The used car market is growing, expected to trend upwards on the way to 2030. Market growth means more competition, and more competition means better values for sellers. If you’re looking to sell your old car, now is the time.
However, a strong used car market also means strong dealer trade-in values. Dealers have to offer increased prices in order to compete with the used car market.
Selling Cars Privately
Many people opt to sell their vehicle on the private market. Selling cars privately takes more work, but generally has a higher payoff. Let’s take a look at the pros and cons of private sales.
Why you should sell your car on the open market.
Better Sale Prices
The open market generally yields higher sale prices than trade-ins. The reason being, you’re dealing with far more buyers. An increased number of buyers creates more demand for your car which in turn allows you to raise the price.
So long as you’re keeping your price around the Kelly Blue Book value, you’ll likely find someone interested in buying your car.
What’s more, the private market is hands down better for selling older, worn cars. There’s always someone who sees the utility in a “beater” and they’ll pay far more than a dealer ever would.
Why the open market isn’t your friend.
Private Sales Take Time
The longer your car sits on the market, the longer you’re waiting to buy your new car. Private sales take time to find the right seller. Though the market is open, sometimes no one comes around for weeks or months.
What’s more, you’ll probably deal with more than a few people who aren’t actually interested in buying your car. They’re what are called “low ballers” and are the bane of any private car sale.
Selling a car on the open market takes preparation. You have to ensure you fix the little things. Stuff like old windshield wipers, low oil, and worn brake pads can all knock more off the asking price than it would cost to just fix the issues.
It doesn’t hurt to follow something like this guide to see what buyers look for when they’re car shopping.
Trading in your car at the dealer is an excellent way to quickly upgrade to a new vehicle. However, like the private market dealer trade-ins have their pros and cons.
The benefits of used car trade-ins.
Sales Tax Breaks
Many people don’t realize, but used car trade-ins often come with serious tax benefits. In many states, you’re only required to pay sales tax on the difference between the trade in value and the price of your new car.
The tax benefit can seriously add up if you’re trading in a fairly new car that’s retained its value well.
Turn Over Your Loan
Trading in your current vehicle is perfect if you’re stuck in a loan but need to buy a new car. Maybe you’re expanding your family, or maybe you really need that truck. The fact is, you need out of your current car loan.
The dealer can help you refinance a loan that includes your current loan minus the trade in value of your car, plus the cost of your new vehicle. If the trade in value offsets the old loan you can sign an entirely new loan.
The drawbacks to used car trade-ins.
Used car dealers offer lower values than the open market. While they do have to compete with the open market, it isn’t directly. Plus, you’re “paying” for the convenience of driving to the dealer and leaving with cash in hand.
Car Maintenance Saves You Money
Whether you’re working on your old car or new car, car maintenance saves you money, especially when you’re selling cars privately. The more tune-ups, repairs, and maintenance you do at home, the more money you’ll save.
To help you along the way, we strive to be the internet’s best car repair information resource. If you need help with a repair just reach out and let us know. We would love to help.