When buying your next car, you'll want to use your current vehicle to your best advantage. Trading it in can be convenient, but you have to be wary. Dealers will always try to give you less than its average trade-in value to maximize their profit. You may net a higher retail price by selling it on your own. The following tips may help you decide which option is best for you.

If you trade in your car, the dealer takes full responsibility for the resale. That means you won't have to worry about placing advertisements, scheduling test drives, or resolving legal issues. Also, you may only have to pay sales taxes on the difference between the trade-in value and the new car cost. Keep in mind, however, that selling a car yourself usually brings in more money.

Check used car buyers' guides for current estimated retail values. Here are three: CUDL AutoSmart, NADA – National Auto Dealers Association and Edmunds. Peruse local dealers' ads for recent sale prices. Settle on a value between the two, but remain flexible.

Thoroughly clean the car inside and out. Remove any contents you don't want sold with the car. You may want to apply a coat of wax or hire a professional detailer to go over your car. Auto detailing can run from $90 to $150, so shop around. Consider having the engine washed as well. Change the oil and fluids.

Gather all your car papers including title, registration, emissions inspection receipts. Organize repair records so a new owner can see how you've maintained the car. A car that's been well maintained, with papers to prove it, can get a higher sale price.

Consider having your car inspected for sale ahead of time by your licensed mechanic. Make any repairs necessary for your car to pass. That will also help you get a higher price because you can advertise your car as having passed an inspection. Let your mechanic know you are selling the car. They will often be more rigorous in their assessment if they think you are the buyer instead of the seller. Have the results of the inspection available for potential buyers.

Use a variety of sources and adjust the ads according to the response you receive. Place a FOR SALE sign in the window when it's parked. Make yourself available to answer telephone inquiries as much as possible after the ad runs. Return messages promptly. You could lose a sale by not giving good service to potential buyers.

Some experts suggest accepting the first reasonable cash offer, but always keep in mind the car's value and what you can afford. Hold out if you're uncomfortable with the deal. However, remember with each passing month, your vehicle may lose value in pricing guides. Be honest with potential buyers about known problems so they can be figured into the price and won't come back to haunt you later.

It's better to be safe then sorry. Once you have a buyer, insist on getting payment by cash, a certified personal check, or cashier's check. Most car dealers do so, and they are better able to collect on a bad check than you might be.

Once you have payment for the vehicle, write up a bill of sale signed by you and all other joint owners listed on the title, and transfer the title to your buyer according to your local laws. Consider accompanying the buyer to the Department of Motor Vehicles. You'll also need to turn in your old tags and registration to your local Department of Motor Vehicles (or have them transferred to another vehicle you own) and notify your insurance company. Make copies of all paperwork and checks for your records.

If you don't like what the dealer is offering in trade and you don't want to sell it yourself, consider donating it to a charity. Vocational schools and other organizations may need inexpensive transportation to further their goals. If you donate your car, you'll be able to write off the current retail value off your federal taxes. Check with your tax advisor for details on current donation rules and documentation requirements.

Read our Auto Buying Guide online or print (.pdf format) a copy.

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