Sell, Trade, or Donate: What to Do with Your Old Car When You Buy a New One
Ahhhh, that new car smell. It’s less about the actual scent, of course, and more about what it represents: fancy new features, a pristine interior, an exterior that’s free of dents and dings, and the possibility of fun-filled road trips to exciting new destinations.
No matter what make and model it is, a new or new-to-you car makes your old one look — well, like a clunker. And speaking of that old car, what are you going to do with it? After all, pretty soon you’re going to be transferring your plate and insurance policy, not to mention your sweet fuzzy dice and dashboard Buddha bobblehead, and you will need to get that beater out of your driveway or parking space.
When it comes to divesting yourself of an old vehicle to make room for the new, there are essentially three different options. Here are three points about what to do with your old car. Read on as we take a look at the benefits and drawbacks of each!
Trading in Your Car
It’s tempting to trade in your car. But is it wise? That depends, say, experts. If you’re buying from a dealership and want to make it your only stop, trading in a vehicle is very convenient. Really, all you have to do is show up with it (and its title) and the dealership employees will take care of the rest.
In addition, you’ll be able to apply the value of your previous vehicle to your down payment on the new one. Knocking a few bucks off the sticker price definitely sweetens the deal.
However, it’s important to realize that by trading in, you might not be able to recoup as much money on ol’ Bessie as you might be able to ask by selling her outright. There’s also the possibility that the dealer will simply jack up the total cost of the new vehicle to reflect what they’re giving you for the trade-in — so you’re not really getting a deal after all.
That said, some people choose trade-ins for their convenience factor. It may be worth taking a loss to eliminate the hassles of cleaning and detailing your car, listing it for sale, meeting potential buyers, and so on.
Selling Your Car Outright
Really want to get the most money you possibly can for your used — or, rather, “previously enjoyed” — vehicle? It will take some time, effort, and elbow grease, but selling it outright is the most lucrative option.
According to Kelley Blue Book, you might be able to net 12% more by selling the car privately than by trading it in. This is particularly true if your ride is in good condition, both mechanically and aesthetically. While you can certainly offer it up on an “as-is” or “needs-work” or “great-side-project-for-someone-who-just-likes-tinkering-with-cars” basis, you’ll recoup the most value by giving it some TLC.
The downsides of selling your car privately? Well, there’s a few of them. It takes time — weeks, if not months, from start to finish. Be prepared for a lot of calls and emails, at least a handful of flaky folks who don’t show up at the appointed time, and of course taking steps to protect yourself from fraudsters. Once you’ve found a buyer and negotiated the price, there’s also plenty of paperwork to fill out. All told, listing a used Ford Focus for sale through Craigslist, Facebook Marketplace, or another classifieds site isn’t the easiest undertaking, but it’s probably the one that will net you the biggest bucks.
Donating or Gifting Your Vehicle
Lastly, you can do a good deed by donating or giving away your car. Have a child, sibling, nephew or niece, neighbor, or other acquaintance who might get good use out of it?
Although you may not think it’s necessary, you should draw up a contract or bill of sale. That will protect your interests and make the gift “official.” The next step is transferring the title, which will require a trip to the local Department of Motor Vehicles.
Some states require additional forms and documents, so be sure to check and double-check that you and the car’s recipient have crossed all the Ts and dotted all the Is.
Donating your car to a charitable organization is a relatively quick and painless way to get it off your hands. However, it’s important to do your homework; in some cases, the donation’s value — or lack thereof — is more of a headache than a help. Only 5% of donated vehicles can actually be used by the charity itself. The remainder are either auctioned off or junked.
Choose a charity that is recognized by the IRS as a 501(c)(3) organization. Make certain that you have all the paperwork in place to avoid an audit and to claim the donation as a tax deduction.
Which Option Is Best for You?
There are numerous factors to consider when you’re deciding whether to sell your old vehicle, trade it in, or give it away to either a charity or an individual. Do you want to make as much money as possible, or would you rather go the easy route and just get someone to take it off your hands? Either way, it’s important to divest yourself of that clunker ASAP, so you can get your shiny new set of wheels that much sooner!