Is it better to trade in or sell yourself? We compare offers for 100 cars.

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It's no debate that the used car market is still wildly competitive due to a shortage of cars for sale. In an effort to find cars for their lot, dealers are paying higher prices than ever to buy your car. Given these market conditions, is it better to trade in (or sell directly) to a dealer or sell yourself to a private buyer? To find out, we got offers from Carvana for 100 cars and compared them to the Kelley Blue Book private party value.

We'll dig into the details, but if you're just looking for a single number, it's 46%. On average, selling to a private party will get you 46% more money for your car compared to trading in to Carvana. That includes an estimated trade-in tax credit for those of you who live in states that offer them.

Cars with better or worse offers

Newer cars had the best offers

Cars that sold new within the last three years and with less than 25k miles had the best Carvana offers. For these cars, the Kelley Blue Book private party price was about 25% higher than the Carvana offer. Including an estimated trade-in tax credit (we used a 7.5% tax rate), selling private party would net you a 15% better price.

However, even though this difference as a percentage looks better, the higher price of these cars still leaves a lot of value to be had when selling privately. For vehicles with less than 25k miles, the average difference in dollars was about $8k including the estimated trade-in tax credit.

Offers varied significantly for older cars

For cars more than three years old or greater than 25k miles, offers varied signficantly. This variance seemed to be a function of mileage more than year. For example, Carvana offered $2.5k for a 2016 Volkswagen Jetta with 118k miles whereas the private party value was $10.5k (310% higher). However, a lower mileage 2016 Cadillac Escalade with 69k miles got $22.8k from Carvana with a private party value of $41.3k (81% higher). Although the percentage difference is better, almost $20k more is a huge amount of money left on the table if you're the owner of the Escalade.

Other interesting stats
  • Cars with more than 100k miles averaged 102% higher private party value compared to Carvana's offer. If you're selling a car with less than 100k miles, you can still expect to get about 46% more selling privately.
  • Cars older than five model years (2018 and older) averaged 68% higher private party value compared to Carvana's offer. If you include an estimated trade-in tax credit based on a 7.5% tax rate, this drops to 56%.
  • Since price largely depends on model year and mileage, a similar trend is seen when we compare less expensive cars to more expensive cars. Cars with a KBB private party value of less than $20k had an average value 75% greater than the Carvana offer. More expensive cars, those with a KBB private party value of more than $20k, had an average value 43% greater than the Carvana offer.

Summary

In summary, you will always make more selling yourself -- even when dealers are paying top dollar for used cars. How much more depends on the vehicle you're selling and, for the most part, how new it is. If a dealer like Carvana thinks your car will sell quickly, they'll make a better offer. However, all dealers still have expenses to pay for, so they'll never be able to offer as much as a private buyer.

How we collected data

We found 100 cars on various used car sites, listed both by private parties and dealers, for our dataset. To get a random set of model years, makes, and mileage, we sorted the marketplace results by the date they were added to the site. As a result, our dataset spanned from model year 2006 to 2022 and from 13 miles to 172k miles. It also contained cars from 32 different manufacturers.

Of the 100 cars, four outliers were removed from the dataset. These cars were either more than 20 years old, had very high mileage or both, resulting in a 10x difference between Carvana's offer and private party value. The results above exclude those four vehicles to avoid inflating the averages.

For KBB private party value, we used the default trim level, "good" condition (the most common), and a zip code of 98101 for consistency. For Carvana, we used the defaults for everything: 2+ keys, no damage, "pretty great" condition, no accidents, etc.

Dive deeper

Private Party Value vs Carvana Offer by Model Year
Private Party Value vs Carvana Offer by Mileage
Private Party Value vs Carvana Offer by Private Party Value
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About Andrew Crowell

Andrew is an avid car enthusiast, software engineer, and business leader in the automotive and e-commerce industry. He's owned a couple Mazda Miatas, an E46 M3, a Subaru WRX STI, and a Porsche 911 Turbo.

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