Used Cars: Getting Cash for Your Old Ride with the Least Hassle

Last Updated Apr 1, 2011 5:59 PM EDT

As auto sales continue to bounce back, you may be among those getting that new-car gleam in your eye. If so, you probably need to get rid of your old ride. Selling it yourself will net you the most cash, but placing ads, taking calls and showing the car can be a hassle. Now there are a few new ways to reduce the hassle without cutting as deeply into the sale price.

Online car marketplace AutoTrader.com has launched a feature it calls Trade-in Marketplace. After you describe your car in meticulous detail, you get an offering price. You then can go to a participating dealer and get a check for that amount. Or you can use that amount as a trade-in on a new car. The only caveat: You have to be brutally honest and thorough in describing your car's condition. "If there is a big rip in the front seat and you didn't mention it, then the dealer won't give you the full online offer," says Mark Scott of AutoTrader. After a test-drive of the system, I think it looks promising.

Getting a guaranteed price online is the lowest-hassle option, plus, you get an actual check, instead of simply a trade-in value that becomes another moving part in your negotiation. Still, selling it yourself at the retail price often will net about 20% more. If you're willing to do the extra work to maximize your sales price, consider using an AutoTrader service that helps you craft the best possible ads and screens calls so that you only have to deal with serious would-be buyers.

Here's a closer look at your options:

Guaranteed price The fixed-price offer from AutoTrader is similar to a plan offered by CarMax, the country's largest seller of used cars, with just over 100 locations in 27 states. CarMax will make you an offer to buy your car at a set price any time during the seven days after the appraisal -- but it requires an on-site inspection, so it really only makes sense if there is one near you.
With no CarMax near where I live, I decided to try out the AutoTrader online offer plan with my 2003 Ford Escape. I went through the very detailed questionnaire (reporting dents and scratches and exactly where they are). The offering price at two nearby dealers was $5,502 -- about $500 above the trade-in value listed on Kelley Blue Book's web site. The Kelley "private party value" for what I would be likely to get selling it myself was $6,765, or $1,263 higher. But I knew from previous experience selling cars that I might well not get that full price. So if I had been planning to get rid of the Escape just now, I probably would have taken the AutoTrader offer.

Expert Help Let's say you have a newer car and the amount you stand to gain by selling it yourself is greater than mine was. For instance, if you owned a 2008 Cadillac CTS sedan (right), the trade-in value according to Kelley Blue Book would be $21,450, while you could sell it yourself for around $23,250. If you have a similar situation but you want to minimize hassle, consider a so-called VIP package from AutoTrader. For $259 (vs. about $50 for a basic ad if you do everything yourself), AutoTrader staff will help you write your ad and arrange up to 27 photos of your car (plenty of photos is essential for shoppers). In addition, any calls or e-mails will go to AutoTrader staff, not directly to you. They will ask questions such as how soon the caller plans to buy and how the purchase would be financed. This weeds out telemarketers and non-serious shoppers. Only buyers seen as serious will be forwarded to you, and they are not given your phone number or e-mail address.

Donation for old cars If your old car is worth $2,000 or less, consider donating it to a charity and taking a tax deduction. The recipient organization usually will come and pick up the car. But proceed carefully. Check the IRS Publication 78 to make sure the group is a registered charity eligible to take such donations. Only organizations listed as having 501(c)(3) status can take these deductible donations. Then make sure you follow current law, which changed a few years ago. You can only deduct the amount the charity actually received in selling your car, not the valuation for that car from a source like Kelley Blue Book. The charity should give you a receipt for that amount.

Ford Escape picture courtesy of Flickr user MUNDO TECNOLOGICO BY CHILENSIS
Cadillac CTS picture courtesty of Flickr user MSVG
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    Jerry Edgerton, author of Car Shopping Made Easy, has been covering the car beat since Detroit companies dominated the U.S. market. The former car columnist for Money magazine and Washington correspondent for Business Week, Edgerton specializes in finding the best deals on wheels and offering advice on making your car last.

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