Buying the right car for you has a lot to do with selling your current one. Therefore, an important question to ask yourself is “how much will I get if I sell my car for cash vs trading it in?” If you are looking for a newer car, trading your car in might be the way to go; since you could receive value towards a new car at a dealership. If you are looking to get a used car from a private seller, you might be better off selling it on Craigslist for blue book price. That way, you can throw the extra cash towards your new investment.
Or you can put that extra cash towards the downpayment on a new car. Regardless of your decision, the journey towards buying the right car for you all starts with selling your current one.
Selling My Car For Cash
When it comes to selling your car for cash, the internet has made it an easier process. In 2016, websites like Craigslist are by far the most effective way to get your car out there. More people can see it, and you can put up an advertisement for as long as you want. But, one thing that might throw a screw in your ball-pit is if you have a brand nobody wants.
Look around you when you are driving next time; what are the most popular cars you see? Chances are, they’re going to be Fords, Chevys, Toyotas, Hondas, or any other well-known brand name. Because of the infinite popularity contest between these brands, if you have an obscure or outdated model, like an older Saturn, people probably won’t give your vehicle the time of day. Also, even though gas prices are finally going down, chances are people aren’t going to want older trucks, Hummers, or any other type of gas guzzler you can think of.
While selling your car privately is certainly the more profitable option upfront, you need to take what the consumer is looking for into consideration.
Trading It In
Dealers will be more than happy to take in your current car. They don’t care if it’s rusted, has chipped paint, a little skip in the engine, or doesn’t even run. Most of the time, the dealer will take your car for a trade in value. While the trade in value might be less than what Kelley Blue Book says it is, it’s profitable if you decide to purchase a car from the dealer you are trading it in at.
Trading in a car is a great option if you want to buy from that specific dealer, because they will give you a discount towards the car you are going to purchase with them. Here’s the profitable part; this “discount” off your car would be valued much more as opposed to just trading your car in without buying from them. Why? Because you aren’t the only one winning in this situation, the dealer is, too. They’re able to get a car that can be turned around for profit, while simultaneously making a sale on another car
Even if it is at a discounted price, a sale is still a sale for them, and they aren’t losing out financially, but actually gaining another financial opportunity. Therefore, don’t ignore this as an option; especially if you are looking at getting car from a dealer.
The Right Price: Buying Smart, Not Expensive
Which is where finding the right car for you starts to come in; because it’s a smart deal. You are buying smart by trading in your old car for your new one, and therefore getting a discount. This means less money out of your own pocket, and more money towards a bigger down payment. Which will help keep your loans lower over the coming months.
Even if you are trading in a great vehicle and get a killer discount, or have 4k from selling your car online, that doesn’t mean you can go from looking at Hondas to BMWs or Porches; buy smart, not expensive. If a Honda is what you can afford right now, then go with that. My point is, understand your limitations, and then shop for something lower than them.
Assessing Your Needs
Because after you get rid of your old car, it’s time to think about what “buying the right car for you” actually means. Do you really need that Ram 3500 with 31k+ towing capacity just because you can afford it; or do you just want it for bragging rights? If the answer to that question is “I just want it for bragging rights,” then look elsewhere. Don’t buy the expensive Ram 3500, instead go for that Chevy Silverado sitting next to it with four-wheel drive for 10k less, and set that extra 10k you would have spent on the new Ram to put aside for the loan and emergency repairs.
Even if you understand the importance of buying smart, you still need to assess your needs. After selling your car, this is the next most important step when it comes to finding a new one. Take into consideration how much you drive every day (maybe you need a car with the best fuel economy out there) and any other factors that might affect your driving experience. For example, you might have a larger family. This means a smaller coupe-like car is out of the question. You’d be better off finding a decent minivan or suburban that has plenty of room for kids and groceries.
This step is quite simple really, and you will be surprised how quickly you narrow your options down if you assess your needs. Narrowing down your choices means finding that perfect car quicker. After you’ve assessed your needs, it’s time to decide between new or used.
New vs. Used
The next major step is figuring out if you are more suited for a new or used car. Both options are perfectly valid, and each one has pros and cons. But, what’s important is the pros and cons for you. Maybe payment plans aren’t your thing, and you are handy with tools. In that case, take half of that 4k you made on your old car and grab another beater you can fix up, and keep going for 3 or 4 years with the other half of the cash you made selling your car. Another option is grabbing a CPO vehicle, these Certified Preowned vehicles are good if you need a cheaper, but still reliable and in new-like condition, car. It brings the best of both worlds from the new car market and used car market, and slaps them together with warranties for peace of mind.
Or, if you can’t afford to pay for a used car all at once, grab a new car with the help of a loan. Take that financial opportunity provided from selling your old car and use it for a bigger downpayment, and you will be in good shape for paying the rest of your loan off. When looking at new cars, your options narrow even more. Now, you need to decide if you want to lease or buy a new car.
Buying a new car means after it’s paid off, it’s yours. You own it, and you can do whatever you want with it. Leasing a new car means you can drive a much more expensive car for less money, and then trade it in every few years for a new model as long as you adhere to the requirements.
While leasing might not be as “smart” as outright buying a lower-priced car, it’s still an option to think about if you can afford it. After all, as long as you are buying smart and can afford the lease for a newer car (and keep the miles low) then that might be what’s right for you, because you will have the guarantee of a new car just as your current leased one is losing the new-car feeling.
Simple Enough, Right?
Finding the right car isn’t a complicated process, and doesn’t mean buying your favorite and most expensive car; it means being smart and thinking about what you need out of a car. Before you sell your old car, ask yourself what you really need this new car for. You might find that you don’t need to sell it at all. But, if you do, then think about things like your finances, family, hobbies, commute, and job. Doing this will narrow down your search, and you will find that it becomes much easier to rule out cars. After you’ve figured out what type of car you need, figure out if you want to buy new or used. Then, decide the most profitable way to get rid of your old car; selling it for cash privately, or trading it in towards the price of a new car?
My point is, as long as you shop smart and think about what you need your car for, you will end up buying the right car for you in the end. Don’t be surprised if you trade in the same car you’ve had for years towards a newer version of that model. After all, there’s a reason you might have kept it for so long.