Did you know that the average junk car is worth $196.37 according to a new report?

While that might not seem like much money, it sure beats having to look at a beat-up old vehicle taking up space in your lawn every day. Plus, that’s money you could put toward a brand new vehicle!

But before you drive off the lot in your hot new ride, you’ll need to make sure you know how junking your car works. Here are three important tips to follow.

1. Know Your Vehicle’s Value

When it comes to how to junk your car, knowledge really is power. By knowing your vehicle’s value, you can keep yourself from getting ripped off.

The best way to calculate your car’s value is to use an estimate tool like this one at Consumer Reports. Aside from entering your make and model, be upfront about your vehicle’s condition, as that’s the biggest variable.

2. Consider Selling to a Dealership

Out with the old, in with the new! If you know you’re going to purchase a vehicle soon, you can save yourself some time by selling directly to a dealership, especially if they specialize in used cars for sale.

You may be able to get a financial incentive by selling straight to a dealer, particularly if you tell them that you’re interested in buying a car from them.

At the same time, don’t be afraid to haggle. This is where knowing your vehicle’s value comes into play again. If you think you’re getting ripped off, walk away.

3. Keep All Important Paperwork Organized

Getting rid of a junk car involves complicated paperwork. And a lot of it! Keeping all relevant documents in a single, safe location is the best way to keep the sales process from stalling.

So, what will you need?

For starters, all documents that prove you’re the legal owner of the vehicle, such as the title. This can be tricky if your vehicle has a lien. In this case, you’ll need to consult your state’s laws to see what your options are, as it could prevent you from selling your junked vehicle entirely.

If you own your vehicle, you’ll need to acquire a bill of sale that outlines the terms of the transfer, including how much you’re selling it for and on what date. You can find templates on your state’s DMV website, or you can write your own if you’d prefer.

Finally, make sure to let your insurance company know that you’ve sold the vehicle so they can remove it from your policy.

Junking Your Car Made Simple

If you’re fed up with having to funnel money into repairs, junking your car can be a great way to get some money off of an old or malfunctioning vehicle.

Make sure to know your vehicle’s worth so you can get the best value whether you’re selling to a private buyer or a dealership, and keep all of your paperwork together.

For more tips on buying, selling, and maintaining your car, be sure to check out the rest of our auto and motor content!