Like most do-it-yourself projects, selling your own vehicle to a private party can be cost-effective. In contrast, trading in your current vehicle at the dealership is certainly much easier.
Before buying your next vehicle, consider the pros and cons of what to do with your current vehicle and make an informed choice.
Trading -- Pros & Cons Trading your vehicle at the dealership may be quick and easy but it may not necessarily always be painless. The upside of trading is that the dealer does all the paperwork. After settling on an acceptable price, all you have to do is sign the vehicle over and be done with it. The price you pay for the convenience of being relieved of your vehicle will likely be less money for you than if you sold it yourself. Some people expect the dealer to give the full retail value of the vehicle and are often disappointed by the offers presented to them. Such people are being unrealistic. To avoid any surprises, be sure to get the Blue Book® Trade-in value of your vehicle before you go to the dealership.
This number -- based on the condition of your vehicle -- is a more accurate representation of what you may expect to be offered. Keep in mind that, if the dealer is going to re-sell the car then it must assume the responsibility for preparing it for that eventual resale. This process usually includes mechanical and smog inspections, repairs to make the car ready for sale and providing some sort of warranty on the vehicle for the new owner. The dealer might also sell the car to a wholesaler, or at an auction, where dealers buy and sell cars from and to each other in order to balance their used-vehicle inventories and make them most appropriate for their respective dealerships.
For example, if you trade-in an old, worn-out pickup truck to a high-end import luxury-car dealership, that dealership is not going to put that truck into its used-vehicle inventory. So that truck goes to the auction.
Trading can also help if you owe more on the loan than the car is worth. This is known as being "upside-down." The dealer can roll the remaining balance of your current vehicle's loan into the new loan, thus allowing you to trade in your vehicle without having to pay additional cash. While this is not advisable -- because it inflates the loan far beyond the new vehicle's actual value -- it is an option for a buyer who wants to get out of the current vehicle. And it will cost that buyer a lot of money.
Selling--Pros & Cons Selling your car on your own can get you more dollars, but requires patience and good judgment. First, you will need to determine a fair asking price. Blue Book® Private Party value will give you a price, based on the vehicle's condition, for you to calculate the value of your vehicle in a consumer-to-consumer transaction. Be aware, you may have to absorb the cost of making the car presentable and passing any required state inspections or emissions tests. And remember, first impressions are important, so always keep the car clean, presentable and ready to be shown while it's available for sale. You must also figure what your time is worth, because you will need to be available to answer questions and make appointments for people to see the vehicle and take it for test drives.
Another downside to selling your car yourself is that you may be contacted by some unsavory individuals, or people with whom you just don't feel comfortable. You need to have good instincts about people and have strong negotiation skills. If you do decide to sell your car yourself, be sure to put everything in writing and request payment in the form of a cashier's check. Personal checks can bounce and cash in large quantities is not wise to carry on your person.
Generally speaking, points which will enhance the notion of selling the car yourself include: Is it a vehicle that's normally in strong demand anyway? Is it unmodified, thus appealing to the greatest number of buyers who, generally, don't want someone else's modifications? Is it in really good condition? Is your pricing reasonable?
If you decide to sell your car yourself, there are several options available to advertise your vehicle to potential buyers.
Advertise online with for free on Craiglist.
Advertise online via a paid listing on eBay Motors.
Advertise in local newspapers or printed selling guides for a more local audience.
Place a Kelley Blue Book printed For Sale sign in the vehicle's window and park it in a highly visible area (see sample). Start by finding your vehicle's Private Party value, then click "Print For Sale Sign" when the final pricing report is displayed.
Points to Consider When Selling Your Car
Make your car presentable. At the very least, a good wash and wax of the exterior and complete vacuuming of the interior is in order. If you really want to impress potential buyers, take the car to a professional detailer and have the interior, exterior and engine thoroughly cleaned.
Sell your car AS IS: You are not a dealer and there is no warranty or return policy in effect.
Try to have all service records complete and neatly arranged for your prospective buyer. This will instill confidence that the car has been well maintained.
Be honest. Disclose any serious problems or repairs that might be needed to bring the vehicle to correct condition.
Don't be offended if someone wants to have the car checked out by a professional -- in fact, take the vehicle to a shop before you start price negotiations.
Set your asking price a few hundred dollars above what you really want. This allows some room to negotiate. And remember, just because you might think you "need" a certain amount of money from the sale is no reason at all to expect someone else to pay that amount. A car is worth only what someone will pay for it, on that day, at that time.