Four ways to get the most value when selling your car
When you’re ready for another car, it’s time to take a hard look at your current vehicle. Determine the shape it’s in and take an honest look at the body.
If it’s road-worthy but not beautiful, you may be able to sell it on your own. If it has a lot of miles on it, you may have an easier time of it just trading it in. If it’s completely worn and looking rough, you may need to sell it to a junkyard.
Trading your car into a dealership
Trading your current car in for the next one is the simplest way to get it out of your garage. While you won’t walk away with any cash, trading it in will reduce the amount of money you’ll have to pay sales tax on. The sales tax you pay will only be on the sale price of the new car minus the trade-in amount.
For example, if your new car is $20,000 and you get a $10,000 trade-in value, you pay sales tax on the $10,000 difference. However, you may be able to sell the car privately for more than $10,000.
That being said, selling a car privately takes time out of your life. You will have to meet strangers to look at the car and you may have to deal with test drives and other activities that could be beyond your comfort zone. Only you can decide if selling the car on your own will be worth the extra effort.
Selling to a private buyer
You will likely make more in a private sale than a trade-in. Even better, you walk away with cash in your pocket. If you’ve ever bought a used car from a dealership, think back to the condition it was in. It was likely very clean, had been detailed, and smelled great.
To sell your car privately, you’re going to need to do some work. The interior and exterior of the vehicle will need to be spotless. Paying someone to do this will save you time, but it will cut into the proceeds of selling the car. If there is body damage, at least get an estimate for the repair that you can give to the eventual buyer.
To set your sale price, there are several car valuation tools you can put to work to determine a fair price. Review the service records and talk to your mechanic about giving you an assessment of the condition of the car. If you’ve done your own service, make sure you share a calendar assessment of what you did and when.
You will need to arrange test drives and may need to accompany potential buyers. Ask a friend to join you or follow you on these excursions for your safety.
When you find a buyer, make sure to guarantee your payment by either asking for cash or accompanying them to the bank for a cashier’s check. Be vigilant about your safety by meeting in public places or at the bank. Never take a personal check.
Selling to a junkyard
If your car is truly toast and the dealer won’t take it as a trade-in, you may need to sell it to a junkyard. You can also use services such as All Truck & Car to sell the car for parts.
Be aware that some junkyards will haul off the car for free if you sell to them. If it’s hard to start or you have a hard time keeping it running, this may be the best option.
Donating your vehicle to a charity
When you donate a car to charity, the recipients will turn around and sell the car. If your vehicle is unusable, don’t donate it to a charity you care about.
The car you donate doesn’t have to be perfect, but it should have some life left in it. Before taking this step, talk to your accountant or tax professional to see if this action will benefit your bottom line. Depending on your income, a charitable donation can be quite helpful.
We’re a car-driven society. Eventually, we all need new wheels.
To get the best deal in disposing of the old ones, make an honest assessment of the vehicle. Does it still run? How does it look? Could it be a reliable form of transportation for the next owner? If yes, consider trading it in, donating it or selling it privately. If it’s really done, sell it for parts or to a junkyard.