When they start shopping for a new vehicle, a lot of people have a hard time deciding if they should trade in their old car or try to sell it themselves privately. There are pros and cons to both approaches and only you can decide which one works best for you. Here are a few things to consider when you’re making the decision to trade in, or sell a vehicle yourself.
I could probably sell my car for more, but. . .
If you have a newer vehicle that’s in great shape and has low mileage, there’s no doubt that you will probably get more for it if you sell it privately. Newer vehicles with the latest features are usually snapped up pretty quickly for good prices.
If, on the other hand, you have an older, less desirable vehicle that has high mileage, you’re probably better off to take it to a dealership and trade it in. That’s one of the beauties of the trade in – dealerships will take just about any car including one that doesn’t even run if it will help to get the deal done.
If you still decide to forge ahead and sell you car on your own, here are some of the things that you’ll likely have to deal with:
- Buyers that never show up. Yup, get ready to waste a lot of time waiting around for people who never show up. Plus, they usually won’t bother to let you know that they’re not coming to look at your car after all.
- People you don’t know will be coming to your house. If you aren’t a people person, you probably won’t like this.
- You have to be available to go on test drives, or be trusting enough to let people test drive your vehicle on their own.
- People will haggle over every little scratch, dent, or chip, even though the vehicle is 20 years old and has 200,000 km on it.
- You may have to allow a prospective buyer to take the vehicle away for a mechanical inspection. Or, you may have to take the time to meet a buyer at a garage of their choice to have your vehicle inspected.
- If someone only wants to pay you by cheque, are you going to be worried that it will bounce and you’ll end up with no car and no money?
- The car breaks down after you’ve sold it, and the buyer comes back and demands that you give them their money back.
Back to the Trade In
So, let’s get back to the trade in. The dealer takes the car on trade, even if you have to push it onto their lot. If it’s worth repairing, they’ll fix the major problems. If it’s a newer vehicle in decent shape, they might keep it to sell it on their lot. If it’s an older vehicle, they might sell it to a wholesaler who will sell it on their lot. If even the wholesalers don’t want the car, it will either be sent to an auction, or to an auto recycler. Either way, the dealer has to deal with a lot of paperwork and the time and effort involved in making the vehicle sellable or disposing of it. So, even though the dealership gives you less than you might be able to sell the vehicle for yourself, they take care of the headaches so you don’t have to.
Trade your Car and Reduce Taxes
There are tax advantages when you trade in a car. You probably only have to pay taxes on the difference between the purchase price and the value of your trade. On an expensive vehicle, that could be thousands of dollars. For example, if you buy a $20,000 vehicle in Canada, the taxes are 13% or $2600. However, if you get $10,000 for your trade, you only pay 13% on $10,000, or $1300 in taxes. The more valuable your trade, the more money you save on taxes. If you sell your vehicle yourself and use the money to make a down payment, you lose that tax advantage.
The Bottom Line
If you have a newer vehicle in good condition and low mileage, you have lots of free time, and you don’t mind having strangers coming to your house and trying to beat you down on the price, by all means try to sell your vehicle privately. You may very well get more money for it, but it will require more time, effort, risk, and stress on your part. If you have an older vehicle that’s not mechanically or cosmetically perfect, you’re probably better off trading it in for whatever you can get for it.
Kelowna Infiniti Nissan is home to one of the largest used vehicle inventories in the Okanagan Valley. We want your trade so if you’re considering a vehicle purchase, bring your trade by and find out how much it’s worth, or use our online trade appraisal form to get a no obligation evaluation.