I regrettably have to sell a car that I love because I’m having money troubles. I need to get as much money for it as possible, and I need to get another used car for considerably less that I make from selling my current car (so that the difference can help in the money troubles).
I figure, if I take my car to a used car dealership I’ll get less than I could if I sold privately- taking into consideration that the dealership then needs to make a profit when they end up selling the car.
Now, however, it strikes me that any advantage to selling privately might not be considerable. Reasoning that if the dealership sells my car, after having bought it from me, they will be able to sell it for more than I would have been able to sell it for- considering higher consumer confidence buying from an established reputable dealer vs. buying from some guy with a Craig’s List ad // also the covenience of being able to finance the car vs. having to pay the full amount up front (as I would need to have happen in a private sale).
Also to consider, I will need another car of lesser value. I’m wondering if, from a dealership, the cash paid to me combined with the value of a new (to me) used car might be higher than the straight price the dealer would offer me for my car if I was not trading it in, but rather just selling it outright.
And a BIG question I have in my mind:
I assume the standard practice with trade-ins is to trade in a car of lesser value than the car you want to take home. I will want to trade in a very good car and take home a new (to me) used car of lesser value plus cash. Would a used car dealership want to avoid paying any cash out in the first place, and thus refuse the deal just as standard practice?
Hoping some Dopers with more experience in this can offer some advice.
Sell the car yourself. No way is a used car dealer letting you off the lot with any of his cash in your pocket.
You are overthinking it.
Most dealerships want to screw you on the value of your trade-in AND also screw you on the price of the new car. Selling it yourself is unquestionably the better thing to do if you want to maximize the money. You need to also read up on used car buying strategies and common scams before you buy a new one. Hint: Just walk in, make a fair offer on one you want and don’t allow them to add one cent in extras or let them start playing shell games. Having your own financing lined up is also a good idea although your scenario might allow you to pay cash which is especially good for “take it or leave it” negotiating. It is hard to get burned if you do you research, set your offer in concrete, and let them decide whether they want it or not completely as is.
If the dealership wants to buy your car, they will offer you trade-in value for it. If you sell it privately, you can ask for and usually get more. Our store does buy cars outright from people when they just need to unload them. Carmax will also do this. You are correct that most of the time, cars that are traded are of lesser value than the car being purchased. It’s not always the case though, and we have sent home people with money in their pocket. One thing that you did not address was if you own the car outright or if you are still making payments on it. This will make a difference.
I’m not sure of the wisdom of your solution because cars aren’t meant to be investments. They never appreciate (unless they are collector items) and unless you have a Honda or a Toyota, which hold their value pretty well, you’ll be lucky to make any money on a used car.
If it runs well, I’d consider keeping your current car and getting a second job for a while. The problem with your scenario is that you’ll probably be looking at either a quality car with a lot of miles (Toyota Corolla) or a crappy car with less miles (e.g. a Ford Taurus). Either way, you have to consider that repair bills may be in your future. At the very least, have the used car checked out by a mechanic before you buy.
To answer your question, though, in both instances you should look at prviate sales because it avoids the middle man mark-up.
Hint: if there’s an international company in your area, I’d suggest asking if there’s a bulletin board for used car sales. At my company, employees who have been relocated have been known to sell great cars very cheaply because they’re being reloed outside of the country. A desperate seller is a good thing for a buyer.
I agree. You stand to lose good amounts on both ends of this deal. What kind of car do you have, anyway? 
Whether buying or selling a car, doing a private transaction costs you less/gets you more money than the same transaction at a dealership. Correspondingly, the private transaction requires more time and trouble from you. So which can you better afford, time or money?
There’s also the logistical of matter of whether you can do without a car for however long the period is between selling the old one and buying its replacement. Or alternatively, can you come up with cash to buy the replacement before selling the old one? If you must continously have a car, and cannot buy one outright, that limits your options.
Seems like Doper wisdom is overwhelmingly supporting my original notion that I’m better off doing it privately. Sometimes I just need you guys to confirm what I already know.
The reason why I was second guessing myself . . .
Time is starting to become a factor. In addition to the existing money problems, there are financial commitments looming on the horizon.
Not making payments. I own the car outright.
Actually, it is a Toyota. How much does this change the equation?
It’s a 2005 Prius (which wishful thinking tells me a dealer would like to have on his lot), a little over 40,000 miles, never missed a manufacturer recommended scheduled maintenance.
Did I mention how much I hate the idea of selling this car?
If there is any other way you can make the money, don’t sell that car.
Any other car you buy is going to cost you more in gas, plus if it’s older it’s going to cost you in repairs.
But if you have to sell it, sell it privately. Then buy an incredibly cheap car–like a $500 last-a-year car that costs nothing to insure. If you are giving up such a sweet ride, you might as well use all the money for your financial problems and then start saving for a better car.
I don;t know what the prices are where you are, but around here (according to kbb.com) an '05 Prius with 40k goes for $12,500 to $15,500 trade in and $15 - $18,500 private party. The prices vary depending on options and condition, obviously.
So you are looking at roughly $3000 more for selling it yourself.
On the buying side, the same car retails for about $22000 at a dealership. So buying a car from a private party will save you a bunch too.
I would only add that dealerships will not only just offer trade-in, but LOW trade-in. When you look at the Blue Book values online, figure you will be offered the lowest price regardless of condition of the vehicle. I was offered $14K for my '03 Honda CRV. Sold it myself for $17K. You just have to be a bit patient.
Your problem is that you are in a hurry and need the money.
This smells and they will spot you a mile away at a dealer. Don’t even think about doing that. For example, even as a private “civilian” I’m always looking for a nice car, and I have the money, but I don’t need a car however, so I can make ridiculously low-ball but reasonable offer otherwise - to guys like you, who really need to sell the car, or think they do. I can walk away.
As you noted the markup on used cars (and thus the profit) is far more than any realized at a new car dealership. Somehow you have to determine the wholesale value of your car and get something close to that or better from a private buyer.
Hmm, you know it’s odd. I own a 2001 Saturn SC2 worth $5-7K and was thinking about buying a Hybrid. Where do you live? Would a low milage Manual Tran Saturn be interesting to you as your new cheaper car? I could pay the differnce in cash.
I’m in Los Angeles, if you’re in San Jose it’s kind of a long trek for either of us for a deal we’re not certain of. However, I’ve temporarily enabled the “allow other posters to contact me” option. So, if you want to entertain the idea, feel free to send me an e-mail at least.
Once again, I’d strongly advise you to come up with a Plan B. You will lose money on either end of this transaction, and you’ll be stuck with a $5-8k car that will cost you more in terms of maintenance, gas and insurance in the coming years than the one you are currently driving. If you keep this one, it should last you for another 10 years!
Have you at least researched what kind of car you’ll be able to get for the money you intend to put towards it? If you haven’t, I strongly urge you to visit a dealer, and peruse the want ads, to figure out what is in your price range. I’d recommend sticking with the tried-and-true brands, such as Toyota or Honda. It is not uncommon for a Corolla to have 200k miles on it. It would be a small miracle if a Ford Taurus made it to 200k miles.
I really believe that you will regret selling a 2005 Prius with 40k miles. Someone will be walking away with a great bargain and it won’t be you.
I’ve not found this to be true. Dealers will rarely offer more than low book, regardless of your financial state or needs. I’ve been a salesman in the past and the dealer I worked for would almost never do that unless the seller was a friend of the owner. I’m never desperate, I buy a new car every 2-3 years, and I pay cash. Dealers don’t care; in a hurry, not in a hurry, doesn’t matter. Profit margin is the ONLY motive. When you walked away in the past, did the dealer come running after you to offer a higher price? I would bet not.
It’s worth more if you have the carpool lane stickers on it, since they are no longer available. If so, I’d recommend a private sale.
No no, I wasn’t talking about dealers, nor offering more than bluebook. I’m just sayin’ - nobody should be in a hurry to sell a depreciated asset they owe money on.