Guide
Private sale, trade-in or instant offer
What separates these three is mostly how much of the work you do, and the money tends to follows that. What nobody can tell you is the size of the gap on your car, because it is a fact about your car and your state.
Sell it yourself
- Money
- Most money
- Time
- Weeks of your attention
Instant offer
- Money
- In between
- Time
- A day or two
Trade it in
- Money
- Least, usually
- Time
- An afternoon
Why there is a gap
Where a dealer’s number comes from.
A dealer prices what the car is worth to them, after reconditioning and the time it sits on their lot. Knowing that is what stops a quote feeling like an insult and tells you when it is a fair deal.
When a dealer takes your car, they are buying stock. Before it can be sold it usually needs inspecting, cleaning properly, minor work, and in some cases a warranty. It then sits on a lot costing money until somebody buys it, and it might not be the kind of car that sells on that lot at all. Their offer is the retail price minus all of that, minus the margin that makes the business work, minus the risk that they have misjudged it.
An instant online buyer runs the same calculation with different costs. They have no showroom and enormous volume, so the reconditioning is cheaper and the risk is spread, and their offer usually lands somewhere above a trade-in and below a private sale.
A private buyer has none of those costs. They are not reselling the car, so nothing has to be taken off for the next transaction, which is the entire reason the private number is the highest available. What you pay for it is doing the reconditioning, the advertising and the risk assessment yourself.
The three
What each one costs you.
Money is only one of the columns, and for a lot of people it is not the one that decides.
Selling it yourself
The most money available, and the most of your time. Photographs, a description, the messages, the people who do not turn up, the meeting, the payment and the paperwork. Somewhere between a weekend of work and a month of low level admin, depending on the car and the price.
Trading it in
The least money, usually, and the least friction: you arrive with one car and leave with another on the same day. In some states the trade-in also reduces the sales tax on the new car, which is a genuine saving and is the part most comparisons leave out.
An instant offer
Between the two on money and close to a trade-in on effort. You describe the car, get a quote, they inspect it, and they pay. The certainty is what you are buying, and the quote is not binding until the inspection, which is worth remembering before planning around it.
The arithmetic
Four numbers to put side by side.
Getting them takes an afternoon and costs nothing, and seeing them together is usually what settles the question.
1. What it would sell for privately
Not what a tool says in isolation: what comparable cars near you are actually being sold for, adjusted honestly for condition. The method is in how to price a used car, and doing it first is what makes the other three numbers mean anything.
2. The best instant offer you can get
Free, and it takes minutes. Get more than one if you can be bothered, because they differ. This is your floor: the money available with no work and no strangers.
3. The trade-in number, plus any tax credit
The offer itself, and then whatever your state does about sales tax on a trade. Where that credit exists it can be worth a meaningful amount on a new car, and leaving it out of the comparison makes the trade-in look worse than it is.
4. What your time is worth to you
Not a philosophical question. Take the private number, subtract the best of the other two, and divide by the hours the private sale will take. That is the wage you are being offered to do it yourself, and people answer it very differently.
If the gap comes out large, sell it yourself. If it comes out small, take the certain money and spend the weekend on something else. The number that makes this decision is different for a three year old truck and a twelve year old sedan, which is exactly why no article can tell you what it is.
The tax part
The sales tax credit, where your state offers one.
Where it applies, it is real money and it moves the decision. Where it does not, assuming it does is an expensive mistake.
In a number of states, trading a car in against another purchase means you pay sales tax only on the difference between the two, rather than on the full price of the car you are buying. On a substantial new car that can be worth a great deal, and it is credited to you whatever the trade-in offer itself is.
Other states give no credit at all, and a few have their own variations with caps or conditions. It depends on where the car is being registered, not on where the dealer is or where you bought the old car.
So the honest version of the comparison is: find out what your own state does before you treat the trade-in number as final. The place to ask is your state’s tax or motor vehicle authority, and the dealer will also know, though they have an interest in the answer. It is a five minute question and it can be the largest single line in this entire calculation.
When each one wins
What kind of car points which way.
Sell it yourself when
The car is worth enough that a percentage of it is real money, it runs and drives well, the title is clean and in your name, and it is the kind of car ordinary people buy. A well kept, well documented example is worth the most privately, because the documentation is worth nothing to a dealer and a lot to a person.
Take the instant offer when
You need the money or the space by a date, the car is ordinary enough that the gap is modest, or you simply do not want strangers at your home and meetings in your calendar. It is a legitimate choice and it is often the correct one.
Trade it in when
You are buying another car anyway, the tax credit applies where you live, and the convenience of one transaction is worth something to you. It is also the right answer when the car has problems you would otherwise have to explain to every caller.
Do not sell it yourself when
It does not run, the title is not clean or not in your name, it is worth a few hundred dollars, or you would be selling it in a market with no buyers nearby. In those cases the private premium is small and the work is the same or worse.
Read next
If you decided to do it yourself.
The rest of the process, in the order it happens.
The whole process, in order: how to sell a car privately.
How to sell a leased car
You cannot sell a car you do not own, so a lease sale is really a buyout followed by a sale. How the numbers work, and why your lender may not allow it.
How to sell a car that does not run
A car that will not start still has three kinds of buyer and a real price. What to find out first, what to disclose, and how the handover works without a test drive.
What it costs to list a car for sale
What the main places actually charge a private seller, read off their own pages and dated, and why the headline listing fee is rarely the number that matters.
Frequently asked questions
Do you get more money selling a car privately or trading it in?
Privately, in most cases, because a dealer has to buy at a price that leaves room for reconditioning, a warranty in some cases and their margin. How much more depends on the car, and the only way to know for yours is to get a trade-in quote and an instant offer and compare both against what similar cars near you are selling for.
Is a trade-in worth it for the tax saving?
In some states you only pay sales tax on the difference between the new car and the trade-in, which is a real saving and can narrow the gap considerably. Other states give no such credit. It depends entirely on where you register the car, so it is worth confirming with your own state before treating it as part of the math.
Are instant online offers legitimate?
They are, and they are useful even if you do not accept one. The quote is based on what you tell them and is subject to an inspection, so treat the first number as a starting point rather than a promise. What it gives you for free is a firm idea of the floor: the amount you can have with no meetings and no listing.
When is a private sale not worth the trouble?
When the gap is small relative to the work. On a car worth a few hundred dollars, on one that does not run, on one whose title is not clean or not in your name, and on anything you would have to explain at length to every caller, the fast route is often the right one and nobody should feel talked out of it.
Can I get a trade-in quote without buying a car from that dealer?
You can ask, and many will give you one, though the number is usually better when it is part of a deal they want. A standalone offer from a dealer or an online buyer is the cleaner comparison anyway, because it is a price for your car rather than a number blended into the price of a different one.
If you go the private route.
One page for the car, with the specification from the VIN, your photographs and your price. 10 days free.