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Selling your own vehicle instead of trading

StreetWise Auto Buying Resources

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Selling your old vehicle instead of trading

When you look at a used-car price guide such as NADA or Kelly Blue Book, you'll usually see average retail value and average trade-in value. Essentially, the difference between the two is the average dealer margin. That difference covers what the dealer spends on advertising the vehicle, preparing the car for sale, and profit. If you have a car to trade, you could keep some of that margin by selling it yourself.

Before you take that on, consider this. The biggest advantage of trading your car at a dealership is convenience. Selling your own car can be a time-consuming hassle and, depending on the value you put on your own time, it can be worth some of the vehicle value you'll lose by trading. You can maximize what you'll get for your trade by learning how to negotiate effectively.

Be honest with yourself, too. If your car is reliable, in good condition, and not very old, you could come out ahead by selling it yourself. People are looking for a good value, but they will expect to pay less to a private owner than a dealership. But if your car is old, rusty, damaged, has mechanical problems, or has been in an accident, it will be much harder to sell. A trade-in or donation to a charity may be the fastest, most trouble-free way to get it off your hands.

Here's the way to sell those wheels yourself.

Preparing to sell your vehicle

  1. Clean it up.

    Most buyers pay more attention to how a vehicle looks than to how it runs. So even if your old vehicle's engine and drive train are in great shape, you're throwing away money if the vehicle doesn't look as good as you can make it. Clean it inside and out. Take cleaner and a toothbrush to the dashboard and headliner, for instance, and outside to the grill, the exterior trim, the wheels/wheel wells. Use bug-and-tar remover. Touch up small nicks and scratches if you can do so unobtrusively. Wash, wax and buff to a shine.

    If you're too busy to clean every inch of it yourself, have the car "detailed" at a cleaning center. Experience shows that a used car that is spotless, from under the hood to the trunk, always sells for more money.

  2. Fix all the minor problems

    If the radio or air conditioning doesn't work because of a fuse, for example, change it. If the floor mats are really worn, get new ones. Worn belts and hoses? Change them. Have the oil changed.

  3. Determine an "asking" price

    1. Search dealer advertisements for cars like yours, and make your asking price close to theirs. If you still owe money on your vehicle, call your lender for the payoff; your asking price needs to be high enough to pay off your loan and provide a profit. (If you discover that you owe more than your vehicle is worth retail, consider not selling until you are no longer "upside down.") Most buyers expect to negotiate the price down a bit so your asking price should have some negotiation room in it, unless you are willing to say your price is "firm" and stick to that.

    2. Determine the amount a dealer would give you for your old car if you traded it—the vehicle's true wholesale value. There's only one way to tell exactly what your car is worth in your local market: After you've cleaned the car up, drive it to three or four used car operations at new car dealerships or stand-alones and tell them you are thinking of selling your car outright. Ask them to put a “buying” figure on your car. The highest offer you get is your car's "wholesale" value. If you don't have the time or desire to do this, then you can get an average price using an online pricing guide (such as NADA or Kelly Blue Book) but remember these are only “average” wholesale prices and don't necessarily accurately reflect the true value of your particular vehicle in your specific market. Remember, every used vehicle is one-of-a-kind.

    3. Again, if you still owe money on your auto loan, call your lender and get the payoff. Do you owe more on your vehicle than it is worth wholesale? If so, then the minimum price you accept must cover your loan payoff and the profit you desire.

    4. Determine the minimum profit you want to get if you sell it yourself. That profit probably should be at least $500 more than your old car's wholesale value. (If you're making less than $500 for trying to sell it yourself, it may not be worth the effort unless you owe more on your loan than the vehicle's wholesale value. You decide). Write a very short advertisement: phrases like "One owner," "very well-maintained" are what work. Use car ads in the paper that catch your attention to help you write it. And always include the phrase "no trade." Don't forget your contact information.

  4. Place an ad

    You might try free listings first. (You can even make a nice ad on your computer and post it on work and community bulletin boards.) Online listings can work great, too—just be sure that you check out any site's privacy policy well. If you are willing to pay a modest fee, you can list your car online with multiple sites through a reputable site such as autotrader.com. If you wish to pay for an ad, most newspaper classifieds also have online listings.

  5. Get ready to sell

    Gather together your vehicle's records. If you have the service records, that can be a real selling point. You may want to purchase a vehicle history report on the vehicle to show it's not been in an accident, etc.

  6. Get a bill of sale ready

    Go ahead and fill in the make, model, year, and VIN number of the vehicle and your information. (Even if you have the title, we recommend also using a simple bill of sale for extra clarity and protection in the transaction.) Check with your state's Department of Motor Vehicles to see if they have specific forms or steps for use in the transfer. Most states have such information online.

    Locate the title, if the car is paid for. If you still owe money on your auto loan, the lender has the title; you can't get it until you pay off the note. Call the lender and get the payoff, tell them you are planning to sell the car yourself and ask where and how you can most conveniently pay off the loan and how quickly they can give you the title.

Showing the car

If you have a desirable vehicle, have determined competitive asking price, and have written a good ad, you're ready to field inquiries from potential customers.

When people inquire about the car, take time for a little preliminary conversation if possible. You can both encourage prospects who seem a possible match for your vehicle and discourage those that sound like they are wasting your time or for some reason send up a red flag.

If potential customers want to see the car, make an appointment for them to come to you, don't go to them. If you don't wish them to come to your home, have them come to your office parking lot before or after work or meet at a local coffee shop. You may also want to have someone else with you when you receive them.

Be prepared to present the vehicle's good points. If it gets great mileage, say so. If you changed the oil religiously and performed all the maintenance recommended by the manufacturer, say so. If there's an "up side" to apparent detractions (like high miles), share that. For example, if the vehicle has high mileage, but they were mostly highway miles, highway miles cause less wear and tear on the engine than stop-and-go town driving. Be prepared to answer questions about the vehicle's condition honestly.

Don't let strangers drive your car without you or your representative with them. It's a good idea to let someone know where you are going and with whom. And check the prospect's driver's license and insurance before you let them drive at all.

Many buyers (particularly if they are smart) will wish to have the vehicle checked out independently by a mechanic. Although the buyer should pay for this, you may offer to drive the vehicle to the diagnostic service. It doesn't hurt to have handy the name of a nearby good mechanic or a mobile diagnostic service (they come to the car and check it thoroughly).

Negotiating the sale

When a potential buyer is ready to make an offer on your vehicle, prepare to negotiate. In fact, the shopper may have been throwing out hints or asking questions about price and your willingness to come down while they look at and test drive the car. In the StreetWise Auto Buying Guide, we show you as a buyer how to take control of the bargaining. Smart shoppers for your vehicle will try to do that, too. But you are now the seller. You want to keep control of the negotiations, too. That's why it's important that you know the value of your vehicle, your payoff (if any), the minimum price you will take, and the profit you want to make.

Most used vehicle buyers these days have access to online pricing guides. Expect them to have checked the average wholesale and retail values of the vehicle you are selling. Some guides also give estimates of what buyers ought to pay if they are buying directly from a private owner, not a dealership. A smart buyer will typically open with an offer that's well below your asking price and probably below what you want for the car.

You should be prepared to give a little (unless your price is "firm"). But don't respond to their low offer by adding a figure to it. Instead, counter their offer by naming a discount from your "asking price." Here's how the conversation might go if you've got an asking price of $11,000 on that family sedan you're selling but you'd be real happy with $9,800 and would go to $9,500.

Buyer:    I'd like the car if you could come down to $8300. I think that's fair value for this car and its condition. (Buyer is about $300 under the wholesale $8600 a local dealer offered you when you shopped its value).

You    (with a friendly laugh): I'm glad you're interested but my price of $11,000 is fair. The car's in terrific mechanical shape and looks great. But I can come down a little, let's say $10,700.

Buyer:    Yeah, it is in good shape, but it's got high miles. I wouldn't want to go that high. What's the lowest price you'll take?

You    (dodging this loaded question): What did you have in mind? (Don't give away your bargaining power. Put the ball back in their court.)

Buyer:    Well, I've checked out the prices of these models pretty thoroughly, don't you know, and something in the range of $8800-9000 might be close.

You:    If you've shopped around then, you know that local dealers are asking around $11,300 to $11,600 for these models or similar vehicles. So coming off my price to $10,700 is fair. Of course, I want both you and me to come out ahead in the deal. We'd need to be closer than $9000, however—more in the range of $10,200.

You get the idea. Continue negotiating until the buyer offers an acceptable figure. If you do hit your pre-determined lowest acceptable figure and the buyer does not agree, then stand firm. Just tell them they'll have to look elsewhere, that you really can't sell for lower than that. And let them walk. If the buyer really wants the vehicle, they may call you back and meet your price—that happens more often than you might expect.

StreetWise Warning: Particularly when selling your vehicle online (though it can happen in face-to-face sales), you must stay alert for fraudsters. If someone agrees instantly to your asking price, then says they want to send you a certified check or money order for more than the price (an overpayment) and have you send them the balance, say "no sale." This variation on the "Nigerian Scam" has spread widely. In another variation, they may ask for your checking account number so they can "wire the money" to you. Instead, they will steal your money and possibly your identity. Your best protection: If any one wants you—the seller—to give them—the buyer—money or your personal financial information, don't do it. Also if you are considering using an escrow service, check the service out thoroughly, do not automatically accept the one proposed by the buyer. Unfortunately escrow scams abound, too.

Closing the sale and transferring ownership

When you agree on a sale price, take the following steps to seal the deal and transfer ownership of the vehicle.

  1. Let the buyer know, if you haven't already, that you can accept only cash or a certified check in payment. Don't take personal checks. Accept only cash or a certified check. If you accept a certified check, insist that the check be drawn on a bank with a local branch and accept it only during banking hours. If the buyer can't or won't meet these terms, don't sell your car. (If your buyer is going to pay a large sum in cash, you might wish to conclude the sale in the office of your credit union or other financial institution, so you can deposit it immediately. Of course, don't show your personal information to the buyer.)

  2. Make out two copies of a bill of sale that identifies the vehicle (make, model, year, VIN#), sale price, and buyer and seller (with addresses/phone numbers). You will also eventually transfer the title to the buyer, but not until you have your money and, if you have a loan, have paid it off and received the title from your lender.

  3. Make an appointment with the buyer to receive payment, complete the title transfer, fill in any other forms your state requires (such as a smog statement) and turn over the vehicle.

  4. If the buyer pays by certified check, when you receive it, call the issuing bank and verify the check before turning over your car. If the check is good, fill out the title to complete the transfer.

  5. If you must pay off your auto loan before you can receive the title and transfer it to the buyer, you may be able to complete the sales transaction with the buyer at your lender's office. If not (perhaps your lender is out-of-state), then you and the buyer can go to the Department of Motor Vehicles which will issue the buyer a temporary permit to operate the car. Make arrangements with the buyer to complete the title transfer when you've received it; the buyer will need it to properly register the car in his/her name.

  6. Handle the transfer or removal of your tags/registration in accord with your state's laws. After the sale is complete, discontinue the insurance on the car you no longer own. (Of course, you have your new wheels insured, right?)

Is all this work worth it?

You decide. On average during a strong economy, fifty percent of the people who try to sell their car themselves succeed, and those usually make at least a thousand dollars more than if they had traded it. How hard do you work to earn a thousand these days? It doesn't hurt to try selling your car yourself.


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