So, you’re buying a new car. Have you decided what to do with your old one? Trade it in, of course. It seems an easier option than selling it yourself, but, truth is, consumers tend to lose money on trade-ins — up to $1,000, according to Robby Stamps, author of No Risk Used Car Buying, an online book at www.good asnew.com.
Make sure you negotiate a price for your trade-in, before discussing any deals on the new vehicle. In the latest chapter of his e-book, Stamps outlines how to research the value of your car and market it for sale.
Experts say it could be less complicated and more profitable to sell the car yourself. According to Stamps, a private seller can expect to net closer to the retail value of the car based on several factors:
- The car looks good cosmetically.
- It has low mileage for its age.
- The car needs little repair.
- It had few owners or has never been hit or stolen.
- The car is in demand (such as the new Volkswagen Beetle).
- There are only three situations in which Stamps would advise trading in:
- When you can’t sell it from home. You may live in a gated community that doesn’t welcome a lot of traffic. Or, you’re not available on weekends, a popular time for prospective buyers.
- When the car would cost too much to repair. A car that’s worth $1,500, but needs $500 in repairs before it’s in sellable condition is not worth the expense. Expect to shave off more than double the cost of repair. In this case, expect to receive little at the dealership.
- When you have an unpopular or unfamiliar vehicle. Cars such as Fiats or Sterlings are not going to attract many customers.
Dealers do have the advantage of getting the most for a used car. “It’s their business,” says Stamps, “so they tend to have better negotiating skills. They are in a position to finance that vehicle, and they are also bound by law to sell a car that meets all safety regulations.” Here are some tips, however, to help a private seller close the best possible deal:
- Don’t out-price your vehicle. Kelley Blue Book retail prices are often highly inflated, even for dealers. Use a print buyer’s manual, or visit www.edmunds.com, to get wholesale and retail prices of your car.
- Compare prices of similar cars. Price yours slightly higher than what you are willing to take allowing for bargaining room. When listing your car in the classifieds, if a car similar to yours is listed for much less than its value, hold your advertising until that vehicle is gone.
- Prepare your vehicle to showcase. Clean the interior and exterior thoroughly. Remove tickers and junk from the trunk. Save receipts for any minor mechanical work (brake work, oil changes, etc.) to show that the car has been properly maintained.
- Be up front with buyers. Tell prospective buyers that there’s room for negotiation, but that you won’t go too far below the asking price. This will weed out those who intend to engage in a negotiating war.