When it comes to buying a new car, you’ll have to decide first what to do with your old car. Perhaps you’re a generous soul and want to donate your vehicle to a local non profit. You’ll get a tax break for your generosity and as long as the car is paid for with a clean title, your concern about what to do with it ends there. If you don’t plan on donating the vehicle, chances are you’re looking to tap into the equity that you might have in it. To take advantage of an equity scenario, you really have two options: private sale or trade in.
Private sales are the way to go if you want to pull as much equity out of the car as you can. Remember, the more money in your pocket, the greater down payment you can make on your new car. A bigger down payment will mean lower monthly payments. It behooves you to march down to your nearest general retailer and put a for sale sign on the vehicle at least testing the waters to see if any fish will bite. You could stand to make a few thousand dollars more on a private sale than any other scenario. If your car is completely paid off, depending on its value, you could pocket even more. Check the value of your vehicle, and a reasonable private sale price, on a reputable website like Cars.com.
If you decide not to opt for a private sale, you can negotiate a trade in with a dealership. You will want to be educated about your car in this scenario too. Check the value of the vehicle, assess the condition that it’s in, and be reasonable with your expectations. You won’t get private sale prices from a dealership. You won’t even get close. Also be sure not to divulge how much you owe on the vehicle if you have considerable equity. You want the dealership to offer more than you owe so that you can apply that overage to offset the cost the new car you’re buying. They might tell you that they need to know in order to make a deal with you. But, they really don’t. Trade-ins are never the best bet. Like casinos in Las Vegas, the house always wins. But, trade-ins are a solid option if you don’t want to be bothered by dealing with a private sale or if you’re looking to get into a new car quickly.