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Seller or trader: Which one are you?

Automobiles are one of the few things in life you can sell yourself or trade in when you decide to upgrade. After all, when was the last time your local appliance store gave you a few bucks for your old washing machine when you bought a new one?

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So what's the best way to get rid of your old car? Should you sell it yourself or settle for a dealer trade-in? It depends on what your vehicle has to offer and the payoff you want.

"Trade-in is prepackaged food. It's not as good as homemade, but it is convenient," says Mark Perleberg, lead auto expert with NADAguides.com.

"Selling it yourself is like a home-cooked meal. It takes more effort."

That extra effort, however, can boost your profit.

The case for selling
Selling your old car takes more time and know-how, but you can potentially get more money than when trading it in.

That's because you cut out the middleman, the dealer who must spend money to advertise and spruce up your car before he resells it at a profit. The dealer considers those costs before arriving at the amount he'll give you for your old auto.

A dealer's cut of the profit is what prompts many car owners to opt for self-selling. But remember, you're then going to face many of the same issues that the car dealer would.

If your vehicle is older or in less-than-pristine shape, you'll probably have to get it detailed to make it attractive to buyers. You may even have to spend money on repairs.

You also have to consider your time investment in marketing the vehicle and showing it to prospective buyers, which would most likely be on weekends or evenings.

If you do decide to sell, realistically assess your auto's marketability. Charlie Vogelheim, former executive editor of the automobile price guide Kelley Blue Book, notes that selling a Toyota, a popular brand, is a lot easier than trying to market a Daewoo.

Location also comes into marketing play. A two-wheel drive sport utility vehicle might sell quickly in Florida, but will be shunned in harsher climes where four-wheel drive is a winter-driving necessity. Sales appeal can even extend to color. "White, silver and black are popular colors," Vogelheim says. "Purple is not."

When your car does sell, you'll have to orchestrate payment. No personal checks, please, but what about a cashier's check from the buyer? How about monthly payments?

"You have to decide what type of payment you'll accept, which adds to what some people might call the hassle part (of selling a car)," says Vogelheim.

Another hassle is the paperwork you'll need to complete to ensure that ownership is transferred correctly. Do you have the title? Do you know what your state requires when a car is sold to another consumer?

Next: "On the other side is the vehicle-trade-in route ..."
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