If you’ve decided it’s time to get a new vehicle, you’re in good company. After all, Americans bought a whopping 5.3 million cars in 2018.
Now that you plan to get a new car, you may wonder, “Should I trade in my car or sell it?” The answer comes down to what you prefer and how important getting the best car trade-in value is for you.
Trading in your car is definitely more convenient than selling it on your own. But you should also be aware of the drawbacks.
Read on to explore the pros and cons of choosing to trade in vs sell your car.
Trading Your Car in Is More Convenient
When you trade in your car, you don’t have to worry about finding a seller, meeting up with them, and negotiating a price. Instead, you can go to your local dealership, ask about the trade in value of your car, and then apply that amount toward your new vehicle.
Since you’re only communicating with the dealer, you save time and can get your new vehicle rather quickly. There’s no waiting a few weeks to find someone locally to buy your old car and hand you the cash.
You’ll Pay Fewer Sales Tax If You Trade In
Whether you sell or trade in your car, you’ll still likely have to pay sales tax when you buy your new vehicle. The exception is if you’re lucky to live in one of the few states without a vehicle sales tax.
However, the dealer usually deducts your car trade-in value from the new vehicle price. This means you will pay fewer sales tax than if you sold your old car privately and bought the new vehicle for the full price.
That’s a pretty good deal, isn’t it?
You’ll Get More Money From Selling
When deciding to trade in vs sell your vehicle, do know that you can expect to get less money when you trade in.
Not only do dealers have overhead costs that affect how you’re offered, but you have less room for negotiation on the sale price. In the end, you might get 15 to 25 percent less when trading in.
If you want to get the most money, selling a car yourself may be the way to go.
Selling Gives You Flexibility
You still have control over which new vehicle you buy whether you sell or trade in your car. However, you do have less flexibility when you do a trade in.
Since the dealer puts your old car’s value toward your new car, you’re stuck with choosing a car from that dealership. When you sell, you can buy a car anywhere you want, even online or through an auction.
Luckily, the dealership can often order your desired vehicle for you, but you’ll have to wait until it arrives. This might be inconvenient for you if you need a new car quickly.
Choosing to Trade in vs Sell
Now you’ve got the facts to decide whether it’s better for you personally to trade in vs sell your car.
If you’re willing to get less cash if it means you save yourself the hassle of selling your car, then trading in could be right for you. If you want the freedom of choosing a car from anywhere you want and also would like the best car trade-in value, then selling might be worth the hassle for you.
While you’re shopping for a new car, be sure to check out our car shopping blog.