trade in http://www.wisebread.com/taxonomy/term/11015/all en-US Skip the Trade-In: Why You Should Sell Your Car Privately http://www.wisebread.com/skip-the-trade-in-why-you-should-sell-your-car-privately <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/skip-the-trade-in-why-you-should-sell-your-car-privately" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/used_car_dealership.jpg" alt="Used car dealership" title="Used car dealership" class="imagecache imagecache-250w" width="250" height="122" /></a> </div> </div> </div> <p>When it&rsquo;s time to get a different car or upgrade to a later model, people get excited. Blame it on the fumes from that new car smell, but it&rsquo;s at these moments when we lose a little of our money mojo and tend to gravitate toward the quickest and most convenient ways to dispense with our old wheels. Entire chain-store auto dealerships have evolved from car buyers who want to be anything but a car seller. (See also:&nbsp;<a href="http://www.wisebread.com/guide-to-buying-a-used-car-without-going-crazy">Guide to Buying a Used Car Without Going Crazy</a>)</p> <p>The markup those dealerships enjoy once they&rsquo;ve taken down your fuzzy dice and done a bit of spit-shining and maintenance averages between 25-45% depending on the dealership and model, according to industry sources like <a href="http://edmunds.com">Edmunds.com</a>. If you&rsquo;re up for some broader reading on the topic of how auto dealerships really work, check out Phillip Reed&rsquo;s classic series of articles from 2001 (and updated in 2009), <a href="http://www.edmunds.com/car-buying/confessions-of-a-car-salesman.html">Confessions of a Car Salesman</a>. Reed is Senior Consumer Advice Editor for Edmunds.com and went undercover as a car salesman to get the scoop on how dealerships maximize profits. It&rsquo;s interesting and educational reading &mdash; hovering somewhere between an expose and an indictment.</p> <p>So why do we do it? Why do consumers rush to trade-in what they&rsquo;ve worked so hard to afford? Why do normally financially savvy folks go cross-eyed at the prospect of cleaning, advertising, and selling their own used car privately? I think it&rsquo;s a combination of intimidation (about the work involved and about smart selling strategies) and fear (about meeting with buyers and negotiating the best price). But there are some very real advantages that come from selling a car privately that shouldn&rsquo;t be taken lightly or dismissed with a wave of the hand and an &ldquo;it all evens out in the end&rdquo; rationale.</p> <h3>1. You Remove the Middle Man</h3> <p>Removing the middle man from the transaction preserves an entire layer of profit. Now, I don&rsquo;t have a beef with used car dealerships, but they are in business to make money and they can only do that in two ways:</p> <ol> <li>By giving you less money on your trade-in.</li> <li>Getting you to pay them more for a new car.</li> </ol> <p>The most successful dealerships do both at the same time and even sweeten their pots a little by handling the financing themselves (I call this the trifecta of bad consumer deals).</p> <h3>2. You Can Make Up for Not Getting the Trade-In&nbsp;Tax Break</h3> <p>Granted, in most states there are <a href="http://www.wisebread.com/16-great-tax-deductions-you-may-have-overlooked">tax advantages</a> to trading in your car at the dealership (in these states, you pay sales tax only on the difference between the value of your trade in and the price of the new car, rather than the total price of the new car). But if your car is in reasonable condition, reliable, and cleans up well, the tax advantage can be more than compensated for with the higher private sale price.</p> <h3>3. More Money Now Means Less Financing Later</h3> <p>Selling privately puts cash in your hands now, and that cash can be used to reduce the amount financing needed for a new car. Sure the sales tax benefit is nice if it applies, but that sales tax is probably going to just be financed anyway, so why not sell privately, apply a larger down payment, and finance the bare minimum?</p> <h3>4. Selling Your Own Car Builds Confidence</h3> <p>Sure, it sounds a little hippy-dippy, but it&rsquo;s worth mentioning anyway. How many times in our lives do we really have an opportunity to make a deal with another person one-on-one &mdash; no broker, no banker, no candlestick maker? I think there&rsquo;s some value in good old-fashioned face-to-face deal-making. It helps teach salesmanship, the value of research, marketing, communication, and <a href="http://www.wisebread.com/the-7-laws-of-negotiation">negotiation</a>. Especially for younger folks, those lessons can be applied in countless ways to many other larger transactions in life.</p> <p>When we trade-in our cars or sell directly to auto emporiums, we&rsquo;re really outsourcing a job that&rsquo;s not that difficult to do ourselves, and the only reward we get in return is convenience. Sure, there are some situations when trading in a car makes sense, but in most cases, sellers come out ahead when we handle the sale ourselves and can reap the benefits of a higher sale price. If you&rsquo;d like to learn more about selling your car privately check out this <a href="http://www.wikihow.com/Sell-Your-Car-Privately">step-by-step guide</a>. All it takes is a little confidence, some <a href="http://www.wisebread.com/20-great-frugal-skills-and-how-to-get-them">basic marketing skills</a>, and really good wash and wax job.</p> <p><em>Have you sold a car privately or been taken for a ride on a trade-in? What advice would you give to first-time car sellers?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/skip-the-trade-in-why-you-should-sell-your-car-privately">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/remove-car-dents-quickly-and-cheaply">Remove Car Dents Quickly and Cheaply</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-why-you-should-never-buy-a-new-car">3 Reasons Why You Should Never Buy a New Car</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-easy-diy-car-repairs-to-save-big">8 Easy DIY Car Repairs to Save Big</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-buy-a-used-car-without-getting-ripped-off">How to Buy a Used Car Without Getting Ripped Off</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/removing-car-scratches-the-revenge-of-the-frugal-body-shop">Removing Car Scratches: The Revenge of the Frugal Body Shop</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Cars and Transportation DIY sell your stuff trade in used cars Tue, 27 Nov 2012 10:36:35 +0000 Kentin Waits 955569 at http://www.wisebread.com "Cash for clunkers" bill passed by Congress - what does it mean for consumers? http://www.wisebread.com/cash-for-clunkers-bill-passed-by-congress-what-does-it-mean-for-consumers <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/cash-for-clunkers-bill-passed-by-congress-what-does-it-mean-for-consumers" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/junkcar_0.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="333" /></a> </div> </div> </div> <p>A few months ago I wrote about <a href="http://www.wisebread.com/will-these-car-buying-incentives-get-you-to-buy-a-new-car">several car buying incentives</a> that were floating around.&nbsp; This was before the bankruptcy of Chrysler and GM and there was a rumor going around that the government would push consumers into buying new cars with a trade in program.&nbsp; Now it is official that a &quot;cash for clunkers&quot; bill has passed by both the Senate and the House.&nbsp; This $1 billion program was attached to the <a href="http://online.wsj.com/article/SB124535628417528733.html">$106 billion war spending bill</a> and offers vouchers to consumers who trade in their gas guzzlers.&nbsp; Here are some details on the program.</p> <p>First, the cars eligible for trade in must be built in 1984 or later and get no more than 18 miles per gallon according to the Environmental Protection Agency's combined city-highway rating of a given model.&nbsp; You can find out the mileage per gallon of your car at <a href="http://fueleconomy.gov">http://www.fueleconomy.gov.</a>&nbsp; The cars also have to be have been owned and insured by the purchaser for at least a&nbsp; year.&nbsp; I guess this is to avoid potential abuse where someone could purchase a piece of junk for a few hundred bucks and trade it in for much more money.&nbsp; </p> <p>A consumer who trade in a car would&nbsp; receive at least a $3,500 voucher towards a car that gets at least 22 miles per gallon, and if the new vehicle gets more than 10 miles per gallon than the old car the voucher value would increase to $4,500.&nbsp; For small trucks and minivans that get at least 18 miles per gallon a consumer would receive a $3,500 voucher for a trade in that gets two more miles per gallon, and a $4,500 voucher for a trade in that gets five more miles per gallon.&nbsp; For a large truck that gets at least 15 miles per gallon a $3500 voucher would be issued for a trade in that gets at least one mile more per gallon, and a $4500 voucher would be awarded for a trade in that gets at least two miles more per gallon.&nbsp; The new cars must be priced at $45,000 or less, and both domestic and import brands are eligible.&nbsp; </p> <p>The &quot;clunkers&quot; that are turned in by the consumers would be scrapped, so there is no trade in value other than the voucher itself.&nbsp; Therefore it would not make sense to turn in cars that are worth more than the voucher under this program.&nbsp; The $1 billion currently legislated is projected to last until September and the program is supposed to start sometime around August after the president gives final approval.&nbsp; The program is designed to last an entire year from the date of its enactment, but more funds for the program are yet to be found.&nbsp; It is possible that consumers may not have a very long time to take advantage of the program.</p> <p>Obviously, car dealers have&nbsp; a reason to celebrate this new development because it is expected that it will lead to a lot of new car sales, but some are skeptical about the wisdom of this decision since it is another taxpayer funded program that seems to be bailing out a particular industry. &nbsp; Critics also say that the small amount of mileage increases required would not help the environment very much.&nbsp; What do you think?&nbsp; Do you have a clunker that you could trade in?&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/xin-lu">Xin Lu</a> of <a href="http://www.wisebread.com/cash-for-clunkers-bill-passed-by-congress-what-does-it-mean-for-consumers">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/five-reasons-why-i-love-public-transportation">Five Reasons Why I Love Public Transportation</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/save-more-gas-by-safely-following-trucks">Save More Gas by Safely Following Trucks</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-should-donate-a-blood-sucking-timeshare">Why You Should Donate a Blood Sucking Timeshare</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/you-should-make-these-11-easy-donations-before-time-runs-out">You Should Make These 11 Easy Donations Before Time Runs Out</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/do-these-5-car-maintenance-tasks-and-keep-your-car-on-the-road-forever">Do These 5 Car Maintenance Tasks and Keep Your Car on the Road Forever</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living Cars and Transportation Taxes bailout Cars clunkers law taxes trade in Fri, 19 Jun 2009 07:09:50 +0000 Xin Lu 3283 at http://www.wisebread.com