Hello,

I owe $9000 on my 2002 Camry LE to the bank. The current value of the car is around 6500. What would be the best way to sell my car Should I sell it to private party (come up with the difference 2500 from my pocket).

Or Should I trade in with a dealer ( I need some cheaper car so that I can pay cash upfront and not have the bank bite me every month).

Please advise.

 

Are you going to finance the replacement car?

Typically to get the most money it is best to sell the car for cash to a private party, then shop private party sales for a used car.

The dealer is in business to make a profit. They will do this by offering less on your trade-in, keeping the price up on the car you purchase or charging higher interest rates (or all three).

The advantage of using a dealer is they can wheel and deal to get the monthly payments to what you can afford. However the overall deal may be a poor one from your prospective except for the lower payments.

Dealers typically pitch how much of a monthly payment can you afford then manipulate the figures to get this.

One other issue is credit is very tight for money; dealers may have less incentive to loan on such a small deal versus a new car or want higher interest rates. I am not sure.

If you have cash from the sale of the old car, you may be able to get the sticker price on dealer lot replacement down to something reasonable. Many are hurting for cash these days.

If you need to finance the car suggest checking with a credit union (if you are eligible to join one). They have not been affected by the home mortgage issues and are still willing to loan money at reasonable rates.

If interested in a replacement Camry or Honda, should be able to find a 1995ish model in very good condition for $3-4K. One place to start looking is Craigslist.

If you own $9K, sell the car of $6.5K. Buy one for say $3.5K the overall deal should be a wash. Remember when buying any new car to include sales tax and transfer fees that can add up depending on the state.

Shop around for used cars; I see a lot of them in very good condition at reasonable price listed on Craigslist, at least in this area.

The Camry with 4-cylinder engine is still popular, unless living in a severely depressed community it should sell OK to a third party.

Might even go as far as looking for a more fuel-efficient car. Gas prices are low at this time but sooner or later they will pick up again IF the economy ever does.

 

Thanks for your comprehensive reply!

You are right, I didn't realize that the dealer took me for a ride when they sold high mileage car. The price reduced to half in 2 and half years.

Gud lesson4me not2go4dealers when buying a used car.