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Should I trade my car or sell it privately?

Some people struggle with the decision whether or not to trade-in their vehicle or sell it privately. The source of this uncertainty may lie in the fact they believe they will get more for their car if they sell it themselves. In some cases this is true, depending on who the buyer is.

Basically, there are only three types of buyers for your car.

1. People you know.
2. Strangers.
3. Car Dealers.

Selling to a friend.

If you do your homework, you can get more for your car by selling to a friend or relative. By homework I mean you will need to know what other vehicles exactly like yours are actually selling for in your market.  Once you have established a price you know is fair, and assuming your friend is willing to pay it, congratulations, you have sold your car. This seems simple enough however, a major reason often cited for not wanting to sell to somebody you know is, “what if something goes wrong with the car?”

By the way, the reason you can get more by selling to somebody you know is, they know your car and they know you. They trust you not to sell them a bad vehicle. Piece of mind is worth a few extra dollars.

Selling to a stranger.

If you decide to go the route of selling to a stranger, you will also need to find out what your car is worth (retail). You then need to decide where and how to advertise it. In Edmonton, there are several excellent websites where you can list your car for free. Here are four of the most popular ones;





When you sell to a friend, you are not competing with dozens of other offers to sell a car “just like yours.” Your friend already knows they want to buy from you. (They want your car, not a strangers car.) When you are selling to a stranger, they don’t know you or your car. They are shopping for the best deal which means they are looking first at price. If you are asking less than all the other sellers of similar cars, your phone will ring. If your car is in great shape and you want a premium price, it will take a lot more work. Sometimes you may find a buyer quickly. More often than not, it can be a frustrating experience that only ends after trading at a dealership.

Selling to a Dealer.

When you trade-in your car, you are in fact selling to the Dealer. He or she will appraise your car and offer you a wholesale price. What is wholesale? This is what the dealer would have to pay for a car just like yours at a dealer auction. Hundreds of cars and trucks are sold at these auctions every week in Canada. Finance companies, banks, leasing companies, large corporations, and other dealers use these auctions.

Do dealers ever pay retail for your car when you trade it in. No, but the bill of sale may look like you are getting retail, depending on how your discount (if any) was applied to the offer to purchase. Here is a simple illustration of how that might look;

.                                            example A.                         example B.

New retail car price              43,000                                  43,000

Discount                                           0                                     2,000

Sale price                                43,000                                   41,000

Minus trade-in                       13,000                                   11,000

Total paid                                30,000                                 30,000

In example (A) the buyer is getting “retail” for their trade-in

In example (B) the buyer is getting “wholesale.”

In example (A) the amount shown for the trade is inflated by $2,000. This is what’s called “over allowance.”

In example (B) you can see the discount is shown as such, rather than just being added to the amount given for the trade-in. (As is the case in the first example.)

Which deal is better?

You may be surprised to know, many people are completely fixated on the amount shown for the trade instead of the difference they pay in the end, “total paid.”

Should you trade your car or sell it yourself?

I hope this post helps you make that decision. There are many good reasons why trading at a dealership makes sense. It is quick and easy. You don’t have to worry about any potential mechanical issues that may come up etc.

Will the dealer make money from your trade after it has been reconditioned and sold? Yes.

How much will the dealer make?

If you do decide to try selling your car yourself, give us a call or send us an email. We always have a list of people looking for specific vehicles. It is not uncommon for us to help facilitate a private deal with the intent of selling one of the parties another vehicle.

Scott Held

{ 2 comments… add one }
  • Shawn December 21, 2011, 11:47 pm

    I listed my 2006 dodge dakota on this website carsgone.com and they put it in their auto trader type book also for free and sold it.
    Thought others might like to know about this free site as well. I noticed you guys are not on there though.
    Anyway nice blog site.

  • andy May 27, 2010, 2:41 pm


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