I am Buying a New Car, What Should I do With My Old One

When purchasing a new or used car, there are several things you can do with your older car. You can use it as a trade in, you can sell it privately, you can give it to a friend or relative, or you can donate car to charity. There are pros and cons with each choice.

Negotiating the purchase price for a car with the dealer is difficult enough without having to haggle over the trade in amount. Most car buying guides indicate that you can probably make a better deal without a trade in. If your used car needs significant repair or does not run, the dealer may not offer you much of a trade in for it simply because he does not really want it.

Selling your used car privately comes with its own set of problems. First, you have to advertise it and wait for people to response and make arrangements to look at it. Then you have to wait for them show up.  If you car does not run or is in poor condition, you might have to makes some repairs in order to sell it. Once you have an interested person, you then have to negotiate the selling price. After you settle on that, you have to establish the terms of payment, i.e. will you take a check, accept payments, etc.  Accepting another method of payment other than cash, a money order or a certified check is never in your best interest. There are some other concerns associated with the private sale of an automobile. Everyone has heard horror stories of the buyer suing to get their money back by claiming the auto had some major problem that the seller failed to disclose. Fortunately, in most states private sales are viewed as being as-is and these types of lawsuits are generally unsuccessful. The other concern is that the buyer will drive the vehicle without transferring the title or registering it in their name. This can happen particularly in states where the license plates stay on the car.

On the surface, giving your older car to a friend or relative seems like a very generous gesture. However, this can really backfire and cause irreparable damage to your friendship particularly if the vehicle develops a major problem you were not aware of shortly after the gift.  Besides the possibility of losing a friendship, you will get no financial benefit by gifting a car.

Charity car donation may be the least stressful of all the choices. The more information you have on the subject the better. The financial benefit to you is the tax deduction you will be eligible to receive when you donate your car. You have to itemize on your federal tax return to claim it. The car donation process is very simple. Usually, you only have to make a phone call or go online to donate your car to charity. Your old car should be picked up for free. Some car donation charities will let you donate car that is in poor condition or does not run. Cars4Charities.org is one of them. They will help you to avoid any pitfalls. When you donate car to a reputable car donation charity, a 501 (c) (3) non-profit you will not have to worry about any documentation issues.