Trading in is easier. Selling privately usually pays more. The right answer depends on how much your time and peace of mind are worth.
What a trade-in gives you
Speed and simplicity. You hand over one car, drive away in another, and the dealer handles the paperwork. There are no strangers at your house, no test drives with people you do not know, and no risk of a payment going wrong. In some states, trading in can also reduce the amount you pay stamp duty on, since duty may be calculated on the changeover figure — the rules vary by state, so check what applies where you live.
The cost of that convenience is the price. A dealer has to recondition, warrant and advertise your car, so their offer will be below what a private buyer would pay.
What a private sale gives you
More money — often noticeably more. What it costs you is time and effort: cleaning and photographing the car, writing the ad, answering messages, arranging inspections, and dealing with people who do not turn up.
There are risks to manage too. Meet in a public place or have someone with you. Verify a buyer's licence before a test drive and go with them. Never hand over the keys or the papers until the money has actually cleared in your account — bank transfer receipts can be faked, and cheques can bounce.
Prepare either way
A clean, tidy car with a full set of service records and both keys is worth real money more than a dirty one with a missing logbook. Fix the small stuff: a blown globe, worn wiper blades, a warning light. Get the car detailed — it is one of the highest-return things you can spend money on before selling.
Clear any finance first
If there is money owing on your car, it will show on a PPSR search and buyers will walk. Talk to your lender about a payout figure before you list it, and run a PPSR search on your own car so you know exactly what a buyer will see.
Get more than one number
Collect offers from a couple of dealers and from online instant-offer services, then compare them against realistic private listings. Once you can see the gap in dollars, the decision is easy.