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January 20, 2011 | Posted By: Rebecca Garland
The slowly recovering economy has motivated many people to hang on to their older cars rather than buying new ones. However, for many of those who have been so practical for so long, it’s time to do something with that old car and perhaps buy a new one.
Identify Resale Value
If you’re considering trading in or selling your older vehicle to make room for a new one, your first step will be to figure out how much you can get for it. There will be two prices on your vehicle – the one you’ll get for a trade-in at the dealership and the one you can hopefully get by selling the car outright. Selling your car outright will bring you more cash, but you’ll have to manage the sale and handle the paperwork on your own. Trading in your car to the dealership is far simpler, but you’ll pay for convenience with a reduced price. You can easily identify resale value by visiting Edmunds.com or KellyBlueBook.com.
Consider Tax Deductions
If your old clunker is truly just that – a car that isn’t in the best shape, you might consider donating it rather than trying to sell it. Depending on your tax situation, you might be able to make more for the vehicle in terms of charitable donations on your tax refund than by selling it outright. While this doesn’t make sense for late model cars, it’s a perfect solution for a car that has huge numbers of miles and is getting closer to the great junkyard in the sky. Donate your car to a reputable charity, get the tax break – possibly for a couple of years, and let those less fortunate benefit. You can learn more about the tax implications of donating your vehicle through the IRS information brochure available here.
If you’ve decided that selling your car outright is the best solution, you’re going to need to price it appropriately and then find buyers. There are not always ready buyers for vehicles, so you’ll want to give your vehicle the best shot at being purchased. Clean the car inside and out. Fix any damage to the car – but only if you’ll get your money back in resale.
Consider paying to have the car detailed including a shampoo of the carpets and a wipe down of every hard surface in the vehicle. Then start advertising your vehicle. Make sure your price is appropriate using the resale value determined above and that potential buyers can find your car. Leave a sign in the window or consider advertise the car in the online ads or in the newspaper. You can use social networking such as Facebook.com or Twitter.com to find potential buyers as well. Once your car is sold you are free and clear to buy a new one using the cash in hand as a down payment if you’d like.
Trade It In
If you’d rather trade in your vehicle, it’s a far easier process. Wash your car well and clean it out. Take it to the dealership where you’d like to find your new car and start your negotiations. Car dealers make money in a few areas of a deal, and they like to blend the numbers together to hide the real profits. Get a price for your trade-in without committing to a new purchase if possible. Assume there is some wiggle room in the trade-in value, but don’t be surprised if it’s far less than you would get doing the selling yourself. While you will save the taxes on the trade-in, you’ll lose money for convenience. You can see the value to expect from trading in your car on the Kelly Blue Book website as well. The end result, however, should be satisfaction that you did the most financially smart thing with your old junker and got a new car to boot.
Guest contributor Rebecca Garland is a veteran freelance business writer working hard to populate the internet with relevant, interesting content you can actually put to use. She writes regularly for many companies and websites such as http://carevo.com on topics ranging from social media to new car reviews, and everything in between.
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