Trade, Sell or Donate:
Practical Tips for Unloading Your Car

In the life of every car, there inevitably comes a time when you are ready to move on to a new vehicle. Deciding whether to trade your car in at a dealership or sell it privately is a dilemma that plagues many car owners; others find that sometimes it makes the most sense to donate their vehicle to charity.

Below are a few key points to help you determine which option is best suited to your needs when making the move from one car to another.

Trading in Your Car

Pro: Convenience/quick sales cycle
Con: Less retail value than private sale

If you choose to trade in your car, understand that you are not going to get the vehicles full retail (or "blue book") value. Usually, when trading in a used vehicle at a dealership, you should expect to get between 50 and 60 percent of the vehicle's retail value in trade.

When trading in a used car as part of the deal on a new car, it is best to first focus on the price of the new car and discuss trade in value toward the end of the negotiation process. Frequently, car dealers will attempt to offer what sounds like a generous trade-in value in lieu of coming down on sticker price for the vehicle you want to purchase.

Despite the fact that you do not get full market value for the car when trading in at the dealership, the convenience may be worth it for those who value their time and sanity more than money.

Example:
Say that we are going to trade in a used vehicle with a retail value of $10,000.00 The dealership knows that they will not be able to sell it for the full retail value, since every customer wants a discount off of the retail price. Knowing this, the dealership will advertise the car at a slight discount, probably around $9,000.00 However, in order to sell that car, the dealer must make sure that the car is safe and needs no major repairs, and this could include doing some repair work on the car after it has been traded in. Figure that the repairs, touch up and detailing of the car to get it ready for sale are going to cost the dealer about $1,000.00. Also remember, the dealer may have the car on their lot for an extended period of time, and that costs money as well. It also costs money to show the car to prospective customers. And don't forget that the dealer needs to make some money in the process. So, after all is said and done, there is a legitimate reason for why we would only get offered $5,000.00 for our hypothetical trade in.

Selling Your Car Privately

Pro: Opportunity to get maximum value for your vehicle
Con: Can be time-consuming/frustrating, with a longer sales cycle

If you must get the most money out of your car, then the best way to get rid of it is to sell if privately. This is not always an easy process, however. A private sale often takes a long time, a lot of effort, and sometimes results in frustration (depending on the number of prospective buyers you have to deal with, and how long it remains on the market).

Before you decide to sell your car yourself, find some ads for people selling cars like yours and call them. Find out how long they've been trying to sell their car for and how many people have looked at it. Doing this may help you gain some insight on the demand for that particular vehicle in your area.

There are many options for advertising your used car both online and in print. One advantage of online advertising is that the ad can go up immediately and also offers a greater level of detail in photos than is typically available in print publications. Cars.com is a great place to start for online advertising; for print, check with your local papers.

Always be honest and up front about the condition and history of your car with any prospective buyer - providing misinformation could result in legal action against you. If you have the service records for the car, make sure to provide them for the buyer. The more information that you have about the car, the more likely it is that you will sell the car.

Prior to reaching an agreement with a buyer, be sure to get the details on private sale procedures and guidelines from your state's Office of Consumer Affairs or Attorney General's Office. Also, make sure to familiarize yourself with any "Lemon Laws" that may be enforced in your state.

Example:
When looking to sell your car privately first figure out how much the car is worth. Next, decide what the minimum you would sell the car for is.

Let's use the same car that we discussed above as an example. Though the car has a retail value of $10,000.00, a dealership would try to sell the car for about $9,000.00. Therefore, in a private sale, you would want to advertise the car for about $8,.500.00, and not take anything less than $6,500.00 or $7,000.00.

Donating your car

Pro: Avoid liability with convenience and get a tax deduction, while doing something good for charity
Con: No revenue generated

AutoHeroes recommends donating a used car if the vehicle's value is under $2,000.00, if you have decided not to trade it in. One primary argument against selling a low-end car privately is that you could potentially be leaving yourself open to legal troubles if there are any problems with the car after the sale.

The advantage of donating your car is that you have an easy method of disposing your car, you get a tax-deduction for the value of your donated car, and you are helping out a nonprofit organization.

Where to Donate:
Many charitable and nonprofit organizations run car donation programs (e.g. The Salvation Army, Volunteers of America and Red Cross, to name a few). Check with your favorite charity to see if they have a car donation program, or visit the Helping Hands of America Foundation to learn about their popular car donation program.

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