Buying a new car, whether it’s brand new or simply new to you, is always exciting. And if you have a car parked in the driveway, those old wheels can help you negotiate with a dealership via trade-in value. But should you sell it yourself, cut out the middleman, and put cash in your pocket?
Let’s take a look at what you need to know about dealer trade-ins and private sales.
Before You Trade or Sell
The first thing to do is figure out the car’s trade in value. Start by checking several automobile pricing guides, such as Kelly Blue Book. If you think your car might be worth a good trade, confirm the numbers with a local dealership.
In general, you’ll be able to get a better deal from a private sale than you will from a dealer trade-in. This is because a dealer has to re-sell your vehicle and make a profit, whereas you could simply pocket that additional profit in a private sale.
How a Trade In Car Deal Works
A trade-in at a car dealership is straightforward. When you finalize a trade, the transaction is usually completed the same day, and you can make a simple one-for-one swap—drive in with your old ride and out with your new. In addition, the dealership handles all the paperwork. Simply, a trade-in saves you the time and trouble of finding a buyer.
But there’s one trick to trade-ins that may make trading your car into the dealer a better deal than selling it. That’s because in many states, including Minnesota, you pay sales tax based on the difference between the new car price and your trade in car’s value.
As an example: if you were buying a new $25,000 vehicle with no trade-in, you would pay sales tax on $25,000. But if you had a trade-in worth $10,000, you would only pay sales tax on the difference between those two—$15,000. The sales tax you save could match or even eclipse the higher sales price in a private sale.
How to Sell a Car on Your Own
If you know that a private sale would work better for you, or if the sales tax break doesn’t matter because you’re not buying a car, start by listing the car online. This gives you a wide audience and an easy line of communication with potential buyers. Additionally, take care of detailing inside and out—a clean car and good pictures work wonders.
After you get your paperwork in order, it’s time to sift through offers. Some will be lowball offers; ignore them. Otherwise, Be available when someone wants to see the car. Always insist on a cash payment or a cashier’s check drawn on a local bank.
Why Maintenance Makes a Difference
As you work out how to sell a car on your own, schedule a maintenance checkup with your auto service center. Ask the shop to inspect the car and make any necessary repairs. Confirming and documenting the condition of these basics make it easier to get a good price for your old wheels.
- Brake system
- Electrical system
- Engine and transmission
- Oil, coolant and fluid levels
- Tires and suspension
The Care Your Car Needs
If you’re still not sure about a trade-in or a DIY sale, weigh your options. Bring the old ride by one of our Kennedy Transmission service centers. Let our automotive pros help you decide. We’ll give your old car the care it needs so that you can get the deal you deserve.