Should you trade in or sell your used car?

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Should you trade in or sell your used car?

So, you’re buying a brand new car and you’re wondering what to do with your old one. If you’re buying new, or buying a used car from a dealership, your car salesperson will be pretty keen for you to trade in your car with them. You know that you’re almost guaranteed to get less money for your car if you trade it in rather than sell it privately. But trading in your car can be so much easier. So should you trade in or sell your used car? We’ve weighed up the options for you. 

What happens when you trade in your car?

The easiest way is to go through the salesperson you’re buying your new car from. It’s easiest because you’ll be interacting with them for the purchase anyway, and then they’ll be able to take the cash for your old car off of the price of your new car. That means: smaller sales tax, smaller loan, and less interest paid on the loan. But, if you’re committed to getting a better deal on your old car you can shop around for trade ins too.

Basically, you’ll take in your car and let the salesperson know you’re looking to trade. They’ll do a visual inspection, they’ll run your VIN (Vehicle Identification Number) through a system that checks out your vehicle history, and they’ll take down some personal information. While they’re doing the admin side of it, they’ll have a service person have a better look at your car, check out the engine, and sometimes they’ll take it for a test drive. 

Then you’ll get an offer — dealerships always pay less for cars. It’s because they’re factoring in things like repairs, cleaning, getting it ready for a new buyer, and of course, they need to make a profit. If you’re buying a car through the dealership, you’ll have a little bit more room to negotiate with the price, because it’s a bit easier to manipulate when they’re taking it off the price of a new car. 

The pros: 

  • It’s less stressful and less time consuming 
  • Your salesperson may give you a better price on your new car with a trade in
  • The condition of your car isn’t as important as they have mechanics and panel beaters relatively ‘on hand’

The cons:

  • You’re likely to get roughly 20% less back 


What happens when you sell your car privately?

There are a few different ways to sell your car privately. You’ve got your used car sites, social media, a newspaper ad, or the classic parking it on the side of the street with a sign in the windscreen. Social media and the sign in the windscreen option are definitely the most cost-effective of the bunch. 

You’ll need to get a Safety Certificate (formerly known as a Roadworthy Certificate/RWC) to legally transfer the registration of your car to someone else’s name. This can sometimes mean you’ll need a repair, a car service, or new tyres. Your mechanic will give you a full report with everything you need done to make it roadworthy. 

Throughout the selling process, you’ll need to keep the car clean and filled up with fuel in case anyone wants to inspect it. You’ll also need to be able to tell the buyer a bit about your car. Its make, model, year of manufacture, but also:

  • Has it been in hail or a flood? Any accidents?
  • What sort of driving do you do — strictly highway driving or just zipping around locally?
  • How many owners has the car had?
  • How many Ks on the odometer?
  • If the kilometres are high for the age of the car, why?

Once you’ve found your buyer, there’ll be paperwork and transfer forms. These vary from state to state but you can usually find them through the Department of Transport’s website. 

The pros: 

  • You should get roughly 20% more cash 

The cons:

  • Depending on the condition of your car, the repairs you need to make along with getting a roadworthy certificate might mean you pocket less
  • Cars can sometimes be difficult to sell and that can result in you lowering your asking price
  • Preparing your car, advertising it, and arranging for buyers to inspect it can take up a bit of time if it takes a while to sell



It basically comes down to money over convenience. Trading in your car is definitely the more convenient route, but if you’re after more cash for your car and have the time — then selling it privately might be better for you.