Your Used Car: Should You Sell or Should You Trade It?

Have you decided it’s time to upgrade your ride but need to beef up your new car fund? Selling your current car is a great way to get the extra cash to help you get your dream car. Simple, right? Not so fast. First you need to determine whether it’s better to sell it yourself or trade it in at the dealership. Here, we break down the positive and negative aspects of both options.


Sell it yourself if: 

  • You want the best bang for your buck.

Selling your car yourself allows you to set the price, whereas a dealership will only offer wholesale value or less. Just make sure to not undersell—or try to oversell—yourself. Kelley Blue Book is a great resource to determine the true market value of your car so you can get the most out of your sale.

  • You don’t mind the extra effort.

Selling it yourself includes placing ads—some of which may cost you—fielding phone calls and/or emails from potential buyers, meeting with strangers so they can see the car in person, and handling all of the paperwork for the title transfer and sale.

  • You don’t need money for a down payment.

Depending on the market, it may take significant time to get your car sold and get paid. If you need the profits to complete your purchase, a dealership trade-in may be a better solution.


Trade it in if: 

  • You’re willing to get less money in exchange for convenience.

Your dealership can act as a one-stop shop when you trade your car in as part of your new car’s purchase. Simply agree on an offer, sign some paperwork, hand over the keys, and you’re done!

  • You’re incentivized by a tax advantage.

Many states only charge tax on the difference between the trade-in value and your new car’s price. Keep in mind that seven states do not offer this credit, so if you live in California, Hawaii, Kentucky, Maryland, Michigan, or Virginia, or in the District of Columbia, you will pay sales tax on the full purchase price of a new car.

  • Your car doesn’t have much life in it.
    Few people will want to buy a car that is in clear need of significant work, but dealerships will usually trade it in for a few hundred dollars to secure the sale of the new car.

Whether you sold your old car yourself or traded it in, now that you’re free to purchase your new car, it’s time to get the best auto loan for you. Suffolk Federal’s great low auto loan rates finance up to 100% of your new car purchase and go even lower with automatic payments!

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