Should I Sell My Car To a Dealership Or Privately?
Should I Sell My Car To a Dealership Or Privately?
Posted on June 22, 2023
When it comes time to part ways with your faithful car, which should you choose? Sell it to a dealership or sell it privately? The answer used to be so simple. If you needed maximum value, you sold privately. If you wanted an easy transaction, you sold to a dealership.
The decision is much easier now thanks to dealerships offering closer to market value for cars. That means there are fewer reasons than ever before to sell privately. But whether or not you sell to a dealership or privately also depends on your goals.
The Advantages of Selling Your Car to a Dealership
Whether you’re part exchanging as part of an auto loan and new car purchase or just want to sell your car, most dealerships will buy. As long as the car is in good condition and everything is in order, you’ll get your sale.
The advantages of selling your car to a dealership include:
Safe space: Dealerships are safe spaces full of professionals. No haggling on the driveway, no tire kickers wanting to scope out your car, no having to prepare the ad or take dozens of pictures either.
Fair prices: Not that long ago, selling to a dealership meant taking a hit on the price they paid. Those days are gone. The strength of the used car market is such that dealers have to pay much higher prices for good quality cars than before.
Simple transaction: Bring the car in, have it inspected, negotiate the offer, and sell the car. It’s simple, painless, and can be done in under an hour.
Can trade-in as a down payment: If you’re selling or trading in, you can use the value against a new car. You can do both at the same time and drive in with one car and out with another.
The Advantages of Selling Your Car Privately
There are still advantages to selling your car privately.
Separate transaction than buying the car: If you trade in your old car while buying a new one, some dealers will combine the two so you think you’re getting a better deal than you are.
Sell modified cars: If you have upgraded or modified your car in any way, selling privately is still best. Dealers don’t like modified cars and will often not purchase or not offer a good price.
Get top price: While dealerships offer better prices than before, they still need to make a profit. So, while they will offer more, private market prices still offer a little extra.
Sell rare or vintage cars: The same applies to rare, rebuilt, or vintage cars. Most dealerships won’t be accurately able to price them or resell them once bought so selling privately is still your best option here.
Risks of Selling Your Car Privately
The vast majority of private car sales are safe, seamless experiences with no risk and no negative outcomes. However, enough private sales go wrong to make it worth highlighting the risks you might face when selling your car. We asked our auto loans team to outline a few of the risks of selling a car privately.
Test pilots and tire kickers: Tire kickers aren’t usually a risk, more a waste of time. But if they use the viewing as an excuse to scope out your property, that’s a different story altogether.
Test pilots on the other hand, can be a risk. If you’re selling a performance or sports car, they are just there to spend an hour driving your car. Perhaps without the skill or experience to handle the power.
Strangers around your home: The majority of tire kickers are just bored and want a little entertainment at your expense. Some are there for more nefarious reasons. To scope out your property, to see what you have in your garage, to look at what security you have around your yard or home.
We might be a sociable nation but we don’t want strangers poking their noses into our business or our home. Especially if they are there for reasons other than buying the car!
Carjacking or theft: Carjackings during test drives are more common in the US than in Canada but they do happen. That’s why we often recommend taking the keys with you when you switch seats during a test drive.
We also suggest having a friend follow you during the test drive if you’re selling a valuable or desirable car. While the chances of it happening are low, it can still happen so you should mitigate against it.
Payment scams during car sales: There are multiple types of payment scams related to car sales. Fake cheques, fake bankers’ cheques, PayPal money reversals, Western Union scams, credit card scams, fake cash, and numerous other risks have to be mitigated against when selling anything.
The safest method of payment right now is bank transfer. You could use a banker’s cheque but would need to go to the buyer’s bank and watch them draw the cheque. The they would need to follow you to deposit it to make sure they are protected too.
Otherwise, using a bank transfer without handing over the keys until you receive cleared funds is the safest way to avoid payment scams.
In all other situations, it makes sense to sell to a dealership. Especially as the price you’ll get is much closer than ever before!
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