Sell A Car Privately...
Or Forget The Hassles
and Trade A Car In?
Most people know that if you were to sell a car privately vs. trade in a car that you'll get more money selling your car yourself. But...
The question is, do you want to deal with the headaches of:
- Complete strangers coming to your home to see the vehicle.
- Getting phone calls at random times of the day or night.
- Haggling with buyers over price.
- Not knowing how long it will take to sell.
- Not knowing if it will sell at all.
- Having to make payments on both your new vehicle and the one you are trying to sell.
You will most certainly get more money if you sell a car privately, but I've found that most people, even knowing that, will still trade a car just to avoid the hassles involved with selling it themselves.
Sometimes there is an added benefit to trading a car. For instance, in some states like Arizona, and unlike California, you get a tax credit when you trade in a car.
In this case, if the dealer were to give you $12,000 for your trade in and your new cars sales price was $20,000 you would only pay taxes on the difference, which is $8,000.
Getting that tax break in this scenario, would mean a savings (assuming a 7.5% tax rate) of $900. In essence you actually received $12,900 for your trade in.
Knowing this, you would have to get over $12,900 in order for it to be worth the time and effort to sell a car privately.
On the other hand, if your state does not have a tax credit, then selling a car privately may be a more attractive option.
Wanna Go FSBO?
This is really a call you'd have to make on your own. A lot of this will really come down to what the dealer is willing to give you for your car as the trade in value.
If you do sell the car on your own, I'd suggest using the Retail Blue Book Value, or higher, as your starting point.
You may as well start high and work down in price if necessary. It's a lot easier to start high and come down, then it is to start low and try to work up.
Keep in mind that you may have to settle somewhere between the Private Party Blue Book Value and the Blue Book Trade In Value. Even if this is the case you'll probably still find yourself coming out ahead.
If you decide to sell a car privately, then be sure to read my How To Sell A Car guide...This 14 step guide will help you to maximize your profits.
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