Car review

WHAT TO KNOW ABOUT SELLING YOUR CAR TO A DEALER

WHAT TO KNOW ABOUT SELLING YOUR CAR TO A DEALER

When it comes time to get rid of your old car, some options are more likely than others to net you the best price. At the same time, convenience and speed of transaction might also be top priorities. If you’re hoping to sell a car, a dealer can be a great option, but it’s just one of several at your disposal. Selling to a dealer is also not without its challenges, so let’s dive in and take a look at what you need to know before selling your car to a dealership.

DEALERS ARE CONVENIENT

One of the biggest upsides to selling to a dealer is the convenience of the transaction. You don’t have to worry about carrying large amounts of cash around with you or about meeting in a sketchy location to complete the sale. The dealership is generally a trusted location and you can complete your transaction without fear of being physically harmed in the process. Dealers also have the ability to either resell a vehicle or pass it along to auction, so they are more likely to take obscure brands or vehicles with issues than an individual might be.

Selling to a dealership is also quicker than listing a car, either online or in a local newspaper. You won’t have to sit around waiting, fielding multiple phone calls or messages, only to find out that the buyer is just kicking the tires. Dealers either will or won’t buy your car, and they will typically let you know one way or the other on the spot.

SELL YOUR CAR YOURSELF TO MAKE THE MOST MONEY

Selling a car to a dealer is far more convenient than attempting to sell it on your own, but you're effectively paying for that convenience. Selling your car privately will generally net you more money than choosing to sell it to a dealership.

Dealers handle all the paperwork, and they manage the money, vehicle transport, and everything else after the fact. Dealers are in business to make money, so they aren’t inclined to provide those services for free, and since you’re selling a car instead of buying, the only way for them to extract money from the transaction is by paying you less for your used car. The car dealer takes on the hassle of car buying, and in return, you get a little less on your trade-in value.

• DETERMINE THE VEHICLE’S VALUE

When you research your car’s value online, you will likely be presented with three numbers. The first is a private party sales value, which is the amount you can reasonably expect when selling to an individual. The second is a trade-in value, which is what a car dealership will pay you when you go to purchase a new car and want to use the old one as a down payment. Finally, depending on the platform you use, you may also see what is known as an instant cash offer. This is an amount that a car buying service is willing to pay you on the spot for your car—generally without a test drive or inspection.

If you’re not in agreement with the appraisal you got, you can get a second opinion. This can be useful to improve your sale amount, but it can also help uncover issues in a vehicle’s condition that the first shop missed.

PRIVATE PARTY SALES

Private party sales are when you sell to an individual and handle the entire process yourself. This can be as involved as doing all the paperwork and managing the title transfer yourself, but the general rule is that selling a car is a pain. For this reason, private party sales are typically the most lucrative for the seller, as they are responsible for making sure everything is done correctly. On the flip side of that coin, selling to an individual usually involves haggling, so you should be prepared to name your price and stick to it.

TRADE-IN

If you want to sell your car to help pay for the purchase of a new vehicle, trading in can be your best bet. When you trade in a car, a dealership can apply the trade-in value to a new purchase. This can lower your out-of-pocket purchase expenses up front, and will ultimately lower your monthly payment. You may also get a better loan interest rate if you’re financing, since the down payment lowers the amount you’re borrowing. Trade-ins are generally not the most profitable for the seller, as dealerships aren’t known for paying the best prices for used vehicles.