Trading in your current vehicle or selling it yourself each comes with its own pros and cons. Let’s explore the details to see what will work best for you.
Pros: Trading in your car has the potential to be fast and hassle-free compared with selling it yourself. Dealers will always buy your car from you: if it “fits” with their pre-owned inventory, they will probably sell it themselves; if it doesn’t, they’ll send it to an auction where Lower Mainland dealers buy and sell each others’ cars to balance their inventories. For you, this all means there is minimal time and effort spent preparing the car, showing the car, and doing the necessary paperwork once a deal has been agreed upon.
Cons: Trading in your car has the potential to make you less money than selling it yourself. The “trade-in value” is always lower than the “retail value”, and mistaking these two is often a source of disappointment for the owner (you can go here to determine your car’s trade-in and retail values). The trade-in value is lower because any repairs that are required to sell the car (e.g., tires, brakes, timing belt, etc) are now the dealer’s responsibilities, not yours. Because the dealer will sell the car at its retail value after making these repairs, the trade-in value hinges on these things. Hence, the trade-in value must be lower than the retail value or the dealer will lose money.
Simply put: Trading in your car is quick and easy, but it means you will make less money than selling it yourself.
- Sell your car yourself:
Pros: Selling your car yourself has the potential to make you more money than trading it in at the dealer. Retail value is always higher than trade-in value for reasons described above, and depending on the condition of your car and the pre-owned market in your area, you may even be able to sell it above its retail value.
Cons: Selling your car yourself means that the time and money required to prepare and sell your vehicle are all your responsibilities. For example, if your car needs a timing belt change, it is your responsibility to do this. Alternatively, you can inform the prospective buyer that such a repair is needed, but this will decrease the car’s attractiveness and value. There is also the time and effort required to actually sell the car: meeting with people, going on test drives, back and forth negotiations, etc. This is often enough to push people away from selling their car themselves. Generally, the higher the asking price, the longer it will take to sell and the more prospective buyers you will have to meet with. Maximizing the money-made to time-spent ratio requires a good understanding of your current pre-owned market.
Simply put: Selling your vehicle yourself could make you more money, but comes at the expense of time. It is your decision whether the extra time is worth the extra money.
So which do you choose? Obviously, this comes down to you as a person more than it does to your particular car. Because more money can be made from selling your car yourself, we would default to this option, but only if the following are true:
- You have a good understanding of your local pre-owned market and how your model fits into it.
- You are willing to invest in repairs if needed, or are willing to take a financial hit if these repairs are not made.
- You have the time required to spend with prospective buyers.
These traits are generally required to make selling your car worth your while. If they do not describe your current situation, we would recommend trading your car into the dealer.