So you’re ready to buy a new car. That’s always an exciting move, but before you jump in, there are some important considerations to make regarding selling your current vehicle. The easiest solution is simply to trade in your car at the dealer if that’s where you’re making your purchase. However, going that route has unique pros and cons, and you won’t get the most money.
Depending on the condition of the car, you might keep it, give it to a relative or friend, or donate it to charity for a tax deduction. But if you’re looking to get the most cash for your used car, consider selling it privately. It’s not as difficult as you may think. It can take a few weeks, and you’re responsible for advertising it, as well as completing the DMV paperwork – but once you find the right buyer, it’s often well worth the effort. Below are the steps you can take to sell your used car.
Clean Your Vehicle
No one would expect perfection when purchasing a used car, and yours is no exception. But if you show you’ve taken the time to spiff it up inside and out – including washing and waxing, replacing old windshield wipers and floor mats, and filling your tires and fluids – you show prospective buyers you’ve treated it with love. That translates to responsible ownership.
For less than a hundred dollars, you can have the car looking its best. And if you think it’ll translate to a higher sales price, pay to have those minor scratches and dings fixed. Or, if you’re lucky, you may be able to find your car’s exact paint color at an auto supply store and hide scratches yourself. While you’re there, pick up a “new car smell” air freshener and stick it under the seat.
Price It Right
As in selling anything, cost is the most critical aspect to unloading your old ride. The more competitively you price the car, the better. Of course, you want the most money, especially if you plan on using cash from the sale as a down payment on your new car, but reaching too high will only scare off potential buyers.
Fortunately, the Internet abounds with accurate pricing structures. Visit sites such as Kelley Blue Book, Edmunds, and Yahoo! Autos for an easy and reliable way to gauge the fair market value. Based on information you provide regarding the make, model, options, and condition of the car, you’ll receive the trade-in, as well as the private-party, price for the area in which you live. Then check classifieds to see how similar vehicles are actually being advertised.
Choose an asking price that’s a hair below other cars to get people’s attention – but since buyers almost always haggle and negotiate, it’s okay to pad by $500 to $1,000 so you still have wiggle room to get the price you want. In other words, if you need $10,000 for the car, list it at around $11,000. Then again, if you’re really anxious to sell, put “or best offer” in your ad, and prepare yourself not to get the asking price.
Advertise the Vehicle
Several options are available to get the word out that you have a worthy car to sell. The more tactics you employ, the sooner you’ll be able to locate a buyer.
1. For Sale Signs
Sure, sticking a big prefab sign on your back and side windows isn’t very attractive, but no one will dispute that it gets you noticed. And you don’t have to do a thing other than go about your life. Just think of the number of people who pass you as you commute to work or run errands each day. By sheer percentages, a portion of these folks are looking for a new car, or they know someone who is – and all it takes is one buyer. Clearly write your mobile phone number, the year, and the asking price in can’t-miss large print, and you just might get a nibble.
2. Website Postings
Both national and local sites let you run ads for used cars. Auto Trader, eBay Motors, Kelly Blue Book, and Edmunds are just the tip of the iceberg. Even Craigslist has become a popular destination for both buyers and sellers, but you need to watch out for scams. Include as much information as possible about your vehicle, from asking price to its precise condition. And be honest. If there’s some wear and tear inside or on the body, speak now.
Remember to include photos from all angles, including the wear and tear you owned up to. More information ensures you’ll reel in well-informed, ready-to-buy shoppers. And though many of these sites charge you to advertise, it’s worth it for the number of eyeballs you will reach.
3. Traditional Classified Ads
While most people head to the Internet nowadays to buy and sell, never discount the tried-and-true methods. In addition to posting a sign and setting up an online presence, motivated sellers often run ads in the automotive section of the local paper. Space is limited in print ads, but it’s still necessary to list the vehicle essentials concisely.
Meet With Potential Buyers
Now that the calls are rolling in, it’s time to meet the contestants. Selling a car yourself does take up your spare time, but you can screen callers to weed out the looky-loos. And if you’re not in a rush, you can opt to show the car only to cash buyers or people who’ve been pre-approved for an auto loan.
When you finally connect with the interested parties, do not invite them into your home. Plan to meet in a well-lit public area, such as the parking lot of a retail store. Walk them around the car, and open the hood. Answer all questions to the best of your ability. And before any test drive, ask to see a copy of his or her driver’s license, then ride along with the person. Finally, since buyers want a car that’s been properly maintained, you can provide a copy of the vehicle’s previously secured CARFAX or mechanic’s report.
Everyone wants a good price – it’s one of the underpinnings of the American way. Even if your classified ad clearly states a firm number, some buyers will push beyond it, asking, “What’s your best price?” Counter with, “How much are you willing to pay?” Have the buyer name a price, and work up from there. This way, you avoid mentioning a number that’s lower than what the buyer is willing to pay. Negotiation is an artful skill – but one very much worth mastering.
Once you and a buyer have agreed on a price, there are several ways for him or her to transfer the funds. The car title functions as the bill of sale, and there is a space on the back of the title to sign over rights and release yourself of liability. Only relinquish the title once you’ve received the funds. The new owner will take the title to the DMV to register the car and obtain new license plates. Believe it or not, some people still like to buy a car with cash, but most prefer something more accountable.
1. Certified Check
Do not accept personal checks from a buyer – ever. Ask the person to present a cashier’s check, wherein their bank guarantees the funds. And call the issuing bank to verify the legitimacy of the cashier’s check before signing over the title.
2. Wire Transfer
If you agree to a wire transfer, you typically will have funds delivered to your bank by the next business day. But do not sign over the car title until you have confirmed the bank has completed the transfer and the money is in your account.
3. Bank Check
If the buyer pays for the car with financing they’ve arranged earlier, funds for the car will come directly from the bank. Both you and the buyer should attend the closing on site. The buyer signs the loan documents to finalize the deal, and you sign the title to transfer ownership to the bank, which will stay in place until the buyer repays the loan.
4. Installment Payment
Buyers without cash or credit to apply for a bank loan may propose paying you in installments. In this case, you act as the bank. To protect yourself, order a credit check on the buyer from one of the three reporting agencies: Experian, TransUnion, or Equifax. And to be extra safe, it’s worth it to do a background check through such services as StarPoint or ScreeningWorks. You need written permission from the buyer to make this happen.
After you feel safe with the buyer, create or download a contract for car loan installments. Spell out the terms of the agreement, such as the vehicle price, payoff time, interest rate, monthly amount, and due date. Include all of the buyer’s vitals, even Social Security and driver’s license numbers. List a physical description of the car, as well as the vehicle identification number. Lastly, detail the recourse in place should the buyer default. Sign the contract before a notary public, then relinquish the keys to the car. Do not sign over the title at this time. You’re the acting lien holder, thus the title remains in your name. Sign the back of the title, but transfer ownership only after the buyer fulfills the agreement. This is a tricky, much lengthier, process, yet it can work well.
When selling a car, don’t forget to cancel your insurance. The buyer is now the official owner, responsible for all coverage. You’re not off the hook until you sign over the title, but once that happens and you have cash in hand, it’s time to look forward to purchasing your own shiny new car.
Have you successfully sold a car yourself? How was your experience?