In this episode, John Nielsen from the American Automobile Association is back with great car-buying, car-driving, and car-care tips. In this video he discusses a question that a lot of car owners ask: when you buy a new car, what is the best choice for what to do with your old one?
According to Nielson, there are three primary options. You can trade your car in, you can sell it yourself, or you can keep it. To which we might add an additional option: that of donation.
Sell your car on your own
You probably have really enjoyed this car. And chances are that you’ve taken good care of it. In a sense, everyone loves their car, it becomes part of them, and you’re probably going to be able to sell it to someone who will recognize its value. Unfortunately, “your car is probably worth less than you think it is,” says Nielson. If you’re completely honest, you’ll see that this machine isn’t perfect (if it were, why are you getting rid of it). Take a half an hour, a notebook, and a pen, and go around and through the car thoroughly. How clean is it? What shape are the tires in? What about the paint job: are there scratches? Other bodywork problems like dings or dents? What does the interior look like? Is the mileage about right for a car it age (AAA recommends an average of 12,000 miles per year)? Now is a time to be really honest with yourself and assess the condition of your vehicle. How clean is it, if it’s in very good shape, the tires are good, the paint’s good, the interior is good, the mileage is right in line about 12,000 miles a year, you are going to have to consider that. If there’s a problem in any of these areas, then you have to downgrade the condition from good to fair. It might be difficult, but you have to be honest with yourself, because someone else will be for sure.
At this point, with your list in hand, go online and get the information on average what you can hope to get out of your vehicle, selling it yourself. You can also go to sites like cars.com or autotrader.com and get information of what other people are asking for their cars or trying to sell their car for. Remember that’s what they are asking: it’s never what the car actually sold for (a little like real estate) and so it’s probably not a true reflection of what you’ll be able to get for your car.
So you’re likely to feel that you’ll get your best deal by trading in and trading up. The old car will fetch a lot of money and bring down the price of the new one. Right? Not so much, says Nielson. Again, you have to be very clear about your car’s condition. The real problem about trading in is that you’re likely to make less money. The dealer has to factor in the cost of making repairs to your car if necessary, cleaning and detailing it, and then adding on enough to make a profit for themselves. This isn’t a wide margin and you’re the one who will be making up the difference. It’s the best route to take if you have absolutely no time to deal with people looking at your car, if you don’t want to have to keep it looking good all the time, or if you’re in a hurry; but it won’t make you rich.
The third option is to simply keep your car, you can keep it and give it to your children, and you can give it to a friend.
Finally, there are many nonprofit organizations that will gladly come and take your vehicle away. It’s later sold at auction: the nonprofit makes the money from it, and you get a little something to help with your taxes.