If you are planning on getting another vehicle, you may be wondering if you should sell your car or trade it in. Both are viable options that have pros and cons, and each can help you make a down payment if you plan on financing your next vehicle.
However, one may be better suited for you than the other depending on a few different factors. There are some tips of trade-in or sell car the following:
Before Trading in Your Car
Before you jump the gun on getting rid of your current car, make sure you know how much it is worth.
Check vehicle valuation sites such as Kelley Blue Book (KBB) and NADAguides, and get it appraised by at least two different dealerships. You can decide if it is better to trade it in or sell it privately using the numbers you were quoted. It is looking at the pros and cons of trade-in car vs private sale.
Pros and Cons to Trading in Your Car
Many car owners are choosing to trade in their vehicles and use the equity toward a down payment. It is a common practice that dealers and lenders are familiar with. You can check out why many Americans opt to trade in their car and the major negative that comes with it.
The Good
Quick and easy process
When you are trading in your vehicle, the dealership handles all the paperwork. All you have to do is bring in the proper documents, such as the title, the payoff letter if the title has a secured third party on it. The registration slip is transferring the license plate.
Potential tax benefits
Trading in a car means you have the potential for better to sell your car or trade it in tax benefits. In most states, you only need to pay sales tax on the difference between the trade-in’ is value and the price of the new vehicle.
The Bad
May get less
The dealer is willing to buy your car and they may not be the same as what KBB or NADAguides tells you its worth.
Many dealerships are used Black Book and auction values and appraise trade-ins on what these sources say. You may be able to negotiate the price of your trade-in, but don’t be surprised if the dealer is offering less than what you are expecting.
