5 Questions to Ask Before You Sell Your Car

Emily Guy Birken — Wed, 30 Mar 2016 10:30:08 +0000

Selling your car in order to upgrade to a new one can be a difficult decision. We emotionally connect with our cars, which can make it difficult to determine if our selling and buying decisions are rational. It can also be tough to figure out whether an older car is worth repairing or if it needs to be put out to pasture.

All in all, deciding whether to sell your current car requires careful thought. Here are five questions you need to answer before you decide to sell your car:

1. Why Do You Want to Sell It?

Depending on your answer to this question, you can often easily figure out if keeping your car is really the best option.

For instance, I tend to go through a bad case of new car lust nearly once a year. This is often triggered by seeing a friend's new car or a particularly well-crafted ad campaign, but sometimes I dream of a new set of wheels because my current car is disappointing me in some way.

If I'm disappointed in my car because it's just not a shiny new thing anymore, I know I can ignore my desire for a newer model. But if I'm irritated by consistent needs for repairs and increased maintenance due to the age of my car, then my yearn for a new car might actually be the better financial choice.

It can be tough to determine if it is worth putting repair money into an older car. Thankfully, in the age of the Internet, you can learn how long to reasonably expect your car to last once it hits the needing-regular-repair age range. Doing research on the make, model, and year can tell you when to expect your particular vehicle to become too expensive to own, and how much more life you can anticipate out of driving it.

2. How Much Is Your Car Worth?

While this may seem like a straightforward question that can be answered by looking up the car's Kelley Blue Book value, there is more to it than that for many car owners. The dollar amount that you will receive by selling your car is not the only way of measuring your car's value.

When considering what your car is worth to you, think about the value of not relying on public transportation, how much being free of a car payment is worth, and how much you love your ride.

Considering the subjective nature of these kinds of metrics are, it is important to think through these values before deciding to sell your car.

3. How Will You Sell Your Car?

Selling a car can be stressful. Between gathering the paperwork detailing the car's repair and maintenance history, cleaning the car to make it look desirable, setting aside time for dealing with potential buyers, and fielding negotiation techniques, selling a car via private party can feel like less fun than a trip to the dentist.

However, trading your car in at the dealership is not necessarily the best financial choice, since that is where you will likely get the worst possible price.

If you do not want to deal with the work necessary to sell your car yourself, make sure you know how much you will be giving up by selling to a dealer or trading the car in rather than selling it private party. It may still be worth it to you to avoid the Craigslist headaches, but it's important to go into your car sale knowing exactly how much the convenience of a trade-in will cost you.

4. Are Your Expectations for a New Car Reasonable?

Several years ago, while in the market for a new (to me) car, I lamented the fact that I could not seem to find a decent used car for less than $6,000, with under 80,000 miles, that got 30 miles per gallon.

In short, I was in La La Land, because such a car has never existed — at least not in my lifetime.

Make sure that your expectations for your new car are reasonable. For instance, if you are hoping to buy a car that will be able to haul your whole extended family and save you money at the pump, you are destined to be disappointed. Recognize what is possible in your new ride and what is just wishful thinking.

Realizing that everything you want cannot be found in a single car can often be enough for you to decide that you're happy with your current car.

5. What Costs Are Associated With Your Upgrade?

It can be easy to forget the additional costs you face when you sell your old car and buy a new one. Upgrading your car will often mean higher insurance premiums, as well as state and local taxes, state licensing fees, and any finance charges you will be paying. A purchase that looks affordable in theory can quickly become overwhelming if you forget to factor in these costs.

What steps do you follow when you are planning to sell your car?

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: