When it comes time to change your car, we are systematically faced with a dilemma: whether to sell our car to the dealership or to a private individual. In most cases, the dealership offering to buy the car tends to offer a lower price than the market value. The trade-in value is often disappointing, leading to the belief that the dealership is trying to cheat us.
So, why would it be a good option to sell your vehicle to the dealership rather than finding a buyer yourself?
Selling Your Car to the Dealership: What Are the Advantages?
Less Cost and Time
Selling your car yourself involves costs that need to be covered and time that needs to be invested. First, you need to have the vehicle inspected, clean it, address any aesthetic and mechanical defects, and then advertise it. Not to mention all the time you will spend each time a potential buyer comes to test drive it.
Down Payment on Your New Car
Exchanging your vehicle allows you to instantly reduce the price of your new car. The trade-in value is applied to the price before taxes are added to the cost of your new car. The amount obtained for your old vehicle will be considered as a cash discount on the purchase and will therefore be applied after the tax calculation.
For example, if you have a vehicle worth $5,000, and the dealership gives you $3,000 for it, and your new car costs $20,000, the taxes will be calculated on $17,000, and the final price with taxes will be $19,545. Conversely, without a trade-in vehicle, the final price would be $22,995 including taxes. If you sell your vehicle and give the $5,000 to the dealership, the final price of your next car is $17,995. You will have saved $450 in taxes, and you will not have to pay for repairs or other expenses related to the sale of your used car.
It's important to understand that the value offered by the dealership will always be lower because they will have to resell the car and, in the vast majority of cases, the dealership will also have to bear the cost of repairs. That small scratch or minor break may not seem so serious to you, but for the dealer, it must be corrected before the vehicle is put up for sale. The profit margin that seems so large to you will thus be eaten away by all the repairs that need to be done
