If you’re wanting to sell your car and buy a new one, your most likely choices are advertising it for private sale or trading it in with a car dealer. Both of these options have their advantages and disadvantages. A few simple tips will, however, help you avoid unnecessary stress and maximise your sale price.
If you decide to sell your car on your own, it’s important to be aware of its key details. Preparing a brief spiel about your car’s history, including its maintenance record and perhaps your favourite things about your vehicle, will boost your chances of a quick and easy sale.
You should be prepared to answer any questions from potential buyers, as this will reassure them and help smooth over any doubts.
Put effort into a private sale to maximise price
When selling your vehicle through a private sale, it is essential to make your car look as good as you can for potential buyers. A picture is worth a thousand words, the saying goes, so put the effort in to make your car shine to increase its valuation. You can find some good instructions in our article here.
When selling privately, you will need to exercise caution and good judgement when dealing with interested buyers. They will no doubt want to take your car for a test drive, so make sure you get their contact details and identification before they drive off, in case anything goes wrong.
You will also need to make sure your vehicle insurance policy covers potential buyers. Give your insurer a call if you’re not sure.
Some people find it a nuisance to go through these steps to sell privately. They are either just too busy, or couldn’t be bothered listing their car, taking photos and having to deal with enquiries. If this sounds like you, a trade in could be a much more straightforward option.
Trade ins less hassle, but could hit your pocket
Trading your vehicle in with a car dealer will give you a simpler and more seamless selling experience. The downside, however, is that you will almost certainly make less money on the sale. As car dealerships are commercial operations and need to maximise their profit, they will usually offer you around 10-20% less than the market value of your vehicle.
To make sure you’re getting an accurate valuation from a car dealership, Consumer New Zealand recommends paying for a vehicle valuation from Redbook. This costs $20 and gives you both trade in and private sale valuations, so you can head into any private sale or trade in negotiations with confidence. It will be money well spent!
Interestingly, though, by trading your vehicle in on a deal for a new car, you actually save money on GST. The value of your trade in is taken off the price of your new car to create a final price, which is then subject to GST. This reduces the total amount you end up paying on tax.
A private sale and trade in each have their own pros and cons, which should be considered before deciding on your final approach. It’s important to assess the time and effort involved in selling privately versus a potentially lower price if you trade in.