There are many reasons why you’d be looking at getting rid of your existing vehicle.
Perhaps you’re looking to upgrade, or you’d like to capitalise on the recent spikes in COE prices. Regardless of your motivation, there are actually numerous ways to offload your vehicle. You can opt to trade-in your car, or perhaps sell it to a dealer or an individual.
But just what are the factors you have to take into account with getting rid of your vehicle in either of the scenarios? We’ll be breaking down the pros and cons of selling your car vs trading-in your vehicle, which would hopefully aid you in making a decision!
Trade-In
The path of least resistance if you’re looking at buying another car. The firm that you’re buying your new car from will accept your current ride at a rate slightly lower than the market value. If you’re wondering why your car is worth less to the dealer, you need to bear in mind that they need to build in their profit margin when taking your car in.
Your used car may then be resold at market value. This pre-assigned value of your current car will then be used to offset the purchase price of your new car.
But to tempt more into purchasing new cars, dealers are offering what has been termed as ‘overtrade’, where used car values are inflated so one pays less for their downpayment. In essence, a new car with a sticker price of $100,000 will yield a minimum downpayment figure of $40,000. By raising the price to $110,000 and increasing the value of the used car by $10,000, the actual downpayment that you’ll have to pay is only $34,000.
Pros
If you just want to get rid of your current vehicle, trading-in is by far the more convenient option. You’re offloading your old car and purchasing its replacement at the same place. This means less paperwork, and thus, less overall hassle.
This approach also works for cars that may otherwise be hard to get rid of. Think of niche cars, or vehicles that have dodgy histories and/or are heavily used. Afterall, you’d be hard-pressed to find people who want a decrepit car.
Cons
If you’re looking to extract maximum value from your current vehicle, this isn’t an avenue that you should entertain. Bear in mind that there are also many ways that you can sell your vehicle to maximise your returns.
As mentioned above, dealers need to take your car in at a value lower than what an equivalent used car is going for, so there’s a buffer for their own profit. Even for cars that are in greater demand, there’s really only a fixed average value of the vehicle itself.
Coupled with all the convenience fees, you’re looking at potentially thousands of dollars below what your car could sell for on the open market.
Selling
It’s pretty self-explanatory, so we will not go into too much details about what it entails to sell your vehicle. You can either sell it to a dealer, a consignment agent, or go about it yourself if you’re comfortable with handling all the paperwork.
Pros
You stand to gain the most selling your vehicle on your own. There are no hefty commissions for anyone involved in the process, as you’re handling the paperwork on your own.
You can also engage the services of a consignment agent. They may charge you a fee for their services, but their extensive network, and ability to find clients for seemingly any car, are perks that you can leverage on.
The least fuss-free approach is to sell your car directly to a dealer. You may be able to find used car vendors that are able to give you cash on the spot to offload your ride to them.
Cons
There’s no free lunch – you’re doing more paperwork for the greater sum of cash you’d get back from selling your vehicle. If you go at it on your own, selling a car can be an arduous process. From taking the initial photos, to listing the car online, then potentially having to deal with tyre-kickers and all the associated paperwork once a deal is struck, you may find that the hassle isn’t actually worth the extra cash you get should you have engaged the services of a consignment agent in the first place.
With a dealer, you’re likely to expect lower returns, so if you’re looking at a car that the retailer may have in stock, you may opt to trade in your used car for a new one instead.
Or you can use Motorist’s services – we can guarantee a hassle-free, paperwork-free sale within just 24 hours!
Choices, Choices…
Ultimately, it all boils down to your comfort level. Are you prepared to give up some valuable dollars if it means saving you the hassle of paperwork and time? Or are you the sort that does not mind the graft if it means you extract the most monetary value out of your vehicle?
This is a distinction you have to make for yourself. If you’re already looking for a replacement vehicle, do feel free to peruse our extensive used car directory!
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Keyword: Should You Trade-In Or Sell Your Used Car?