There are a lot of benefits to trading in your car instead of trying to sell it privately. You can lower the amount you have to finance without the hassle, and walk away with the keys to your new car in hand.
1. Simpler Process
When you take on a private sale, you are responsible for every step of the process. You have to create an ad, take photos, list it for sale, communicate with potential buyers, and arrange for test drives. Once you have a committed buyer, you often have to negotiate pricing, work out details, and handle paperwork. This can take hours or even weeks to complete, which prolongs the time that you can purchase your new car. Some states have legal requirements for private car sellers and can hold you liable for problems that happen after the sale takes place.
On the other hand, if you elect for a trade-in, you can get the value of your car immediately applied to the purchase price. If you have cash to pay for the car in full, you can deduct the amount, and if not, you’ll have a lower monthly payment.
2. Tax Benefits
Tax laws vary between states, but most car buyers can take advantage of tax benefits. When you purchase a new vehicle, you may be able to only pay the sales tax on the price difference between your trade in value and the cost of the new vehicle. If you are buying a new car or higher-end used vehicle with a higher price tag, this could amount to a significant cost savings.
3. Avoid the Risk
Selling a car to a private buyer can also pose some risk. Online scammers are at an all-time high, looking for sellers who will fall for their scams. Even if you do encounter buyers who are legitimately interested in buying a car, you could deal with extremely low offers from those who aren’t seriously able to afford the price you set. While online listings do typically reach the widest audience, there are potentially dangerous people out there who prey on people who post items for sale. When you trade in your car, you can avoid all of these scenarios.
4. Negotiation Power
If you are hesitant about a trade-in because of horror stories about getting thousands of dollars less than the car is worth, consider this: you have power to negotiate. Car salespeople do have some wiggle room when it comes to pricing the trade-in value of a car, and this is especially true when your car is in excellent condition and is one that holds its value well. Before you take your car to the dealership, do some research so you know what to expect as a starting offer.
Before you create your online ad to sell your car, consider these major pros that come along with taking your car to a dealership for a trade-in. If you do some research before you go in, and have a clear understanding of how the process works, it can be a positive experience that will reduce the amount of money you have to pay or finance for your new car.
Photo by Gunther Kia
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