A used car dealership, rather than selling it to a private party, may spend less on a new car, but it provides a simplified, barrier-free deal.

There are advantages and disadvantages to used car trading. When buying a car, one of the many decisions buyers need to make is how to deal with their previous car. Should they sell it privately or to dealers?

Advantages of the used car trading

It's hard for many people to sell cars in private. It takes time (most cars don't sell overnight), effort (advertising for cars), money (local classified ads and Internet sites usually cost money), and a little vulnerability (phone numbers that people who are interested may call you at 0:00). All these inconveniences can be avoided by trading used cars at dealers. The dealer will quote the vehicle on the spot and remove it from your hands on the same day. Even if you don't buy their car, some dealers will offer to buy your car.

For one reason or another, some people trade vehicles and they still owe money. The dealer will accept the deal regardless of whether the car has been paid for. If a used car has not been paid off, the dealer will contact the lender and pay the balance. This is an attractive benefit. It allows you to get a new car without having to pay off the old one first.

In addition, in difficult economic times, some people's car loans are upside down. Dealers will also trade these vehicles and repay the loan. Of course, any balance in excess of their purchase offer will be added to the loan balance of the vehicle they purchased. For those who want to get rid of bad loans, this may be a way to achieve this goal.

Disadvantages of the used car trading

The main purpose of car dealers is to make profits. The faster dealers make money on specific vehicles, the stronger their financial position. One of the easiest ways for dealers to make a quick profit is to buy a used car at a discount and resell it at a price higher than the original price. Dealers get used cars through various channels, but their main way is to buy used cars from people who buy new cars from dealers.

It's hard to trade in more than or even equal to the price you can get from selling your own car. This may be the biggest disadvantage of the used car trade. Depending on the brand, model, year and condition of the vehicle, the trade-in prices offered by most dealers range from below the Kelly blue book value to the correct kBb value.

One of the main responsibilities of owning a car is routine maintenance. Depending on the vehicle, keeping the vehicle running efficiently can be an expensive proposition. When used cars are traded, dealers usually don't think about the money you spend on maintenance. Dealers do not take into account common items, such as recent adjustments, new tires and repair work, when quoting in transactions. These are costs that you cannot recover when you trade a vehicle with a dealer.

Although most dealers do buy most of the vehicles in the old for new way, there will also be situations where dealers do not want used cars to be traded in. Most traded vehicles can actually be resold by dealers. However, there are two common examples where dealers may not want to trade.