Getting Money for an Unwanted Car When a Dealership Won't Pay You a High Trade-In Value
If a dealership low-balled you on a trade, you may be able to get more money by donating the car or selling it for parts and scrap metal
It happens to everyone at one point or another. An old car that provided years of reliable driving was pushed to the side of the driveway in favor of a new model. This often happens when we want a backup vehicle or if the dealership's trade-in offer was abysmally low. If you have an old clunker that isn't worth much, you still might be able to make some money by donating or recycling it.
Other Drivers Might Want the parts
As vehicles age, it becomes less cost-effective to repair broken or damaged parts because of how much they cost when new. Very often, many parts are simply no longer available. This is where salvage or junk yards come into play. You can sell your unwanted car to one of these businesses, getting it out of the driveway. The vehicle will then sit on the yard for some time as part-seekers remove and buy the parts they need. Once most of the valuable parts have been removed, the vehicle will be recycled.
Don't expect a massive payout
When you're selling an old car to a salvage facility, you're not going to get a lot of money. Most of these businesses will come to you and tow the vehicle away, but you may be able to get more money if you drive it in and drop it off. Most of the time, you'll get between $250 and $1,000 depending upon the type of car, its age, its condition, and the demand for parts. The amount you get offered may even be significantly less, making it more profitable for you to sell parts from the vehicle and then selling it for scrap metal.
We've calculated the average payout to be around $400. While that's not much, it's money you didn't have before.
Finding a Salvage Yard
Believe it or not, salvage yards are pretty common, though often well-hidden from the road so you don't see the lot. To find a potential salvage yard near you, try doing a quick online search. Many scrap metal and parts dealers will have an online presence and some post average payouts. Talk to a few businesses to make sure you're getting the best deal.
Donating the Vehicle
If you don't want to go through the hassle of selling the vehicle to a salvage yard, it's even easier to donate it. Many nonprofit organizations, like us, accept vehicle donations that can either be used or sold at auction for quick operating cash. When donating a vehicle, most organizations will come to you and tow it away, leaving you with a tax receipt.
Claiming a Tax Deduction
If you donate the vehicle, you need to keep in mind that you may net less money than if you sell it outright to a salvage yard. When you make a vehicle donation, you are allowed to take the fair market value, which is the amount a reasonable person would pay, if the vehicle is put into use. Otherwise, if the vehicle is sold at auction by the nonprofit, you can claim only the amount the nonprofit gained. Depending upon your tax bracket, you might only lower you tax payment by a small percentage of this price. But it's a good option if you want to help an organization you care about.
Consider a private party sale
If you aren't likely to get much from a scrap yard or donation, consider listing the vehicle for a private party sale. If a crap yard offered you $250, list it for $400 and as a vehicle for a first-time driver who will likely crash it anyway. You may be surprised by the response.
Insurance and Registration Concerns
If your vehicle is currently insured and registered, there are some additional concerns. Keep in mind that if someone drives the vehicle away without registering and insuring the vehicle, it's still registered to you if that person crashes it. That means you could be on the hook if damage occurs to another person or property. Make sure that when you turn over the vehicle and keys that you have some kind of documentation that the vehicle is no longer yours. Take a picture of the title after it is signed and notify your insurance company and the Division of Motor Vehicles that the vehicle was sold or donated and to whom. Cancel insurance and return the license plates.
You Need the title and valid ID
Regardless of whether you decide to sell the car for parts or donate it, you need to have a valid title in-hand and it needs to be titled to you. You can't get rid of the vehicle without this proof of ownership, which is then taken by the new owner. You also can't sell or donate the vehicle if it isn't titled to you. This mean you can't turn over a vehicle that is titled to just your spouse, a parent, sibling, etc. You will need a valid photo ID to prove you are the person listed on the title for when you sign the document in front of a notary.
Don't forget your stuff!
Cars can accumulate belongings over time, and there might be things under the seat, in the trunk, etc. So go through the car thoroughly before you make the transfer. Once the vehicle is transferred, the new owner owns it and everything inside. Make sure any paperwork that has personal information is removed.