ith some of life’s questions, there are no hard-and-fast, right-or-wrong answers. The best approach to take will depend on your circumstances and where your priorities lie. Such is the case when it comes to figuring out what to do with your current car when purchasing a new one.
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You have three choices. You can trade it in to a dealer. You can sell it on your own to a private party. You can donate it to charity. The fourth choice, parking it in your yard and reducing home values in your neighborhood, does you and the people around you no good.
Vehicle age often plays a role in this decision. Data from a recent Bureau of Labor Statistics consumer expenditure survey indicates that for households disposing of a vehicle during 2012, the average age of vehicles sold to private parties was 15 years, while the average trade-in was 9 years old. The average age of vehicles that were donated or given away was 14 years.
The fact that trade-ins tend to be newer than private-party sales isn't surprising. Older cars with lots of miles don't hold much appeal for dealers, and you'll have a harder time negotiating a fair trade-in if your car is the automotive equivalent of a senior citizen.
As far as donations go, most charities will take your clunker off your hands regardless of its age or condition. If the car isn't drivable or is in poor shape, the charity will sell it at auction or to a salvage yard, and channel the proceeds to its cause.
If you're donating simply to get rid of your car and for the good karma, the process is simple and straightforward. Place a call to the charity of your choice, and wait for some kind soul to show up at your door and drive or tow your car away so it can do its part assisting the greater good.
Donating your car can net you tax benefits. If you're donating with the intention of maximizing these tax benefits, you'll have to jump through a few hoops, and we'll talk more about that later on in this article.
Whether you choose to trade in your car, donate it, or make a private-party sale, you'll find each route has benefits and drawbacks. Below are pros and cons of each approac