Car Buying Advice
Step-by-step: Buying a new car
Not sure where to start? Whether you are looking for a fuel-efficient small car, a sporty convertible, or a family minivan, Consumer Reports can help guide you through the new car buying experience. We give you the essential information you need to choose, buy,
finance, and maintain a new car. Also, see our used car guide.
- Choosing a car
- At the dealership
- Car pricing
- Trading in your car
Choosing a car:
In this section
Financing
In this section
- The trade in
- How to sell a used car
- Get more for your old car
Financing
Get more for your old car
Thinking about trading in Old Faithful for a shiny new model? Read this first
Now that your trusty, or not-so-trusty, car has passed the 100,000-mile mark, you've decided it's time to hang up the keys and buy yourself a shiny new ride. But that leads to the big question: What to do with the clunker? Should you take the easy route and trade it in?
That depends on a few things, including the vehicle's make and model, condition, and your financial situation. But there may be better options than simply trading it in, especially if you're determined to wring every penny you can out of the deal.
Before deciding how to unload your old car, you have to find out how much the car is worth. You can order a Used Car Price Report from Consumer Reports for $12, or visit auto-pricing Web sites like www.edmunds.com and www.kbb.com to find out how much the car would fetch if you sold it yourself or traded it in to a dealer for its wholesale value. You can also check out classified ads or get an opinion from your neighborhood dealer or mechanic.
Fair-trade acts
Car-price data will tell you that by trading in your vehicle rather than selling it yourself, you may miss out on hundreds or even thousands of dollars of cash for your car. That's a pretty high cost for the convenience of having a dealer take it off your hands. And you could get even less money out of the deal if you aren't savvy about the negotiations. The key is keeping each negotiation separate. First haggle over the new-car price. Then bring up the trade-in. Salespeople like to mix these negotiations together so they have more latitude to give you a seemingly good deal on one car while making up for it on the other.
Another strategy: Visit dealerships that sell cars of the same make as your used vehicle to find out what they'd pay outright. They may offer more because they specialize in that make and have the know-how to get the car ready for a quick sale.
A private sale, however, has the potential to give you more bucks for your clunker. You can advertise online at sites like www.ebaymotors.com, www.autobytel.com, and www.autotrader.com. Listings range in cost from $29 for one month at www.carsdirect.com to $90 in total fees on eBay. Selling your own car, however, can truly be a hassle. You have to take calls from prospective buyers and give them test drives or rides to their mechanic for a full inspection.
Charity drive
Another option is donating the car to a charity and deducting its value on your tax return next April. Just make sure the charity is IRS-approved.
Charities are getting choosier about the cars they'll accept; some won't take vehicles that are missing tires or those older than about the mid-1990s. Also, tax laws may be getting stricter. The Bush administration and the U.S. House of Representatives have proposed new IRS rules requiring donors to get a qualified appraisal or some other proof of value. (At press time, approval of the law was still pending.) So you may want to check with your tax adviser before donating a vehicle.
Once you make the decision to donate, call the charity, and it will pick up your car. Just be sure to get your paperwork in order. If the car's fair market value is more than $5,000, you'll need a professional appraisal. If it's less, use the highest private-sale value from the online price services. That amount will be fine as long as the price accurately reflects the vehicle's condition and options, says Mark Luscombe, principal analyst for the tax group at CCH Inc., a provider of tax information. He advises keeping a copy of the price report, maintenance and repair records, car photos, and the charity's receipt, which should note the car's year and make, vehicle identification number, and mileage.
Junker heaven
If the vehicle is truly a hopeless heap, and even charities refuse to take it, the moment has come to say goodbye. Phone junkyards in your area and see what they'll pay. You never know--you could end up with a few hundred dollars if you negotiate. Just don't expect junkyards to pay much. And remember: You may be the one paying if the junkyard has to tow away poor Old Faithful.
Thinking about trading in Old Faithful for a shiny new model? Read this first
Now that your trusty, or not-so-trusty, car has passed the 100,000-mile mark, you've decided it's time to hang up the keys and buy yourself a shiny new ride. But that leads to the big question: What to do with the clunker? Should you take the easy route and trade it in?
That depends on a few things, including the vehicle's make and model, condition, and your financial situation. But there may be better options than simply trading it in, especially if you're determined to wring every penny you can out of the deal.
Before deciding how to unload your old car, you have to find out how much the car is worth. You can order a Used Car Price Report from Consumer Reports for $12, or visit auto-pricing Web sites like www.edmunds.com and www.kbb.com to find out how much the car would fetch if you sold it yourself or traded it in to a dealer for its wholesale value. You can also check out classified ads or get an opinion from your neighborhood dealer or mechanic.
Fair-trade acts
Car-price data will tell you that by trading in your vehicle rather than selling it yourself, you may miss out on hundreds or even thousands of dollars of cash for your car. That's a pretty high cost for the convenience of having a dealer take it off your hands. And you could get even less money out of the deal if you aren't savvy about the negotiations. The key is keeping each negotiation separate. First haggle over the new-car price. Then bring up the trade-in. Salespeople like to mix these negotiations together so they have more latitude to give you a seemingly good deal on one car while making up for it on the other.
Another strategy: Visit dealerships that sell cars of the same make as your used vehicle to find out what they'd pay outright. They may offer more because they specialize in that make and have the know-how to get the car ready for a quick sale.
A private sale, however, has the potential to give you more bucks for your clunker. You can advertise online at sites like www.ebaymotors.com, www.autobytel.com, and www.autotrader.com. Listings range in cost from $29 for one month at www.carsdirect.com to $90 in total fees on eBay. Selling your own car, however, can truly be a hassle. You have to take calls from prospective buyers and give them test drives or rides to their mechanic for a full inspection.
Charity drive
Another option is donating the car to a charity and deducting its value on your tax return next April. Just make sure the charity is IRS-approved.
Charities are getting choosier about the cars they'll accept; some won't take vehicles that are missing tires or those older than about the mid-1990s. Also, tax laws may be getting stricter. The Bush administration and the U.S. House of Representatives have proposed new IRS rules requiring donors to get a qualified appraisal or some other proof of value. (At press time, approval of the law was still pending.) So you may want to check with your tax adviser before donating a vehicle.
Once you make the decision to donate, call the charity, and it will pick up your car. Just be sure to get your paperwork in order. If the car's fair market value is more than $5,000, you'll need a professional appraisal. If it's less, use the highest private-sale value from the online price services. That amount will be fine as long as the price accurately reflects the vehicle's condition and options, says Mark Luscombe, principal analyst for the tax group at CCH Inc., a provider of tax information. He advises keeping a copy of the price report, maintenance and repair records, car photos, and the charity's receipt, which should note the car's year and make, vehicle identification number, and mileage.
Junker heaven
If the vehicle is truly a hopeless heap, and even charities refuse to take it, the moment has come to say goodbye. Phone junkyards in your area and see what they'll pay. You never know--you could end up with a few hundred dollars if you negotiate. Just don't expect junkyards to pay much. And remember: You may be the one paying if the junkyard has to tow away poor Old Faithful.
Last reviewed: April 2009
