Trade in Or Sell Privately? 5 Car Considerations That Make All the Difference
Getting a new vehicle is exciting, but what about your current car? Do you trade it into the dealership or privately sell it?
While there's no clear-cut answer, there is helpful information to arm yourself with before heading to the dealership. Dealers will take your car to trade in and put towards the price of the new one, but typically offer less than what you can likely sell it for.
Knowing when to trade in or sell could save you some cash, so here are a few things to consider, according to car experts.
Vroom Vroom: 7 New Car Models Worth Buying in 2026
Don’t Delay: Start Growing Your Net Worth With Smarter Tracking
1. Do the Math
Usually, the decision comes down to what's best for you financially. Lauren Fix, Sector Analyst and Industry Expert at The Car Coach and Car Smarts Brands, said it's important to calculate the savings on the newer vehicle before deciding to trade in.
"Trading in a $5,000 car toward a $20,000 car, you will only pay taxes on $15,000," she said. "That savings has to be more to make trade a better deal. Do your research to find out the current market value. Some of the places to sell your vehicle will have fees and that has to be calculated in, too."
Keep Financial Literacy Month going — learn how the MoneyLion app helps you track, manage and move your money in one place.
2. Pinpoint the Ideal Time To Sell or Trade In
If your current car is paid off, that's an ideal time to sell or trade in, especially if the warranties are still valid, according to Rob Dillan, automotive expert and founder of EVhype.
"If your car is debt-free, the optimal time to sell your car is usually before its factory warranties expire, which for most new car warranties is at 36,000 miles or three years and for powertrain warranties at 60,000 miles or five years," Dillan said.
"For instance, a 4-year-old car at about 40,000 miles will still command decent trade offers from dealers," he continued. "Trading in now not only ensures your car's value is maximized, but it also makes the process easier — particularly if you have paid off your ride."
3. You Can Still Trade In a Car That Is Not Paid Off
While it's not ideal for your wallet, you can trade in a car that isn't paid off. However, it will make your new car payments even bigger.
"It's essential to recognize the difference between your car's trade-in value and your remaining loan balance," said Dillan. "If you owe more than the car is worth — called negative equity — you'll need to pay that gap either out of pocket or by rolling it into your new loan."
He added, "Financial advisors say it's important to know your loan payoff balance before going to a dealership. If you owe less than what your car is worth, trading in can be an easy way to handle applying your car's worth directly to a new purchase, decreasing the amount you have to finance."
4. Take Used Car Prices Into Account
Taking note of what used cars are going for is key to getting more money for your vehicle.
"If the prices of used cars are high due to demand, you will most likely receive a better deal when selling your car privately or when trading it in," said Joe Giranda, Director of Sales and Marketing at CFR Classic. "On the other hand, if the condition of the car market is such that there are many people selling cars, then you can simply trade it in at a dealership, as that is faster than looking for a specific buyer."
5. Low Mileage Matters
According to Kelley Blue Book, the average car drives between 12,200 to 14,489 miles a year, and mileage matters when determining the value of your car.
"Never forget that the foundation of the trade-in value is built on your car's age, mileage and condition," Giranda said. "Cars that are relatively new, low on mileage and in good shape will typically always get better trade-in offers."
How To Sell Your Car Privately
If your car is paid off, has low mileage and is in good condition, it could bring in more money through a private sale.
"Listing your vehicle on platforms like Craigslist, Autotrader and Facebook Marketplace gives you access to a wider audience and potentially more money than a dealer may pay," Dillan said.
However, there is more work involved. "You have to list your car, field questions and do the legwork to sell it yourself," Dillan continued. "If you prefer to invest the time, the financial outcome can be worth it, especially for well-maintained cars with desirable features."
Ultimately, the choice is yours, but always check your car's value on Kelley Blue Book or Edmunds before selling or approaching a dealership.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
More From MoneyLion: