You spent a couple of wonderful years in your beloved car. It was an interesting ride, packed with ups and downs. But all of a sudden, you feel the itch and you know that it's time. It's time to get your car upgraded.
It's easy to find your next car, so long as you know what you want. What gets a lot of people stuck is what do you have to do with your old car? Will you trade-in or sell it on your own at the dealer?
Ask around and thoughts are divided. Each choice has its merits and it generally depends on the needs of a person. So let's take a look at these choices' advantages and drawbacks, key points to remember and what you should do.
Sell your car
There are plenty of options to sell your car. Via consignment, you can either sell your vehicle, sell it to a car dealer or to a direct buyer. These strategies have their own pros and cons, and depending on the particular needs, preferences vary.
You can sell to a direct buyer if you are not in a rush, as you are likely to get the best price for your old vehicle. You should consider selling by consignment if you're looking for good value and convenience.
On an online car marketplace can even put it up for sale. As it provides the most value and ease, this form of selling your car has been gaining popularity.
Advantages
As compared to trading in your car, when you sell your car privately, you are more likely to get a higher figure. You have complete leverage and you can even wait for a better bid, one that you'll be happy with if your situation permits.
Disadvantages
The whole process of selling cars is no easy feat. A lot of patience and hard work is needed. It's very time-consuming and tiring to negotiate with prospective customers or to go from dealer to dealer to get a quote. The process will take months to complete in several cases.
And this is just the tip of the iceberg. There's haggling and bargaining, fear of being scammed, loads of paperwork, and the business and COE rates are still at the mercy of you.
If you can not sell your car in time before getting your new car, another problem may arise. The monthly repayments will always be there but every month you still have 2 bills to pay!
Trade-in your car
You can look to trade-in your old car if you're looking for an affordable and easy way to get rid of your car.
When you get your new car from them, most car dealers encourage you to trade-in your old car. This choice is as simple as its name suggests and you will be able to use your old car's trade-in value to offset your purchase of a new car.
There is also a trend where dealers provide your used car with a higher trade-in value so that you can tide over the significant down payment amounts. Overtrading is known as this practice.
Here's an example to help you understand how overtrading works.
A $100,000 new car needs a downpayment of at least $40,000. The seller would increase the car price to $110,000 in overtrade, and at the same time offer $10,000 more than what the trade-in vehicle is worth.
While the buyer has to put down $44,000 in downpayment now, from his trade-in, he will now have an extra $10,000 more, making his downpayment only $34,000.
Advantages
You'll do so at the same dealership as purchasing your new vehicle when you trade-in your car. At only 1 venue, the 'buy and sell' phase occurs. You can complete your trade-in almost instantly, unlike selling your car, which takes weeks to complete and wastes a lot of time. So it's a lot more effective and comfortable.
The trade-in method is hassle-free and everything is done for you by the dealer. You don't have to think about one thing, from the stacks of papers to fixing any minor defects.
The immediate gain you earn is an extra plus point to trade-in your vehicle. To cover your new car's price, you can use the trade-in value, which will make the downpayment lower. This immediate gain is very attractive to many drivers because of Singapore's expensive car market.
Another profit that appeals to many is the practice of overtrading. The activity, as mentioned earlier, helps lower your downpayment number, making it a little easier to get a new car.
Disadvantages
Nothing is free in life. In order to reap all these perks, there's a price you have to pay and it typically comes bundled as a lower valuation.
Your trade-in value is typically lower than when you privately sell your car. It will almost certainly be smaller than what your car really deserves.
The rivalry is scarce as dealers typically source just a handful of quotes. It's doubtful that you would get a market value quote for your old trip, with so little competition. In addition, the dealership would take a bite out of your trade-in value as brokerage fees if you trade-in your car at an approved dealer.
What should you do?
It just depends on what you value most. Many would say that income, even more so in expensive Singapore, is more important. When you buy a new car, the more you get by selling your car, the cheaper it would be.
But comfort and productivity should not be ignored because you can't buy time, as cliche as it is. So if what is more important to you is time and comfort, this is the price you have to pay a lower value than the market.
Comparing all valuations and only then making a decision is the right thing for you to do.
