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Is It Better to Trade in or Sell Your Car?

July 15, 2021

If you are looking to purchase a new car and currently own one, you may be wondering about the best way to transition to your new vehicle. A question that often comes up is whether it’s better to trade in or sell your car.

As with most things, there are positives and negatives to both options. Many dealerships offer perks when you trade in a vehicle, but do the perks outweigh the benefit of the cash-in-hand you could get from selling your car?

We’ve described the pros and cons of both trading in and selling your car to help you determine what the best option is for you. Keep reading to find out more.

Pros and Cons of Selling Your Current Car

If you’re planning on selling your car privately before you purchase a new one, you may be aware that there are some serious benefits. However, certain hassles come along with those benefits.

Selling Pro: More Money in Hand

Oftentimes, the sale value of a car is higher than the trade-in value. This is usually because dealerships still need to make a profit once they’ve sold your trade-in vehicle.

Selling Pro: Sell on Your Own Terms

If you are selling your car on your own terms, you can negotiate with buyers for the price and find the deal that is right for you and your circumstances. Dealerships will often offer you one set price for a trade-in, and you have little bargaining power.

Selling Pro: Flexibility with Dealerships

Selling gives you flexibility, as you’re dealing with negotiating over cash rather than a car. Plus, not all dealerships will be interested in negotiating a trade-in and you may find your dealership options are limited.

Selling Con: Finding a Buyer

When you sell your car on your own, you’ll have to do all the footwork of advertising your car, finding a buyer, setting up an appointment for the buyer to view the car, and negotiating the deal. This can be a hassle, especially if you have a busy schedule.

Selling Con: Difficulties Aligning the Purchase Timeline

If you rely on your car every day and can’t go any period without it, it can be difficult to ensure the selling process aligns with the purchasing process without any gaps or overlap. This is especially true if you need the money from selling the car to make a down payment on a new one.

Pros and Cons of Trading in Your Current Car

On the other hand, there are some noteworthy benefits to opting for a trade-in. These often boil down to the convenience and ease of trading in your current vehicle.

Trade-in Pro: Ease and Convenience

One of the key perks that go along with trading in your vehicle is the ease that comes with it. When you trade in your vehicle, you won’t have to worry about advertising, finding a buyer, negotiating, or any of the other difficulties associated with selling your vehicle. Overall, trading in your vehicle saves you a headache.

Trade-in Pro: Avoid Loan Hassles

If you haven’t paid off your car loan, you probably do not have the title in hand. It can be a challenge to sell your vehicle without the title, as you’ll have to take the purchasing money, pay off the loan, and receive the title before you can transfer it to the purchaser.

While this can be a deterrent for buyers and can increase the hassle on your end, dealerships work through these situations all the time and have no issues helping you make the transition.

Trade-in Pro: No Buyer Risk

When you trade in your car rather than sell it, you don’t have to deal with risky buyer situations, difficult individuals, or people trying to rip you off. You’ll get a fair deal, as long as you work with a reputable dealership.

Trade-in Con: Lower Offers from Dealerships

As discussed previously, the major con of trading in your vehicle is that you will likely get less than you could if you would have sold it yourself.

Should You Trade In or Sell Your Car?

Overall, deciding whether to trade in your vehicle or sell it comes down to several personal factors. If you have the time and the patience to find a buyer for your vehicle, selling it can mean that you make more money and have more flexibility when purchasing a new vehicle.

On the other hand, if you value the ease and convenience of trading in your vehicle, this might outweigh the financial benefits reaped from putting in the effort yourself.

Red River Credit Union is here to help you decide whether you should trade in or sell your car. We are also on tap to guide you in purchasing a new car. To understand how trading in or selling your car may affect your financing options, consider how auto loans from credit unions work. Get started with RRCU today!

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