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SMART MONEY, A COLUMN BY BRUCE WILLIAMS

Buying vehicle, selling old one no easy task

Tuesday, June 25, 2013 - 7:15 am

Q.: In another year, we will most likely be buying a new vehicle, mainly because our family size will be increasing. We want to be as smart as possible about this and plan to sell our current vehicle on the open market since we'll never get the real value for it from a car dealer.

Also, since we have always believed in bigger down payments as a way to finance less and pay things off sooner, we would like to make a larger down payment on the new car. We did this with our house and got a good jump-start on the equity. But is it wise to do this when buying a car as it will only depreciate with time? – Cindy, via email

A.: You raise two essential questions. First, is selling the vehicle on the open market a smart way to go? It may or may not be.

If you are concerned about your car's ability to maintain its value or fear the engine is ready to leave us, I would feel more comfortable trading the car in and letting the dealer handle it. In today's world, used cars are doing relatively well, and you should be able to get a decent return.

However, if you wish to sell it yourself, you can still think about trading it in if it doesn't work out.

Second, as to the down payment, you're right: The more you put down, the less you finance and the quicker you pay it off. You’ll want to shop for financing, as well.

If you pay cash, borrowing the money elsewhere, oftentimes you can get a substantial reduction in price or a cash refund.

Either way, the answers are not always clear. Who said this should be easy?

Send questions to bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.