Trading in your vehicle at the dealership will save you time
Selling it yourself will give you more money in your pocket
Nothing in life is certain except death, taxes, and the fact that your dealer won’t give you what your vehicle is actually worth. In my few years spent selling cars, I never had one client who was satisfied with the value of their trade-in.
Some decided to go along with it nonetheless, others decided to sell the car themselves and came back a few weeks or months later, and some were so upset the cancelled the whole deal.
Dealers expect you to be upset with the trade-in value of your vehicle. Some decide to live with it with the hopes that you will understand the process and why the value is lower, while others decide to artificially inflate the value of your trade. They will give you $2,000 more than every other dealership in the area, and you leave thinking you negotiated a great deal. Think again. That $2,000 was destined to you regardless, either as a hidden incentive the dealer has in its pocket, or the dealer boosted the price of the vehicle you are buying.
At the end of the day, the car’s only worth its market value minus the profit someone will make on it. Now, in some cases you can get a bit more from one dealer than another on your trade. They may have a client they know are interested, or your particular vehicle does very well on the pre-owned market for that particular dealer. You may get an extra $500, but that’s about it.
In my experience, how well the car is maintained and its overall quality is an important factor, but not as important as how clean it looks, mileage, and year. In other words, how well you maintained the vehicle over the years will play less of a factor then getting rid of that chip in the windshield.
So, to recap:
- Your car’s worth what its worth and you will get roughly the same amount from every dealership
- If you get significantly more for your trade at one dealership versus another, they are playing with the numbers
- How the car looks is more important than what’s going on under the hood
And now, the pros and cons of each option.
Pros and Cons of Selling Your Vehicle Yourself
- You will get more money for your vehicle
- Selling a vehicle can take a lot of time
- There are a lot of frauds happening with cars that are for sale. Potential buyers will contact you, take up your time, and seem interested. But, when it’s time to complete the deal they will tell you that they need you to ship the vehicle somewhere, they will tell you they will pay for it, but then send too much money and have you reimburse it. That’s one example.
- You have to meet a lot of people on a regular basis who want to drive your car. Not ideal when there’s a pandemic happening
- You can be liable for any problems with your car after the sale
Pros and Cons of Trading the Vehicle
- It’s faster and less complicated
- No risk of fraud
- No risk of being liable once the deal is completed
- Significant tax advantages in certain regions that narrow the gap between the market value and the value your dealership is giving you
- Despite the advantages, it will still cost you to trade in your vehicle as opposed to selling it yourself
Here’s What We Would Do
It’s a lot easier, faster and safer to trade your vehicle, but you will get more money if you sell it yourself. Here’s what we would do:
- Check if you can get a tax rebate by trading in the vehicle. This usually narrows the gap between the market and wholesale values, and makes selling it yourself almost unnecessary.
- See how much the dealer will give you and compare that with the market value.
- If you don’t like the dealer’s value, see if you can’t sell the vehicle yourself. In other words, give it a try for a week or so. Tell the dealer that you will take the new car, but you want two weeks to try and sell your vehicle yourself. Put a deposit on your next vehicle and put your vehicle up for sale. Dealers will usually be open to something like that.
- Share your vehicle on social media, tell friends about it, take out an ad in various online websites, and wait and see.
- If nothing is going on after two weeks, or you’re tired of fielding calls during dinner, getting stuck up for test drives after cleaning the car for an hour, refusing stupid offers that are for less than what the dealer gave you, and dodging buyers who need you to ship the car to Nigeria, then simply trade it in.