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Should You Trade in Your Car or Sell It Privately?

202208 private vs trade in 2 scaled jpg Sell a car privately or to a dealer | Cars.com illustration by Paul Dolan

Even as the inventory shortage drives up the costs of buying a new vehicle, there’s one consolation for shoppers looking to sell or trade in their car: higher used-car values. The median price for all used vehicles among Cars.com dealers was $24,211 as of July; that’s 40% higher than July 2020. When you’re ready to offload your vehicle, you have a choice to make: Do you sell it privately, trade it in or sell to a dealer?

Related: Sell Your Car

Generally, selling privately carries a financial advantage, while trading in or selling to a dealer is a faster and simpler process. See which route is best for you and learn how to get the most money for your used car regardless of how you sell it.

Why Sell Privately?

sell used car 2022 01 smartphone photo scaled jpg Selling a used car: taking a photo | Cars.com photo by Christian Lantry

Selling your vehicle privately can be the best choice if the goal is getting top dollar for it. Unlike dealers, private-party buyers aren’t usually in the business of buying and reselling vehicles for a profit. This means you’re more likely to get a higher offer for the car. With a private sale, you can field multiple offers and accept the highest one, whereas trading in or selling to a dealer leaves only a small window for negotiation.

In some cases, selling privately can also mean getting more money for an older used car. Dealers will usually send older, high-mileage trade-ins to a wholesale auction which means added costs for them — and a lower offer for you. Meanwhile, the inventory shortage has left few affordable options for shoppers: Among Cars.com dealers, the median price for a 10-year-old (model-year 2012) used car was $16,331 as of July 2022. Two years prior, the median price of a 10-year-old (model-year 2010) vehicle was just $8,995. If your older vehicle is in good shape, it will likely draw interest from budget-minded shoppers.

Why Trade In or Sell to a Dealer?

dealership 2021 ccl 4479 customer dealer lot scaled jpg Negotiating on a car at a dealership | Cars.com photo by Christian Lantry

Sellers who value their time more than the proposition of extra cash will appreciate the convenience of working directly with a dealer. While a dealership is a one-stop shop where you can buy a new vehicle and trade in your old one, selling privately requires more legwork and brings some uncertainty: You will need to create an ad and list the vehicle online, stay in contact with potential buyers and meet strangers for test drives when requested. Even if you have an acceptable offer on the table, you can’t let your guard down until the deal is closed. This involves making sure you receive payment and transferring vehicle ownership.

If the financial advantage of selling privately doesn’t justify the hassle in your book, trading in or selling to a dealer is a less demanding alternative, but it still requires some prep work. As with a private sale, you’ll need to research your car’s value, gather all the necessary documents and prepare it for appraisal.

Not only does trading in a car save time and hassle, it can come with a tax benefit to help offset the financial disadvantage in some cases. If you buy another car at the same time, the trade-in value of your used car can be applied toward its purchase price, lowering the total tax amount you owe. For example, if you apply a trade-in amount of $10,000 on a new car’s $30,000 negotiated price, you’ll be taxed on the $20,000 difference instead of the full amount. (It’s worth noting that this benefit is only available in states that offer a trade-in tax exemption and charge taxes on car sales.)

How to Get the Most Money for Your Car

Whether you decide to go to the dealership or sell privately, taking the time to prepare can help you get more money for the vehicle. As the inventory shortage drags on, keeping used-car values elevated, you may be surprised by how much your car is worth. Estimate the market value with tools like Cars.com’s used-car selling page and get appraisals from multiple dealers or retailers like CarMax. Prior to the appraisal, prepare the car by cleaning it inside and out, completing minor repairs and collecting all accessories like extra key fobs.

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Cars.com’s Editorial department is your source for automotive news and reviews. In line with Cars.com’s long-standing ethics policy, editors and reviewers don’t accept gifts or free trips from automakers. The Editorial department is independent of Cars.com’s advertising, sales and sponsored content departments.

Photo of Jane Ulitskaya
Former News Editor Jane Ulitskaya joined the Cars.com team in 2021, and her areas of focus included researching and reporting on vehicle pricing, inventory and auto finance trends. Email Jane Ulitskaya

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