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Is it Financially Better to Trade in or Sell Your Old Car?

You’re ready for a new car. You’ve searched high and low through all the car dealerships in the area. You’ve done your homework. You know exactly what you want. What you need to decide now is if you will be better off selling your old car on your own or bringing it in for a trade. You want to get more bang for your buck so that you can bring down your monthly car payment to an amount that is practical for you.

Selling Your Car Could Work for You or Against You

Ever since the pandemic hit, it has become more difficult to find cars on the dealership’s lot. There has especially been a shortage of new cars. As a result, more people have been turning to used cars. Sticker prices on the lots have been higher due to demand. In the end, this means you could probably get the full value of your car in a private sale. People are more likely to pay more if they go to a dealership for your used model. Once you have money in hand from your private sale, you may have some more bargaining power when you visit a Mitsubishi Dealership in Baton Rouge or your local area. Cash in hand also gives you the freedom to decide if you could use some of that money for other expenses as well. If you trade, you won’t be handed any money. The value of your old car will be applied to the new one.

You Need to be Prepared When it Comes to a Private Sale

If you choose to sell your car, make a to-do list. You can’t just sell it on a whim. Make sure you have your title. If you had a lien on your used vehicle, you’ll need to pay that off and provide the new owner with a lien release form. Find your owner’s manual and any maintenance records you have. Look up the value of your car. Kelly Blue Book and the National Automobile Dealer’s Association are good sources that can give you a ballpark figure. Take your car to the carwash. Consider having it detailed inside to make it look its best. If possible, take it off the road while you are trying to sell it so it will be visible. Get a sign to post your asking price and contact information. You’ll also want to advertise. You could use social media or the classifieds. Once you’ve done all the work of preparing your car, you’ll need to wait for someone to give you a nibble. If you’re lucky, you won’t wait too long to catch a buyer.

Trading in May Save You Money in the Long Run

You may have been very fortunate with selling your car on your own. You’ve got a good amount of money to put down on your new car of choice. However, this may work against you when it comes to how much you’ll have to pay in taxes on your new car. Thanks to the high demand for used cars, your dealership of choice may offer you more than you expected on your trade. That trade-in value will be applied to the price of your new car before your sales tax is assessed. On the flip side, when you use your cash from your private sale, the tax amount will be based on the full price of the car before deducting your cash. You may also be pleasantly surprised when your car dealer offers you more in trade than you would have received when you put a ‘for sale sign on your car on your lawn.

As you consider doing a private sale or trading in your car, consider talking to your car dealership first. Make sure you bring in your old car while it is looking its best. Discuss the car that you would like to buy. Your dealer will evaluate your car and provide you with a quote for your trade-in. You can also get the figures for what your final price and the monthly payment will be. Use the information from your dealership to determine what asking price you will need to make for your car on your own. Choose the most cost-effective option for you.