Donate |

Pros & cons of trading vs. selling

Last updated: May 2013

Trading in


It's an easy way to dispose of your current car. Just turn it over to the dealership.

You will get less money than selling it yourself. At best, you should expect to get the vehicle's wholesale value.

You can use the trade-in amount as the down payment on the new car.

To get the best price, you will probably have to haggle with an experienced salesperson over the trade-in value.

There's a tax advantage. Most states charge sales tax only on the difference between the trade-in value and the new-car price.

Selling it yourself


This requires considerable effort, including placing ads, taking phone calls, dealing with strangers, and giving test drives.

You'll usually get the most money for your car, somewhere between the vehicle's retail and wholesale values.

You might not be able to sell your current car until after you buy your new car. So you won't be able to use the money as a down payment. If the old car isn't paid off, you could have an overlap of car payments until you sell it.

You will need to negotiate with a buyer, but most usually aren't as experienced at haggling as a professional car salesperson.

You might have to pay more sales tax on the new car, but if you get more money for the old car by selling it yourself, you could still come out ahead.

   

E-mail Newsletters

FREE e-mail Newsletters!
Choose from safety, health, cars, and more!
Already signed-up?
Manage your newsletters here too.

Latest From Consumer Reports

Smart phones
SMART PHONE REVIEWS
LG G Flex bends but doesn’t break in our testVideo This curved smart phone surpasses LG's flexibility claims by 1,000%.
Toyota Highlander
SUV REVIEWS
Toyota Highlander is the family sedan of SUVsVideo The redesigned 2014 model is refined and people-friendly.
news_earth_green
HOW TO WIPE DATA FROM DEVICES
Best places to sell your used electronic gadgets That phone, tablet, or computer you no longer want could be worth hundreds.
Health Health
HOSPITAL RATINGS
Too many people return to the hospital after discharge We'll show you how to get out and stay out of the hospital.
2012-Chevrolet-Volt-charging-thumb-240xauto-3849
ELECTRIC/HYBRID CAR REVIEWS
Dealers aren't always plugged in about electric cars Also in our study, not all staff seemed enthusiastic about making EV sales.
TOASTER OVEN REVIEWS
Keep your countertop appliances in tip-top shape Stop your blender, coffeemaker, toaster, and more from going on the fritz.

Connect

and safety with
subscribers and fans

Follow us on:

Cars

Cars New Car Price Report
Find out what the dealers don't want you to know! Get dealer pricing information on a new car with the New Car Price Report.

Order Your Report

Mobile

Mobile Get Ratings on the go and compare
while you shop

Learn more