When buying a new (or new to you) car, you need to make a number of choices. One of the choices you need to make is what you are going to do with your current vehicle. You have two main options: trading and selling. Find out which of the two is the better way to get rid of your present ride by weighing both their pros and cons.
Trading Your Car
Trading in is considered the easiest and most convenient way to get rid of one’s current vehicle. You will not take care of anything; the responsibility of preparing the car and its paperwork for resale is assumed by the dealer. Trading in the car requires less time—the process is typically completed within a single day. There is less stress and hassle on your side too, as you need not bother with advertisements and test drives.
Another perk that comes with trading in is a sales tax cut. You can enjoy a tax advantage if you buy a car the same time you trade in your old one. Say for instance you get $7,000 for your current car and the purchase price of the car you will buy is $20,000. The sales tax you will pay for is only on the $13,000 difference. That makes for a substantial amount in savings.
Unfortunately, you get less money with a trade-in compared to a private sale. The dealer determines your current car’s trade-in value based on its age and overall condition, among others. The price the dealer gives you will be much less than what your former car’s suggested retail price will be, and for good reason. The dealer spent money to prepare the vehicle for resale—think refurbishment, cleaning and marketing. All those expenses, plus profit, will be taken into account when the dealer decides on the suggested retail value.
If you want to get a fair price for your trade-in and make sure you are not getting too little in exchange for it, consult the Kelley Blue Book to find out how much your car is currently worth.
Selling Your Car
Selling your car is made unideal by the amount of work it requires on your end. Before you can sell the car, you need to make sure it is ready for resale—and prep work requires spending. A private sale requires you to evaluate the car’s current condition and see if you need to do some repair work. If you do not fix the vehicle as necessary, you can encounter legal trouble after the sale. Thus, you need to invest some money in ensuring your old ride is in its best condition possible.
After you have done the repairs and pre-sale prep, you must do some research to find out what the car is worth. You should check Kelley Blue Book prices, both suggested retail values and trade-in values, to get a price range. It would also be a good idea to look at the used-car classifieds of different Indianapolis publications to understand local market pricing. It is only with research that you can come up with a decent asking price.
Then, there is the advertising. With the advertisements come calls from potential buyers. You need to take calls of interested buyers and take time to meet with them for test drives. After which is the hard part: negotiating for price and dealing with competing offers. If you finally find the person who offers the right price, you still need to handle the transfer of license and registration.