TRADE-IN VS SELLING PRIVATELY

If you’re buying a new car and have an old one to get rid of, you have one of two options: trade-in at the dealership to use as a down payment or sell it privately online. We’re going to examine the pros and cons of each option.

TRADE-IN OPTION

 

The major benefit of trading-in a vehicle is how easy it is. You go to a dealership, they appraise your vehicle, if you agree, you simply use your vehicle as a down payment and leave with a new vehicle.

The major disadvantage is how much you’ll get for your car. Dealerships can’t offer you retail value for your vehicle because they need to re-sell it after. So you could lose hundreds to thousands on your vehicle but if you are looking for convenience, then trading-in the vehicle may appeal to you.

SELLING THE CAR PRIVATELY

In most cases, you will get the most money from selling privately. The downside to this is taking time out of you schedule to respond to inquiries, show the vehicle, go for test drives and not having the option for potential buyers to get auto financing. Especially if you have a car of high value, most customers need financing and that would make selling of your vehicle a difficult task.

If you have a busy life, you may not opt for selling it privately due to the hassle you’ll go through. However, you will usually make more selling privately by hundreds to thousands to what dealerships can offer you.

SUMMARY

It comes down which one you value more: your time or thousands of dollars? If you can, try to sell it online first. If you’re not getting any bites, then lower the price of your vehicle. If it still doesn’t look like it’ll get sold, then use trade-in option as your last option.

IS IT BAD TO SHOP AROUND WHEN LOOKING FOR CAR FINANCING?

Too many times people think they are being smart shopping around for quotes.

DON’T SHOP AROUND.

Most dealerships go to the same lending institutions when they apply for auto financing on your behalf. The answer they receive is what every dealership you go to after will tell you also.

If you start giving your SIN to every dealership, that means it’s getting pulled again and again and your credit bureau will take multiple hits. It’s also unfavorable for lenders to see many pulls in a close time frame (within one year). It will just keep reducing your chances of getting approved and interest rates might increase.

Instead, find one reputable dealership to work with and pick a finance manager that you feel comfortable discussing finance matters with. A good finance manager will help look at your budget and negotiate on your behalf the best rates from lending institutions. They will be knowledgeable on vehicles and help you locate your perfect car with a payment plan that suits your credit history, income and needs.

Car Loan Specialists