Trade or Sell

The age old question when getting a new vehicle at a dealer – do you trade in your existing vehicle or sell it privately. Each has their own advantages and disadvantages, so why do people go with one option over the other? Ultimately, it depends on what your priorities are and what you perceive to be the better way. Which one is better for our needs and how would we get the better outcome for us, based our current priorities?

Now that we’re looking to get a 9 passenger Suburban or Yukon XL we have been discussing which option to go with for getting rid of one of our vehicles. Keeping both the Explorer and Sedona AND get the new SUV just isn’t an option for us, so one of them will need to go to make room for the new vehicle. We still haven’t decided which vehicle will need to go in order to make room for the new family vehicle, but we’ll need to decide this in the near future. We’re likely going to buy the Yukon from a dealership so we have both options available to us. Having a family of 9 does present some logistical challenges, in that neither of us have a ton of free time to spend on selling a vehicle, so trading our existing vehicle at the dealer does seem like a good option.

With a private sale you’ll usually be able to get more money than on a trade-in, but it’s a lot more of a hassle. The trade-off is that you need to handle advertising, dealing with potential buyers and test drives. My experience with selling vehicles privately on Kijiji has not been great. It has been a mix of no-shows, haggling (which I hate) and people sending me messages, though when I respond I never hear back from them. I always end up selling the vehicle, but I often feel that it’s been more work than it was worth.

Trading in your vehicle at a dealer is A LOT less of a hassle, but you’ll also generally get less money than selling it privately. When buying a new or used vehicle at a large dealer, they will generally take the vehicle on a trade and give you a fair deal based on market value at the dealer auctions. Some of the smaller used car dealers may not want to take your vehicle in on a trade, depending on the age and condition of it. Some of the big dealers even have promotions where they will give you $2000 off of a new vehicle, even if your trade-in doesn’t run – what my local Ford dealer calls “Cash for Clunkers”. Dealerships will need to handle advertising costs to sell your vehicle and potentially repair or other costs to get it to a selling condition.

In the recent past, when I have bought a vehicle at a dealer, I’ve traded my existing vehicles in. I did this when I bought our 2014 Ford Edge and my 2016 Kia Sedona. However, before those I sold my existing vehicles privately when I bought a 2011 Chevrolet Cruze and my cherished 1998 Honda Civic. There were a few other vehicles that I had bought and sold, but they were done privately, like a 1987 Nissan Pathfinder, a 1984 Chevrolet Camaro (my first car!), 1999 Honda Accord and the 2007 Ford Freestyle.

One thing to consider when deciding whether to sell privately or trade is the tax implications. Yes, taxes; ugh. Stay with me, though. In Saskatchewan, since 2018, PST is only applied to the after trade amount, meaning that if you bought a car for $10,000 and your trade-in was worth $4000, you would only pay PST on the $6000. Whereas if you sell your car privately you would pay PST on the full $10,000, so you would need to decide if the extra money you get from the private sale offset the tax difference.

Selling privately or trading in really comes down to personal preference. My parents will ALWAYS trade-in their vehicle at the dealer but a friend of mine will ALWAYS sell their vehicle privately. Sometimes it’s about convenience, or maybe it’s about enjoying the experience of selling to someone or maybe it’s just what you’ve always done.

Do you typically sell privately or trade your vehicles in? Which option should we go with? Let me know in the comments below!