A Step-By-Step Guide to Cashing in on a Clunker

Knowing when to quit is just as important as knowing when to keep going. There are few examples more fitting than car ownership. Cars provide us with the freedom of mobility and convenience. However, historically, cars provide a very poor return on investment, and they depreciate quickly. That doesn’t mean you can’t cash in if you play your cards right. There’s a specific tipping point between making the repairs to your broken down ride, or cutting your losses and moving on. Unfortunately, the tipping point often falls into a grey area where one must decide if the risk is worth the reward of the repairs. Timing can differ from one consumer to another based upon the individual cost of said repairs, financial situation, value of the car, and total investment.

Chances are, you’ll know exactly when you’ve landed on the “it is time to sell” side of the fence. This can be a hard decision, but nothing is worse than waiting TOO long. Follow the steps below to squeeze the most value out of your car. You may find a few strategies to employ to help recoup your losses and finance a better, more reliable vehicle.

Step 1: Determine the worth of your car.

Chances are, you have already done a fair amount of research before deciding to sell. However, it is always wise to educate yourself on the KBB value, or the current market value, of your ride. Check out local classified ads and online sales forums for similar cars for sale. Consider using free online valuation resources as well, and be sure to factor in deductions for necessary repairs and condition. At the end of the day, your car is only worth what someone is willing to pay for it.

Step 2: Ask for Quotes.

Shop around. In many cases, the best offer is the first offer. However, if the cost of necessary repairs outweighs the actual value of the vehicle, selling to a salvage yard for parts may be a better option than a private party or dealership trade-in.

Step 3: Seal the Deal.

Once you’ve found a fair and reasonable deal, you may be responsible for delivering the car. If it is possible to do so safely, many places will pay top dollar if you are able to drive the car to them. Keep in mind that safety is paramount to you and other motorists. Only operate the car if it can be done without unnecessary risk to you or those that share the road. You could just as easily work with a towing company, or find a friend who has a car trailer.

Step 4: Money in the bank.

Now that the unreliable clunker is in your rearview mirror, it is time to assess your financial situation to determine if the money you’ve recouped from the sale is enough to use as a down payment on a newer and/or more reliable vehicle. Keep in mind that flashy, sexy, or fast cars are not always the most reliable and economical. Create a budget that includes honest cost of ownership figures (insurance, registration, fuel, maintenance, etc.) and stick within your budget.