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Selling a Car: Trade It In or Sell It Yourself?

Selling your car yourself is only one option when it’s time to replace it. You can also trade it in. There are check marks in the “pro” and “con” columns for each option. In other words, don’t make a snap decision. Here are what we see as the positives and negatives of trading in and selling yourself. 

Trading It In

There are many benefits to trading in your old car, including, most notably, how easy it is. It’s simple: You take your old car to the dealer, the dealer makes you an offer, and you put that money toward buying your new car. You don’t handle any paperwork, as the dealer takes care of all that. Just drive in with your old car and drive out with your new one.

But there’s a major disadvantage to trading in your old car: money. Since the dealer still needs to make money on the car, they won’t give you retail value for it — and they certainly won’t give you as much as you could make by selling it yourself. So while you avoid the hassle of selling your car by trading it in, you may lose hundreds or thousands of dollars.

But while trading in your old car won’t get you top dollar, money may not be as big of a factor as you think. In most states, sales tax is only calculated based on the difference between the trade-in value of the old car and the purchase price of the new one. That means if you get $10,000 for your trade-in and you’re spending $15,000 on a new car, you only pay taxes on the $5,000 difference — not the full $15,000. While that may not offset the full difference between trade-in value and retail value, it can certainly help.

Selling It Yourself

In almost all cases, you’re likely to get more money for your car if you sell it yourself. That’s because the next owner won’t mark it up like a dealer will — and that means he or she is willing to spend an amount that’s much closer to the car’s retail value.

But selling a car on your own isn’t always easy. While creating a listing on is a breeze, selling your own car means meeting with potential buyers, taking time out of your schedule to give test drives and dealing with banks and finance companies on your own. In other words, selling your own car means there will be extra legwork involved — and sometimes, it’s a lot of extra legwork. As a result, the question you must consider is whether the hassle of selling your own car is worth the extra money you’ll get from doing so.

Our Advice

While we recognize that selling your own car can be a difficult process, we think the hassle is usually worth it — especially since the difference between a trade-in offer and a private selling price is often several thousand dollars. Our advice is to try selling the car yourself before trading it in. If that doesn’t work after a few weeks, consider lowering your price, or start thinking about trading it to a dealership.

Related Trade-In Articles:

Editor’s Note: This article has been updated for accuracy since it was originally published.

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  1. I’m trying to see what Kelley Blue Book says about my 84 C4 Corvette what’s 38700 miles on it showroom-ready on the inside Rizal paint 350 Crossfire beauty of a car

  2. I am planning to buy a new car , as of now I owned a Honda Jazz  2006  Miles 11,914 , if I Tradein how much more it cost? Thanks a lot   cp#09158864002

  3. If I trade in my new car for the less value car. And it’s loaned by the bank Who gets the difference ? The bank or myself? 

  4. Do you need to pay income tax on the sale of car to a private party? If so, isn’t it more beneficial to trade in because you pay lower tax for the new car while avoid paying tax on the money you made of the old car?

    •   I think that you only need to pay taxes on the sale of property if you make a profit on it. Seeing as the sale of a car is rarely ever done for more than what you bought it for, There would be no reason to pay taxes on it. 

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