There are two ways to get rid of your old car – Sell it privately or Trade it in at a dealership. What are the pros and cons of each?
Every now and then it’s time for a new car.You could be looking for an upgrade of the model you’ve been using. Sometimes a vehicle becomes too expensive to maintain and you’d prefer a downgrade. Insurance premiums go up and instalments become too costly.Perhaps your warranty is about to run out, or maybe your car manufacturer is set to close their doors and ship out of South Africa, discontinuing the car you’ve been driving.These are common factors and only a small number of the questions you should be asking before deciding on what you want to do.There are generally two options when it comes to getting rid of your old vehicle. You could trade it in to the dealer, which will give you a nice down payment on your new car, or you could sell it yourself.A third option, if you’re driving a Ford, is to wait for it to catch fire and explode and then claim from insurance – provided you’re still alive.If, however, you have a sensible, well-informed taste in cars – how do you decide? And when is the right time?After all, making the right decision could save you a large sum of money. First things first – you need to know the value.
A well-looked-after car is a desirable car. If you’ve managed to keep receipts of any repair work with your service history book, you’re already doing well. It’s worth spending some money to have any bumps or dents repaired, as well as keeping it clean. This will increase the value of the vehicle.If you’re happy with the state of the car, you could do your own research by keeping an eye on car retail websites and seeing what your car could be selling for. Speak to a few dealerships and check what the average price is. If yours has any special features, like those Rockford Fosgate subwoofers you like to show off, leather seats or spinning mags – these could also increase the value.Remember, you don’t have to sell your vehicle at the same dealership where you’ll be buying a new one. Say you own a Peugeot, though. Generally, you’ll get more money if you sell a Peugeot to the Peugeot dealership. You could then take that money over to wherever you’d like.If you’re planning on trading in, negotiate on the price of the new car with a dealer before even mentioning that you’d like to trade in. Also, it helps to do this toward the end of the month. Salesmen have a target to hit – that’s your bargaining power.Cars that are still under warranty will fetch a higher price. Generally, the value of your vehicle depreciates at a rate of 15% - 20% per year. So, by the fifth year your vehicle could be worth half of what you originally paid for it.Certain models, such as the VW Polo or the Toyota Corolla, continue to be popular and hold their value for much longer.
Trade Your Car In
Once your warranty runs out, the value of your car will plummet. Likewise, if the manufacturer has ceased distribution to whichever third world country you live in, you’re going to have trouble acquiring parts or performing proper maintenance, etc.Luckily, the first option you have is usually incredibly easy. To trade your car in, you take it in to the dealer who will make you an offer based on a number of factors. These could be the age of the car, the model, the mileage, the condition or make.You then put that money toward buying a new car, or take the cash and run.Usually you don’t need to deal with any paperwork because the dealer will take care of it all for you. Drive in with your old car and drive out with your new one. Seems pretty easy, right?Of course, the downside is that you could get a lot more money if you were to sell your car privately.
Sell Your Car Privately
Typically, you could get 10% - 15% more money if you sell your car privately. Unfortunately, it’s also a lot riskier, and you have to go through a number of hassles.Not only will you have to field a number of phone calls, but you’ll also have to make yourself available according to the schedules of prospective buyers. Scam artists, in particular, pose a big threat. You’ll also have to put yourself at risk of hijacking and robbery by allowing complete strangers to test drive the vehicle.Let’s not even get started on the paperwork. Road worthy tests, the vehicle’s full service and accident history, change of ownership – these cost money and time.However, if you know your car and you’ve got experience in selling cars in the past, these shouldn’t be much of a headache for you.