Replacing your car also requires a decision on how to move on your current vehicle. Typically, you have two options both with their own set of pro’s and con’s; sell it privately yourself or trade it in at the dealership.
Trading in can be a great bargaining tool, however dealers are notorious for offering below-market rates. I experienced this firsthand when I upgraded my last car. It had all the options you can think of, very low kilometres, was always garaged and, of course, was meticulously looked after by my mechanic husband.
Before entering the dealership to negotiate on an upgrade I obtained a REVS valuation and researched how much the same car was selling for online. REVS placed my car at the top end of the price range, but the dealer didn’t see it that way. They valued it at the bottom end based on a more typical car of its age, with fewer features, more kilometres and poorer condition. I felt a little ripped-off.
Why does this happen? Because the dealer still needs to sell your old car and make a profit. The reality is most people won’t pay a premium for a well-looked-after car with all the extras. It’s just a nice bonus that may help you sell it easier and quicker than others on the market.
The alternative is selling privately. This is where you have the potential to get a few extra thousand dollars out of the sale. However, private sales tend to take longer and are often much less convenient.
So, which is right for you? Before selling your next car I recommend getting your head around the pros and cons of each option to understand the true value.
Trade-In Pros
- The process is quicker and fuss free.
- If you’re buying a new car with the same dealer, they may give you a better rate on the purchase price of your new car.
- The condition of your vehicle is less important as they have the resources to get it up to scratch. They will, of course, reduce the value for anything major, but they’re unlikely to care if the car is due for a service or has a few minor scratches.
- The reputable ones will provide a REVS check and vehicle inspection report with the sale.
Trade-In Cons
- Less money in your pocket (10% to 20% less).
- You will have to deal with car salesmen.
Private Sale Pros
- You will typically achieve a higher sales price (usually 10% to 20% higher).
Private Sale Cons
- The potential higher sales price will be offset against any repairs and maintenance required on the car.
- Depending on the condition of your car, you may not get the return on any additional money you invest in it.
- If you don’t do the work, you’re likely to find your car harder to sell and will have to lower your asking price.
- The time investment can be high, as you are responsible for preparing your car for sale, advertising and dealing with buyers.
- Your car could be on the market for some time.
- You could waste a lot of time dealing with time wasters, no shows and rude people.
- You will have to deal with people at your home or work.
- You will need to clean and prepare your car for every viewing. Depending on its condition, you may need to fully detail your car.
- You will need to publish your phone number.
- You’re likely to have to provide a roadworthy certificate and/or REVS check.
- Even though private sales typically put more money in your pocket, this is not a guarantee.
Private or Trade-In, Which is right for you?
Deciding on whether to sell privately or trade your vehicle in is ultimately a personal decision. Selling privately is undoubtedly more time consuming. There are more steps involved, more red tape and the potential of having a car sitting around for a lot longer than you would like. However, there’s also the potential for an extra 10% – 20% in your pocket. By contrast, selling to a dealer, especially if you’re trading in for another model, is much quicker and less stressful. If your car needs some work, then it’s typically easier to offload it to a dealer, and the cost of any work will reduce the potential return of selling privately.
The Carousel would like to thank Janelle Gonzalez from Blue Toro.
