Blogs Car Info Our Show Deals Mechanics Files Vehicle Donation

Trade in vs. sell privately?

I have a 1999 Honda Civic in good, but not excellent, condition.

  1. I’m looking for a new car. Some dealers seem more interested in appraising my car for trade-in than they do in selling me a new one. What’s with this?

  2. One dealer told me he’d only buy my car for parts, for maybe $400. I have several almost new parts in it that alone would sell for much more. (I had been unemployed, and maintaining my car was all I could manage at that point. So I poured money into it these last few years.) Plus, Kelley Blue Book and Edmunds say the trade-in value is around $2,000. I told him at that point I’d donate it, because it’s quite drivable. He then said there’s actually a huge market for older cars in good condition and I might do better to sell it privately. As it happens, someone is very interested in buying my car. How does one sell a car privately? I mean, how do I sign it over to a buyer?

  3. Another dealer was very insistent that I not sell it privately, because there are tax advantages to trading it in. So what is this all about? Could we just deduct the trade-in value to the new car price, so I have less tax to pay?

  4. The private sell value is about $1,200 - $1,800 more than the trade-in value, per Kelley Blue Book. So which is better in the end?

You have the financial advantage when you sell your vehicle. The dealer has the financial advantage if you trade it in. It’s really a “no-brainer” in this situation. I never trade in a vehicle and that’s been my personal policy for 40 years.

Everything you’ve been told by dealers is correct - for them to maximize their profit. None of it is correct for you to save the most money. If you’re careful (cash only) and patient, you will alway come out ahead selling it on your own. They want you to trade to get a used car cheap, and to confuse the new car purchase price with trade in value issues.

  1. First, and most important. You should not be buying another car if you already have a good car.

  2. “How does one sell a car privately? I mean, how do I sign it over to a buyer?”

    Dude. Seriously? Call your DMV/MVA (the people you get your driver’s license from).

  3. The dealer is lying. That is a pretty good rule of thumb.

  4. Seriously?

This has been my policy for, like, the last 3 minutes.

There is a high demand for Civics in drivable condition. It shouldn’t be hard to sell the car. Transferring the title to the buyer is very simple. If you’re a AAA member they will do it for you. There are probably several other places in your town where you can transfer the title. Check with your state’s Motor Vehicle Department.

You will almost always come out ahead selling the car yourself rather than trading it in. Trading it in gives the advantage, and the money, to the dealer.

As long as you get cash from the buyer you’ll be OK. I just sold a car a few weeks ago. I put it on Craigslist and got a call the same day. The first person who looked at it bought it. The whole transaction was very simple.

Price the car correctly and it will sell.

“3. Another dealer was very insistent that I not sell it privately, because there are tax advantages to trading it in. So what is this all about? Could we just deduct the trade-in value to the new car price, so I have less tax to pay?”

This is state dependent. For some states, you only pay sales tax on the difference between the new car and the trade in price. For others, you pay sales tax on the difference between the new car and the sale of the old car (trade in or private party sale within 30 days). And in some, you pay sales tax on the price of the new car period.

If you only get the tax advantage with the trade in, then its best to trade in the car if the trade in value and the private party sale are close, i.e. if the trade in value * sales tax rate is the same as the private party value, then just trade it in. For the numbers you’ve said, you’re much better off selling it privately. You’ll get an extra $1,500 while paying sales tax of ~$200.

Most new car dealers really don’t want older used cars. After a car is six or seven years old, it doesn’t have loan value. Dealers usually dispose of these older cars at auctions. I have had two experiences along this line: 1) In 1973, I was trying to trade my 1965 Rambler for a 1971 Ford Maverick Grabber. The dealer price on the Maverick was $2495. I asked what it would be if I traded in the Rambler. The price dropped to $2200. The sales manager glanced out the window at the Rambler and said, “You can have the Maverick straight out for $2000, but take your old car with you”. I bought the Maverick and sold the Rambler in a day for $250. 2) In December of 1995 we needed to buy another car. We found a great 1993 Oldsmoblile 88 at a dealer that had only gone 18,000 miles. The price on the Oldsmobile was $14,995. I asked about trading in my 1978 Oldsmobile. The price dropped to $14,500. After they looked at my car, the price of the 1993 Oldsmobile dropped to $14,200 straight out. I bought the car and kept the old one.
Keep in mind that when you trade in a car, there are two transactions: 1) you are buying a car from the dealer; 2) he is buying a car from you. Keep it simple–buy his car at the best price you can get, but don’t sell him your car. He doesn’t really want it anyway.

You’ll do better selling it yourself, but allow me to make two suggestions.

  1. get temp plates for the new car and maintain the plates on the old one unttil you sell it. It’s much easier to sell a used car if it can be test driven. Most people won’t even bother considering a car they can’t test drive.

  2. document the sale in detail in writing, with an “as-is” clause.

Also, mention the new parts but don’t factor them into the price. Their only real value now is that they kept the car running.

New parts will mean NOTHING when you try to sell it.

You should always try to sell the car instead of trading it in. Dealers play games to make you think you’re getting a better deal…but in reality it’s a GREAT deal for THEM…And LOUSY deal for you.

#2 Sounds like that dealer is being honest with you. They don’t want to deal with a used car unless it’s less then 3 years old. Anything older and they sell at auction.

#3 What an idiot…How much spin and out and out lies can they possibly tell??? A car salesmen giving you tax advise!!! I have a nephew who’s a GREAT car salesman…Been doing it for over 20 years…Top salesman for this large dealership (I think they own 20 dealerships around the country) many times over the years…And he BARELY passed high-school. And you’re going to believe someone like this on TAX advise???


  1. First, and most important. You should not be buying another car if you already have a good car"

Um, it’s a 12 year old Civic. I would say its time to trade.

First rule is never say always. If you can easily sell it yourself, you’ll be better off. Last car I traded had 530K on it and I was happy to not have to dispose of that one myself. DMV will take care of trasnfering the title but you need to be careful in taking the payment. You really want only cash these days. There are counterfeit cashiers checks floating around that make them very suspect.

I’d sell it myself. If your state requires emissions or safety inspections, I would get them done and certified acceptable. Then all the new owner has to do is buy it and register it. It doesn’t have to be perfect; just good enough to pass those inspections if the exist.

Okay, thank you, everyone, for your good advice.

About the dealer who said there are tax advantages for trading in my old car, I would certainly hear what he has to say, but then I’d go home and run the numbers and check things through before doing it.

However, you all overwhelmingly recommend selling it myself, so I will probably do that.

Certainly sell it yourself. It will go fast.

I sold my 97 Taurus almost a year ago. I didn’t even buy a for sale sign. I told a few people at work that I was going to sell it and within 24 hours I had 5 bids in hand, all at above Kelly Blue Book value.

A coworker soon after sold a 98 Civic. She similarly was able to move it in just over a day at full blue book value.

In this day and age, selling it private party is EASY, you’ll get FAR more than you will from a dealer (I got over 4 TIMES as much), and you won’t pay one cent more in taxes. Your new car will be taxed at full purchase price - regardless of any tradein…

Same car, a year ago. Sold my 99 Civic last summer to my neighbor for $2500, $500 less than what I was asking for it(he was tickled pink when I showed him the receipts that I’d kept over the years). This past spring there was a large hail storm that blew through the area they were driving through so they got insurance involved. The adjuster came out and looked at the car, got on his phone and offered to pay them $2200 for the damage he saw, which was just under half the average value similar vintage Civics were going for in the area.
The kicker was, the dings in the hood was from me when I used the back side of the ice scraper to clear ice off the hood of it and one of my buddies forgot there was a prop-rod holding the hood up, and not gas shocks. I looked the car over when he told me about the hail, told him about the dings and small dent(told him about it when he bought the car, but he forgot about it) in the hood and said there didn’t look to be any new damage done to it at all.