Understanding your options is the first step to figuring out whether you should sell your car, trade it in, engage a car broker, donate it, or scrap it. Whether your priority is time, money, or convenience, there’s a selling method for you.
Sell a Car Privately
Why should you sell privately? Selling a car yourself will get you the most money since there’s no intermediary to take a piece of the sale. What’s the downside? It takes time to list a car for sale, screen calls, texts, and emails, arrange test drives, and manage the financial transaction details. The selling process can be intimidating.
If you’re interested in selling privately and want more information, AutoTrader.com Adviser: How to Sell a Car offers step-by-step expert advice on the entire selling process, including preparing to sell, placing an ad, finding a buyer, and closing the deal. Kelley Blue Book’s pricing tool can also help you find your vehicle’s average local asking price.
Another option for a private sale is selling to someone you know, like a family member, friend, work colleague, or acquaintance. This type of sale often eases some of the intimidation, but it has the potential to make the negotiation process harder. When you know the buyer, you may be less willing to drive a hard bargain.
The bottom line: If getting the most money is your priority and you feel comfortable selling or are willing to learn, selling your car yourself may be your best option. See AutoTrader.com private seller ad options in your area to start selling now.
Trade-In a Car
Although you may make less money for your car when you trade it in, the convenience gained is well worth the cost for many people. If you know you want to buy a car from a dealer, all you have to do is drive the old car in and drive your new car out. The dealer will evaluate your vehicle, take care of the paperwork, and hand over your new keys, usually on the same day. Of course, before you go to a dealer, it never hurts to know the average trade-in value for your car, which you can find on Kelley Blue Book.
One financial incentive of trading in is that you may get a tax break on your new car’s sales tax. In many states, you only need to pay sales tax on the difference between the trade-in value and the price of your new vehicle. So if you get $5000 for your trade-in and your new car costs $15,000, you only need to pay the sales tax on $10,000. Check the tax laws in your state to see if you’re entitled to this benefit.
If you owe more money on your car than it’s worth, trading in may be a good route. If you owe more than $3000 of what your car is worth and you’re looking to get a new vehicle, then trading in may be your best option. If you sell privately, having to overprice your car may considerably delay selling your vehicle.
The bottom line: Trading in is an excellent option for people who want an immediate sale or don’t want to hassle with the details.
Car Brokers
A good broker is typically an experienced car buyer and seller who understands how dealers work, knows how to negotiate, and has your best interests in mind. Unfortunately, some who pose as brokers don’t have substantial experience or are actually on a dealer’s payroll – the broker sells your car to a dealer for a reduced price, and the dealer pays the broker an additional fee. A good broker can reduce stress, but you must do your homework. If you use a broker, ensure he has a valid license to sell cars in your state and verify the business with the Better Business Bureau. Ask for testimonials from previous customers who have successfully used the broker’s services. Clarify how much the broker charges, and get an agreement in writing.
AutoTrader.com will never sell your personal information, including your phone number, to brokers or anyone else. If you receive unsolicited calls, make sure you’re registered on the National Do Not Call Registry and let the callers know they’re in violation of federal law.
The bottom line: If you don’t want to hassle with the details, a broker may be worth considering if you do your homework. You may also want to consider trading in.
Donate a Car
There are three great reasons to donate your car: Your generosity may benefit a worthy cause; you can get a tax write-off (check with your accountant to be sure); and donating a vehicle in poor or non-working condition can be easier than selling it or junking it yourself.
Before you donate, research your charity thoroughly. Check out organizations that rate charities, like Give.org, Charity Navigator, and the American Institute of Philanthropy. The IRS Vehicle Donations Guide provides excellent information about the tax benefits and limitations of donating your car.
The bottom line: Donating is a good option for philanthropists or people who don’t think their car is worth selling but still want to put it to good use.
Salvage & Auto Recycling
Salvage and auto part recycling companies are usually best suited for owners with inoperable cars. The company usually tows away your car for free and may even pay you a minimal amount. If your vehicle is in running condition, you’ll probably get more money by selling it. Consider donating a car to charity over recycling since some charities accept cars in non-working condition.
The bottom line: If your car’s an inoperable clunker, a salvage company or charity may be your only options besides parking it on blocks and using it as a planter in your front yard.