e Auto Advantage: 2.2.2: Selling Your Trade-In

Comment: Several options should be considered when it comes time to selling or disposing of your current vehicle. Each option has its own set of advantages and disadvantages. The most common options include 1) Trading to a dealership for a new vehicle, 2) Selling to a third party via flyers or newspaper ad, 3) Selling to a third party via the Internet, 4) Selling to a family member, and 5) Donating to a favorite charity.

The value received for the trade-in will depend on several factors. They include 1) How vehicle sold, 2) Vehicle’s mechanical and cosmetic condition, 3) Mileage, 4) Options, 5) Area of the country where it is located, and 6) Seller’s skill as a negotiator. See Valuing Your Trade-In.

Description: Buyers of a new vehicle trade in their current vehicle to the dealership when they purchase their new vehicle.

Advantages: Easy and convenient. You dispose of your current vehicle when you purchase your next vehicle. The dealership takes care of all the paperwork regarding the sale and transfer.

Disadvantages: Dealerships will usually offer the least amount of all the options listed. The dealership will try and combine the trade-in transaction with the purchase and financing of the new vehicle. This option will try one’s skill as a negotiator. See Negotiating the Purchase - The Trade-in.

Description: Take your vehicle to a permanent consignment lot where other vehicles are sold.

Advantages: These lots will do all the selling for you and will even work to obtain the price you want.

Disadvantages: These lots, of course, get a prearranged portion of the sales price.

Description: Distribute flyers or place ads in newspapers and other print media where vehicles are sold.

Advantages: Usually receive the most for the vehicle using this option. The amount received is, of course, dependent on one’s negotiating skills.

Disadvantages: Unfortunately, personal safety has now become an issue when selling a used vehicle. If you take this option you should consider the following: 1) Meet in a public place verse at your home, 2) Meet during the day verse at night, 3) Have a friend with you … bigger verse smaller, 4) Limit the number of people in the vehicle during the test drive, 5) Limit the length of test drive.

Advantages: Receive much wider distribution of your ad than with a newspaper or other print media. Usually receive the most for the vehicle using this option. The amount received is, of course, dependent on one’s negotiating skills.

Disadvantages: Unfortunately, personal safety has now become an issue when selling a used vehicle. If you take this option you should consider the following: 1) Meet in a public place verse at your home, 2) Meet during the day verse at night, 3) Have a friend with you … bigger verse smaller, 4) Limit the number of people in the vehicle during the test drive, 5) Limit the length of test drive.

Description: Sell your current vehicle to a family member in need of transportation

Advantages: Help a family member. Depending on the situation one could receive payment equal to or better than from a dealership.

Disadvantages: If the vehicle develops “problems” after the sale family relationships may become tainted for some period of time.

Description: The donor chooses a worthy charity to donor their current vehicle. The charity will normally arrange the towing and handle all the paperwork regarding the donation at no expense to the donor.

Advantages: Personal satisfaction from helping a worthy cause. The donor may also be able to claim a donation deduction on their tax return. The donor should review the charity’s website and the IRS website for specific information regarding vehicle donations.

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