While you are shopping for your next car you also need to decide whether it is best to sell your current car or trade it in to the dealership. There are benefits and drawbacks to each choice, and the final decision comes down to how each would affect your specific needs and car-buying situation. 
Trade-In Benefits
The most obvious benefit to opting for a car trade-in with a dealership is that you do not need to sell the car on your own. Private car sales by owner can take a long time to complete and require a lot of time and energy spent on your end. The trade-in process streamlines the transition from your old car to the new by containing all of that work in one transaction. There is also a financial benefit to a dealership trade-in deal, as most states apply tax to the price of the new car minus the trade-in value of the old instead of against the entire purchase price.
Selling Benefits
The first benefit to selling your car on your own is that you can usually get more value out of a private sale, compared to the average trade-in value of most used models. As your car gets older and accumulates mileage, the amount a dealership will offer drops exponentially. On the other hand, a private buyer is more likely to pay close to the full fair market value of a used car in relatively good condition. The popularity of online car sales and free word of mouth advertising via social media has made the private car sale experience easier and somewhat faster. You should also consider selling your car yourself if you do not need the money to purchase your new vehicle, especially if you may not want to buy from a dealership.
Trade-In Drawbacks
The trade-in value of a car will never be the full fair market value, as the dealership still needs to prepare the car for showing and make a profit. A drawback some consumers never consider is that, once the trade-in ball starts rolling, their car options are limited to what that dealership has to offer in their price range. This shouldn't be an issue if you research dealerships that have the car you want, but it can still become frustrating if the exact model you were hoping for is no longer available.
Selling Drawbacks
Unless you’re an experienced salesperson, the experience of selling your own car can be somewhat uncomfortable and stressful. Aside from needing to advertise, show, and negotiate the sale, you also need to handle all of the paperwork with the Texas Department of Public Safety. The potential headaches of private car sales are often reason enough to choose the trade-in option.
The best way to figure out whether selling or trading in your car is the best choice for you is to first consider how successful you would be selling the car on your own. Consider whether the lower trade-in value of most cars is worth the easier sales experience compared to private car sales.
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