Selling a Vehicle: Trade-In or Private Sale?

Selling a vehicle can be a really stressful time. There are a lot of things to consider. How much will you get out of it? What repairs could be done? What does the used car market look like? What kind of vehicle are you looking to purchase? Do you owe money on the vehicle?

Let me help you sort through these questions because at the end of the day, you will have two options with your vehicle. You can either sell it to another person as a private party transaction or you can trade it in to the dealership.

Let’s go.

(1) Trading a Vehicle into the Dealership

The first option that you have with your old vehicle is to trade it into the dealership that you are buying your next vehicle from.

Before I get into the pros and cons of this, there are a couple things to know about this first, though. 

You may not be able to trade your vehicle into the dealership. They may not want it, or they may not need it. If that is the case then you will be forced to either well the vehicle to another private party or take it to the junkyard.

The next thing is that your trade-in (or lack thereof) will likely make a difference on the price of the vehicle that you are purchasing. I will have an in depth article of the car buying process later, but just know that if you do not have a trade in or if your trade in is not very valuable, then you will likely not get a great price on the vehicle that you are wanting to buy.

With that being said, let’s get into the pros and cons of trading in your vehicle.

Pros of Having a Trade-in

1. The biggest pro of having a trade-in is that you don’t have to go through the hassle of detailing your vehicle, repairing it (to a certain extent), and listing it on Facebook Marketplace or another medium. You simply take it to the dealership and they look it over and then give you an offer. It’s really pretty simple.
2. The next biggest pro of trading in your vehicle is that you can potentially bring down the price of the vehicle that you are purchasing (thus bringing down your payment).This depends on a multitude of factors, but depending on the dealership and how many vehicles they have (or haven’t) sold, you can get a pretty good deal on the next vehicle that you are purchasing.

Cons of Having a Trade-in

1. The biggest con of having a trade-in is that you will likely not get as much money for your vehicle as opposed to a private sale. For example, if you have a vehicle that you want to upgrade from and it sells for about $10,000 in the private market and you go to a dealership to trade it in, you will probably get offered $5,000-6,000 for it. They would then sell that vehicle for about $10,000 and profit the difference. It’s not bad or evil at all. You’re just paying for the convenience of not hassling with selling the vehicle yourself.
2. The trade-in of your vehicle will have some sort of bearing on the price of the vehicle that you are going to purchase. In the vehicle purchasing negotiations with the dealership, they are likely to make you not focus on the amount that they are giving you for your trade in causing you to eventually pay too much for the vehicle that you are purchasing.

(2) Private Selling Your Vehicle

The second option that you have when selling your vehicle is to sell it to another person individually. 

If you do not owe money on the vehicle, then this is a piece of cake. Depending on your state, you will probably just have to sign a bill of sale and/or the back of the title or something like that. 

If you owe money on your vehicle that you are selling here is how the process works:

1. Agree on a price with the buyers.
2. Write and sign a receipt while taking payment for the vehicle.
3. Send in any remaining money owed on the vehicle to the lender. 
4. When they send you the title, give it/send it to the new owners.

This process will vary depending on your state. But this is generally the way to do it for most states. Just make sure to check with your specific state DMV before going through this process.

Pros of Private Selling

1. You will most likely get more money for your vehicle as opposed to trading it in to the dealership. The person that you are selling to  is likely not purchasing it to resell it like the dealership will do. So they should give you a higher amount.
2. It can make negotiations for your next vehicle simpler. They may not necessarily be better. But they will be simpler because you have one less thing to go back and forth about.

Cons of Private Selling

1. You have to deal with people. When selling something online you have to deal with scammers, low-ball offers, and sometimes downright rude people. That can suck.
2. You may have to pay a higher price for the next vehicle that you want to purchase from a dealership because you are not bringing them a trade-in. Not always. But sometimes. Just watch out for this.

Final Thoughts

Selling a vehicle can be a really painful task. I get it. 

I have sold vehicles to another private seller in the past. And I have also traded vehicles into dealerships.

The key is to know how much the vehicle is worth, what you are willing to accept for it, and how much headache you want to have while selling it or trading it in.

There are times where it is better to just trade the vehicle in and there are times that it is better to sell the vehicle privately. 

You just have to weigh out which option is best for you.

Here are all of the other vehicle related articles that I have written to help you out. 🙂

You can do this!

I am here for you!

Until next time!