Facing the general public when selling a used car is a frightful proposition for some – especially when you can use an online buying service, drop it to a dealer or trade it in on a new vehicle, without blinking.
But is that really the wisest thing to do?
In this article we explore the pros and cons of selling privately, versus the trade-in option.
Selling a car privately means advertising it and managing the entire sales process yourself. It can be a lot of effort – and there’s more risk – but the pay-off is sometimes, but not always, more money in your pocket.
Pros of selling a car privately
- Make more money. It’s simple, really. When you trade a car into a dealer, they’re going to give you a wholesale price so they can apply their own margin come reselling time. When you’re selling a car privately, you get to keep whatever that margin might be. Sometimes, it can be a not small amount of money.
- Better for older cars. Older cars, especially those with higher mileages, are harder to sell for a dealer – but they’re easier to sell privately. As such, a dealer won’t offer you as much. It’s better to sell it privately.
- Better for niche cars. If you’ve got a quirky sports car or off-roader that has a cult following, don’t take it to a dealer who doesn’t know what it is. The beauty of the internet is giving you access to a niche market and customer for your niche ride – and making more dough.
- It’s not that much effort to sell privately. Cleaning up your car, taking photos and posting an ad online is easy. Many online advertising platforms are now designed to be as foolproof as possible, meaning you can upload from your phone in minutes.
- Kind of fun. Selling a car can be a positive experience – flexing your creative muscle taking the photos and writing the advertisement, meeting interesting members of the public (especially if you’re selling a car to a likeminded enthusiast), and making a good amount of cash from a trustworthy buyer. When selling a car privately goes well, it’s a win-win for all and restores your faith in humanity.
Cons of selling a car privately
- More risk. Scams, losing money, getting robbed or worse. We don’t want to frighten you off, but remaining street-smart – keeping paper trails of any financial transactions; documenting critical things like the buyer’s licence number – is critical when selling anything privately to the public, especially a car.
- More effort. Researching the value of your car, informing yourself on what documentation is required, managing enquiries and organising test drives, all takes time.
- Dealing with the general public. This could go either way. If you’re selling a near-new BMW or Audi with a high price, you’re probably going to have a pleasant experience. But if you’re selling an old V8 Holden Commodore ute, you might want to brace yourself for the tyre-kickers, joy-riders – and, worse, the low-ballers.
- Haggling. It’d be less awkward to simply engage in a slow waltz with the prospective buyer of your car, than go back-and-forwards over a few hundred bucks. But everybody wants to feel like they got a good deal. It’s just part of the private selling process. Just make sure you price your car with a bit of fat on top for easier haggling.
- More paperwork. When you trade in a car, you might sign a contract – that’s already been organised and printed off for you – and that’s that. When selling a car privately, the paperwork might range from preparing a simple tax invoice for you and the buyer – and submitting a notice of disposal with the relevant authorities – to having to organise a roadworthy certificate, completing a registration transfer, and a notice of disposal. Selling a car privately in Victoria, for example, requires so much paperwork you might be tempted to just drop park your car on a busy street with the windows down and keys in the ignition. (Don’t do this.)
Selling your can online is easy, you can get a price pretty quickly, you can also take it to a dealer and they will offer you a price. You might be dropping it to a used car dealer, or trading it in on a new vehicle. It’s quick, easy, convenient and simple – but comes at a cost.
Pros of selling your car online / trading your car in
- Significantly quicker and easier. You’re going to get a lower price versus selling privately, but you can consider it a fee for being able to simply drop it at the dealer and walk away. Bliss.
- More secure. Ideally, a contract means you sign away your old car – and any worries that it might come back to haunt you in the future. Selling a car privately, if the gearbox blows up a week after it’s been with its new owner, even if it’s just bad luck they might still try their luck contacting you and making it your problem.
- Don’t have to worry about minor repairs. In Victoria, Queensland and the ACT, you need to think about a roadworthy certificate when selling privately (in the ACT if the car is older than six years) – which can be painful if you get a giant list of required repairs. With a dealer, you drop it off and that’s that. The roadworthy certificate and any required repairs is their problem.
Cons of trading your car in
- Make less money. When they sell your car online or to a dealer, it will need to be priced competitively against the private market. That means they have to offer you less.
- Dealing with a dealership. You’re still ‘selling’ your car to someone, and a dealer is incentivised to get it off you as cheaply as possible. This is why we recommend trying our online buying service.
- Haggling. As with a private sale, you’re still going to need to bust out those negotiating skills when trading in. A dealer is a professional salesperson – compared to a member of the public, you’ll need to bring your A-game to avoid being dudded.
- Risk of getting ripped off. If you don’t know the value of your car, it doesn’t matter how good your negotiating skills are – a car salesperson will see you coming. It always pays to do your own research (which is the kind of person we presume you are, if you’re reading this).
There’s no right or wrong way to sell your car – it’s what works best for you. Our advice would be this. If you’re buying a brand new car – make sure you use CarExpert’s new car buying system to get the best price – and your current car is less than 10 years old with reasonable kilometres – it’s worth getting a trade-in price or using our online service to see what we would offer for your car. You might be surprised, especially if finance is involved.
If you are not satisfied, then you can compare to the hassle of selling privately.