Private Sale May be Better for Your Pocketbook, But is Trading in a Used Car
Better for Your Peace of Mind?
You've researched, you've fantasized, you've even test-driven your soon-to-be beauty of a new car.
However,
there's still one minor thing standing between you and your new vehicle: You haven't yet sold your
old one.
But here is the big question: Should you take what the dealer is offering you on your used car
trade in
or should you put in the effort and try to sell it yourself? In order to optimally answer this
question, we first need to switch gears and back up. Since most of us get overly-excited about
the prospect of a new car, we often go racing into the dealership screaming, "I have a trade in!"
in an effort to score a good price on our new vehicle. However, the key to the real deal is to
not mention that you have a trade in until you have secured a price on the new car. The reason
for this is that, in an effort to look like they are giving you a great price on your trade in,
the dealer will often work the numbers so that the money is actually being put back on to the
price of the new car. Unfortunately for you, you are not privy to all of this "number working"
and it can get very confusing; this is deliberate so that the consumer doesn't really know what
he's getting.
In light of this, oddly enough, the first step in deciding between private sale and trading
in your used car
is often to secure a price on the new car without any mention of a trade in. This is most
beneficially done by negotiating with two or three dealers until you have them at the same price
on the new car. At this point, you are ready to mention your trade in and with this you must
not forget to ask the dealer for the trade appraisal slip and ask them to point out the
ACV (actual cash value), as again, you want to see what you are getting in real dollars and cents
without any of that number working. Now, whichever one is offering the best price on your old car,
that's who you'll buy from, assuming, and here's where it gets fun, you don't sell it yourself.
At this point, you are ready to revisit the original question of whether you should sell your used
car privately or just take the money on the trade in. According to Wally Schwartz, owner of
Superior Pontiac, Buick, GMC, and Nissan in Dearborn, Michigan, it depends on the individual.
Schwartz, a thirty-five-year veteran of the car business, also advises that you start by getting
an estimate of what you could expect to get on a used car trade in. He, however, recommends that you
first visit a couple different dealerships to simply get a price on a trade in,
leaving out the
mention of buying a new car. In fact, he says to tell them that you already have a new
vehicle and are simply looking to sell your old one. According to Schwartz, their offers should
be within the same ballpark and this will serve as an estimate of what you stand to make on a
trade in. Since we already know that the private sale value will be more than the trade in value
(after all, the dealership needs to make a profit), Schwartz says, it is here that "You have to
decide how much above that price do I need to make the aggravation (of private sale) worth it."
However, it may be simpler, though possibly not as accurate, to visit any of a number of online car
sites including
Autobytel.com,
Autoweb.com,
CarSmart.com,
Autos.yahoo.com, or
NADAGuides.com, which will give
you both an average trade in and an average retail value. One thing to make certain of,
however, is that
when asked to rate the condition of your car, you mark "good" rather than "excellent" condition,
for a dealership will only be giving you the middle number between fair and good, and you want
the site's estimate to be a point of comparison.
For example, according to the
NADAGuides.com car prices, a 1999 Toyota 4-Runner with
70,000 miles has an estimated trade in value of $11,095 and private party value of $13,245,
a difference of $2,150. However, before you go thinking that for a two-thousand-dollar savings,
you'd be crazy not to sell it yourself, let's look a little closer at what all this supposed
"aggravation" actually entails.
According to Schwartz, if you decide to sell your used car privately, make sure not to overlook the
following:
- Clean up your car: You will want to make sure it's looking its best in order to
get maximum dollar. This can mean professional detailing or a Saturday spent in your garage.
- Write a good ad: This is the first thing people see. If it's not enticing, they won't
be enticed.
- Listen for the telephone: This seems fairly obvious, but that means no screening and
you're probably going to have to pick up during dinner.
- Play with people: While this may sound fun, what it really means is be prepared to
haggle.
- Accompany your buyer to the DMV: No, he is not kidding; you want to make absolutely
certain that the title is transferred from your name.
- Think about safety: Aside from the time and energy, Schwartz says people often overlook
the fact that strangers will be coming to your home and you will likely be driving around with
them.
There are those, like Danny Gil of Los Angeles, who are perfectly suited to realizing
the extra cash that often comes with selling a used car privately.
Gil says he was prepared to place an ad if
necessary, but he began by simply mounting a "for sale" sign in the window of his 1992 Honda Civic.
He spent a couple hours detailing his car, consulted the
Auto Classifieds
to check comparable
used car prices and determined an asking price of $3,500.
He began receiving calls immediately. According to Gil, "I saw about ten people and about ten more
called." He sold his car within the week for $3,200, certainly more than he would have received
as a trade in. While Gil's situation may not be typical, as he admits, "Everybody likes Hondas."
Nevertheless, he did not flinch at a little extra effort and for that, he reaped the reward.
So, what exactly does this mean for you in terms of private sale versus trading in your used car?
Since it seems you are going to get more through private sale, why not give it a shot? However,
if you don't get that off-the-bat dream buyer, then it seems the key may be as simple as
knowing yourself and being able to put a price tag on your time and energy.
