan or Auto Pricing pages make sure you do before moving forward with the purchase your new car. The information on those pages could save you thousands of dollars. Click here to return to the top of the Sell my Car page.