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Are you going to sell your car?

Gas prices are still high. The prices of used cars are still high. Find out if it might make sense for you to sell your car.

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Gas prices are still high and used car prices are still high. Different parts of planet Earth are literally on fire. So is this a good opportunity to save some money, make some money, help save the world, and/or maybe free up some space in your driveway for a basketball hoop? And if it’s a good time to sell your car, how should you go about it?

Below you can read about why you should consider selling your car and how to sell your car if that’s what you decide to do.

In this article:

Why you should sell if you can

“Cars can be absolute budget-busters, between the huge monthly payments caused by escalating sticker prices and minimal down payments, rising insurance costs, regular maintenance and occasional repairs,” says Greg McBride, CFA at bankrate.com.

It’s also worth mentioning that the older and cheaper your car is, the less “occasional” repairs and maintenance will be. And then there is the opportunity cost. Money you spend on buying, maintaining, fueling and parking a car is money you are not investing or saving. It’s just money you’ll never see again.

The American Public Transportation Association says a household can save nearly $10,000 a year by using public transportation and owning one less car. Therefore, as McBride says, “if you can get by without a vehicle or have the luxury of waiting to get one, you’ll have a lot more financial breathing room.”

But can you?

While the current high price of used cars makes this a good time to sell your car, it also means that “this is not an ideal time to buy another one,” says Tom McParland, founder and buyer’s agent at Automatch Consulting. Sell ​​now and “you can get more for it in this market than you otherwise would,” but that only makes sense if you’re sure you won’t be buying another one in a few months.

To avoid that scenario, it’s important to consider the follow-up question, “So what?” before you sell your car,” says McBride, “much like you should before you sell a house or any other utility asset where prices have gone up. Getting rid of a car altogether or downsizing from a 2-car household to a 1-car household is not a viable consideration for many households, especially families, those with long commutes or those who use their vehicles for their jobs.”

Therefore, once you’ve answered the question “so what?”, it’s time to test your solution. Before getting rid of a car, McParland says, “people should really research their transportation needs carefully and make sure they have easy and convenient access to transit or carpooling. Take a test drive for a week or two to not use your car at all before you decide to sell it.”

“Do a test drive for a week or two to not use your car at all before you decide to sell it.”

—Tom McParland, founder and buyer agent at Automatch Consulting

How to sell it

If you have thought through how you would manage without a car and are happy with the solution, how should you go about selling it? “It really depends on the age and mileage of the vehicle,” says McParland. “Generally speaking, for cars over 15 years old, your best bet is a private sale through Craigslist or Facebook Marketplace,” because the amount of money means you’ll lose too much if you use a third-party vendor.

“If you have a newer car, a private sale can still be lucrative but there are companies like Carvana, Vroom, Carmax and others who will not only make the process easy, but will often give you a very competitive price,” he says. “I recommend using the online platforms of several outfits to get a number of bids and see who will offer top dollar. I have seen several cases where one company offers a little more than the other, but it all depends on the vehicle and the region.”

If you’re not in a rush, start online and switch tactics if you don’t get any offers, says Sam Dogen of personal finance website Financial Samurai. “I’ve bought and sold over 10 cars on Craigslist,” he says. “You can get the most for your car by selling it privately. The minimum you get for your car is to trade it in or sell it to a dealer.”

He adds that “I would first try to sell your car on Craigslist for a month. You get so close to the Kelley Blue Book value this way. But after a month, if you can’t get one, you can go to the car dealer and try to negotiate .Car dealers are hungry for used cars at the moment and should give you a better deal than before the pandemic started.”

Should you donate your car instead?

Yep, you can donate your car to charity. And no, the donation process doesn’t involve driving to your local Goodwill and trying to squeeze your hatchback into the drop box.

Simply research if any non-profits in the area accept vehicles and contact you to arrange a donation. Once you’ve done that, you can deduct the fair market value of the car from your taxes – this may or may not make financial sense for you, partly depending on the condition of the vehicle, but it will ensure your car gets a second life. something good. (And hey, no one ever said no to a tax deduction.)

What you need to sell your car

Whichever method you choose, you’ll need to gather your papers: Here’s a list of what you’ll need.

You should also try to get a general idea of ​​what your car is worth, so you can make an informed assessment of offers and sales opportunities. Find the Kelley Blue Book value of your car. (Using the VIN and license plate number will be more accurate, but even the make, model, and year will tell you a lot.) Also, look for similar car sales online in your area.

It’s also worth addressing any minor repairs that may be needed. Even if you don’t want to invest a lot of money in something you hope to never drive again, your car will be attractive to more buyers if they can use it once, and for a while, before spending money on it.

And finally, clean it inside and out before taking pictures and showing it to potential buyers. You may be tired of having that car, but to actually get rid of it, you need to attract someone who is happy to get behind the wheel.

Our editorial policy

Haven Life is a customer-centric life insurance agency supported and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and overall well-being can be refreshingly simple.

Our editorial policy

Haven Life is a customer-centric life insurance agency supported and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe that navigating life insurance decisions, your personal finances and overall well-being can be refreshingly simple.

Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less difficult if they fit your situation.

Haven Life is not authorized to provide tax, legal or investment advice. This material is not intended to provide and should not be used for tax, legal or investment advice. Individuals are encouraged to obtain advice from their own tax or legal advisor.

Our disclosures

Haven Term is a term life insurance policy (DTC and ICC17DTC in some states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in some states, including NC) issued by CM Life Insurance Company, Enfield, CT 06082. Police and driver form numbers and features may vary by state and may not be available in all states. Our agency license number in California is OK71922 and in Arkansas 100139527.

MassMutual is rated by AM Best Company as A++ (Superior; Top category of 15). The rating is valid from 1 April 2020 and is subject to change. MassMutual has received different ratings from other credit rating agencies.

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