In many states, you only pay sales tax on the "price difference" as opposed to the full selling price when you buy without trading. For example, if you buy a new car for $25,000 and trade-in your old car for $8,000 you will only pay $1,200 in taxes vs $1,500 if you did not trade-in your car.
Make it Easy on Yourself
Selling your car requires significant effort on your part. In order to sell your used car, you'll have to do things like run classified ads, field phone calls, and have strangers come to your house to go on test drives. Then of course, you'll have to negotiate.
Avoid Car Repair
If you sell your car, you will need to ensure it is maintained and all parts are working. This is extra worry and expense on your part, including fixing brakes, tires, and other pricey items. If you trade-in with a dealership, they cover all of the reconditioning expenses.
Selling your car can be dangerous. If you do choose to sell your vehicle yourself, be extremely cautious and take the proper precautions to insure your personal and financial safety. When setting up appointments with potential buyers that you don't know, only schedule meetings when a friend or family member can be there.
Walk Away Free
When you trade-in your car, you'll prevent any issues with a dissatisfied customer later on. What happens if the engine burns up or the transmission goes out? If you sell your car, the new owner knows how to contact you, and may do so. When you trade-in your vehicle, the dealership assumes all of the responsibility and you can walk away carefree.