If you've got a car that you need to get rid of, you have a couple of options to get the car sold. You can sell the car yourself in a private party transaction, or you can trade the car in at your local auto dealership. Both options have their advantages; consider your situation to determine which method is best for you.
1. Your Amount of Free Time
One of the drawbacks to selling a car in a private party transaction is the amount of time this alternative requires.
There are several time consuming components for private party transactions; you have to take time to advertise the car for sale, talk with potential buyers, take prospective buyers on test drives, and deal with haggling over the vehicle's price.
If you are short on time, trading the vehicle in at your local dealership, like Best Buy Auto Inc, is a terrific option. Though there may be a little haggling over how much you get for your trade in, the process is extremely quick, requiring just a bit of paperwork to close the deal.
2. How Much Cash You Want to Get for Your Car
In cases where you are short on cash, you want to get the best price possible for your vehicle. When cash is a priority, selling your vehicle to a private party will bring in the most money.
However, to get the best price in a private party transaction, you must be patient. Not only do you have to find a buyer, you may need to wait for the buyer to secure financing. Though it takes longer to get your cash in a private party transaction, you usually get more money in the end.
3. Whether or Not You Plan to Immediately Purchase a New Car
One of the benefits to trading your car in at the dealership is that it can decrease the amount of sales tax that you pay on a new car. Instead of having to pay sales tax on the entire cost of the new car, you only have to pay sales tax on the amount equal to the difference of the price of the new car and what you received for your trade in.
For example, if your new car is $20,000 and the dealership paid $10,000 for your trade-in, you only have to pay sales tax on $10,000 versus $20,0000. Sales tax rates do vary from state to state, but assuming a 7 percent sales tax, you would pay $700 if you traded your car in and $1,400 if you didn't have your trade in.