Looking to get rid of your car? There are two basic approaches: Trade it in (or sell it) to a dealership, or sell it yourself online. Each path has its own pros and cons.
Pros of Selling to a Dealer
- It's fast. Going through a dealer is the quickest route to selling your car, and dealers are putting an emphasis on making this process as fast and easy as it can be. Selling a car yourself can take a few weeks or even longer; if you need to offload the car in a hurry, selling to a dealer or trading it in is just plain faster.
- It's easy. Dealers will handle all the necessary paperwork for the DMV and you won't have to worry about a check clearing if it's from a dealership. If you sell it yourself, you'll be responsible for listing the car on the internet, organizing test drives and gathering all the paperwork that goes into a used-car sale. This can include title transfers, a bill of sale and any other necessary documents, which can vary by state (so check with your local DMV for more details). Not to mention the paperwork the buyer would need to have, as well.
- It can save you on taxes. If you're buying a new car along with your trade-in, many states will deduct the trade-in amount from the price of the new car when your sales tax is calculated. That means that if your new car costs $20,000 and your trade-in is worth $6,000, you'll only pay sales tax on the remaining $14,000. (Places that do not offer this are California, Hawaii, Kentucky, Maryland, Michigan, Montana, Virginia and the District of Columbia.)
Cons of Selling to a Dealer
- Money. You're likely to get less money than if you were to sell to a private party. Dealers pay wholesale prices when they buy used cars, and those prices are lower than private-party prices because dealers need to keep the lights on, pay salespeople and more. Selling it yourself just takes your time and effort, instead.