Selling a Car
If you’re thinking about selling your current vehicle, you’ve got some decisions to make. For example, do you want to sell the vehicle to a dealer or to a private buyer? Do you want to put free advertisements up on the Internet, or would you rather pay for classified ads on car-specific websites or in car magazines. And these just represent the tip of the iceberg.
If this is the first time you’ve ever thought about selling a vehicle, we’ve got the top ten steps you need to follow in order to get the best price and have the best selling experience possible. And even if you have sold a vehicle before, take a few minutes to read though our straightforward and easy-to-follow list of steps — you might find something you missed before that could significantly increase the amount of money you make from your vehicle sale. The steps are as follows:
- Determine your vehicle’s market.
- Figure out your vehicle’s value.
- Decide if you are going to sell privately or to a dealer.
- Decide how you are going to advertise.
- Get the vehicle in tip-top shape.
- Get prepped for the showing.
- Show the vehicle to potential buyers.
- Negotiate your best price.
- Actually sell the car.
- Know your state’s specific requirements.
1. Determine your vehicle’s market.
The very first thing you need to do when choosing to sell your vehicle is to figure out who might want to buy it. Different vehicles have different markets of potential customers, and the better you understand who might want to buy your car, the better price you’re likely to get for it.
You can do some online research to figure out the kind of people who might be interested in your vehicle. For example, if your vehicle is a minivan, your best bet will be to find people who are parents of young children, as they’re likely going to be looking for something offering plenty of seating. If you’ve got a pickup truck, you might look for buyers who need the truck bed for their small business.
Don’t think just inside the box, however. Think about less obvious aspects of your market. If you’ve got a convertible, selling it in winter isn’t going to get you as strong a price as will selling it when the sun is shining. If you’ve got an older car, contemplate finding a car club where people like to fix up vehicles. The important thing is to really think about the right audience for your vehicle, because that’s the type of person who will be more likely to buy — and for a better price.
2. Figure out your vehicle’s value.
Your vehicle is unique. Even if thousands of the same vehicle make and model were sold the same year your vehicle originally was, your vehicle has specifics that impact its price. Before you choose a selling price for it, you need to know what aspects of your specific vehicle make a difference in that price.
So again, doing some research will help you figure out that answer. Things that affect your car’s price include mileage, optional extras (like sunroofs, iPod inputs, spoilers, etc.), the model year (cars that are older than 25 years may be considered “classics” and worth much more) and even the amount of repairs done on the vehicle. You can find common prices for vehicles through traditional car pricing guides (these days found online as easily as anywhere else), but recognize that these are only guides. Your goal is to figure out what a common asking price for your vehicle’s model and make are and then use that to determine what price you want to ask.
Recognize that if your asking price is significantly higher than the common price, your car had better come with some real value to merit that extra cost. Conversely, a price too far below the average can make a potential buyer worry that you’re hiding something that is wrong with the vehicle.
3. Decide if you are going to sell privately or to a dealer.
Once you have an idea of what the vehicle is worth, you need to figure out whether you’re going to sell it to a dealer or to a private buyer. The only real reason to sell a vehicle to a dealer is if you’re going to use the vehicle’s trade-in value toward the purchase of a new vehicle from that same dealer.
If you go the dealer route, expect that you will have far less negotiating capability than you will with a private buyer. Dealers look at the car pricing guides and then try and get the vehicle for 10 percent less than that amount (or better if they can get it). If you are intending to buy a more expensive vehicle, the dealer will be more likely to offer you the full value of the vehicle; if not, however, you may have better luck selling the car privately and using the money as a down payment on the vehicle you want to buy.
4. Decide how you are going to advertise.
Once you have your selling price, you need to decide where to advertise the vehicle. There are several general options to choose from — but feel free to think outside the box here as well. These are some common options:
- A “For Sale” sign: This is the most classic choice. You can simply put a sign in the window of the vehicle with your phone number. Make sure you put the vehicle in a location where your best audience is going to see it, such as a mall for families or near a large construction site if you’re hoping for a good pickup truck sale.
- Free classifieds: There are many websites that allow you to post an ad for free. Make sure you learn common acronyms and phrases to use here, such as “OBO” (Or Best Offer, meaning you’re willing to take the best price buyers offer) and “must sell” (meaning you intend to sell the car quickly, whatever the price). Also, remember to put your sale price in the ad. And don’t forget to actually sell the vehicle with your words. Make people want to buy it.
- Car websites: There are websites that allow you to post ads (some free, some paid) in categories specific to your vehicle type, make or model. Some sites also allow you to post actual listings for your vehicle, in which you can include pictures and specifics about the vehicle as you see fit. The advantage to sites like these is that you can directly target the audience you’re looking for; however, they can cost, so it’s only worth using the sites if you have a vehicle you think is worth that extra outlay of money.
- Friends and family: Sometimes you can find people you know who want a vehicle like yours. Going this route can make selling the car either very easy or very hard. Some people find it very easy to negotiate with friends and family, and some people find it very difficult to do. Only go this route if you are absolutely certain you won’t end up ruining a friendship or making Christmas parties a nightmare.
In all cases, make every effort to describe your car fairly and, at the same time, in its best possible light. You do not want car shoppers to show up expecting a 2012 BMW when you’re actually offering a 2000 Saturn, but you do want them to understand the loving care you have put into the vehicle so they realize they’re going to get a great buy.
Also, in general you want to set a price that’s an even number, rounded up to the nearest $500 or $1,000 level ($5,000 or $14,500, for instance). Private buyers have a strong tendency to negotiate prices in increments of $500 or $1,000, so setting your price in the aforementioned way sets you up for that negotiating. Along the same lines, you want to make sure that the price is slightly higher than you’re actually willing to sell the vehicle for in the end. The higher price allows you to let buyers negotiate while you still end up with the price you actually want in the end.
5. Get the vehicle in tip-top shape.
When you want to impress a date, you make sure you look your best, right? The same thing is true when it comes to selling a vehicle. Before you show it to anyone, make sure you’ve made it as appealing as possible. Here are some tips on how to increase the attractiveness of your vehicle:
- Wash the vehicle: This seems obvious but you’d be surprised how often people forget to do this.
- Clean the trash out of the vehicle: Yes, we all live in our cars, but when you’ve got a prospective buyer sitting in it, you want them to see it clean and ready for them, not covered in your old fast-food bags.
- Get the vehicle repaired: If you know the vehicle has an oil leak or needs new brakes, get it repaired if at all possible before you show it. That shows respect both for the vehicle and for potential buyers, and it can also allow you to increase the selling price in the process.
- Repair/paint minor scratches and dings: Just like the previous tip, fixing minor cosmetic flaws shows that you respect the vehicle and prospective buyers. Plus, it just makes the car look nicer, and that’ll increase the chance that someone will want to purchase the vehicle. Paint the entire vehicle if you can afford it, as well; that’ll make the car look beautiful.
- Clean the windows/reflective surfaces: Nothing makes a car look less appealing than a rear-view mirror that’s covered in fingerprints. Get some window cleaner and make it shine.
- Detail the vehicle: Put some wax on the vehicle and make the tires shine with tire coating. Anything you can do to increase the vehicle’s appeal is worth doing.
- Get a vehicle repair inspection from a mechanic: Even if you can’t pay for repairs on the vehicle, go to a repair shop and have a mechanic go over the vehicle top to bottom and write out a report for you. You can show this report to any potential buyer so they know exactly what they might have to do with the vehicle immediately after buying it. This is an absolute; buyers need to know if there are repairs that must be done on the vehicle before they buy it. In some states, not informing buyers of needed repairs can get you in legal trouble.
- Get necessary inspections/tag renewals: In some states, vehicles need inspections every year. In some of those states, you are required to have your vehicle inspected before you can sell it. Regardless of the legal requirements, if your state requires a yearly inspection, get it taken care of before you sell the vehicle. You’ll be doing the buyer a favor (and making it much more likely they’ll buy). Also, in some states license plates stay with the owner, and in others, the plates go with the vehicle. If you’re in a state where the plates stay with the vehicle, get them renewed before you sell the car. Again, you’ll be helping out the buyer and increasing the likelihood that you’ll actually sell your vehicle.
- Make sure you have the title: If you have lost the title somewhere, you need to get a replacement title before you sell the vehicle. Transferring the title is a requirement in every state, so this is absolutely necessary.
With all of these tips, the goal is the same: Make the vehicle as perfect as you can make it. The better it looks and drives, the less immediate work the buyer will have to do to make the vehicle acceptable. And if the buyer knows that your vehicle is essentially ready to go, the car’s monetary value and desirability will increase. If you don’t take the aforementioned actions, you simply won’t get as high a price for your vehicle — if you can get anyone to buy it at all. So make the effort and pay the extra cost if you can; it will be very much worth it in the end.
6. Get prepped for the showing.
You’ve figured out your price, posted your ads, made the vehicle look beautiful, and buyers are beginning to contact you. Now you need to decide how to show the vehicle to them. You’re ready to go, right? Not yet — there are some final crucial questions to answer before you show off your soon-to-be ex-vehicle.
Your first decision to make is, do you allow buyers to come to your home? Some people have no problem with this, while others are very uncomfortable with the idea. If you choose not to have potential buyers come to your home, set up an alternative location (such as a mall or church parking lot). Do recognize that the eventual buyer will get your address from the vehicle title. However, if you’ve reached the point where you’ve sold the vehicle, hopefully you’ve also determined that the person who has bought it is trustworthy.
That brings us to the next important question: How do you choose which buyers are trustworthy enough to show your vehicle to? There is no concrete answer here, but you should always trust your instincts. If the buyer seems shady in any fashion, inform them that the vehicle has already been sold and stop communicating with them. A real buyer is fairly obvious — they ask appropriate questions about the car, may ask about possible negotiating room on the vehicle price, and are willing to bring both proper identification and payment options for the vehicle when they see it.
Don’t be afraid to ask questions to help you determine whether the prospective buyer is legitimate, such as what they might need the vehicle for and what sort of job they have. But be careful here — you don’t want them to become cautious of you because you are being too cautious about them. Ultimately, you simply need to be aware that not everyone who responds to your ad may be legitimate. Keep your alertness factor up and you’ll be fine.
Finally, you need to be ready with your plans for negotiation. What forms of payment are you willing to take for your vehicle? The most common choices are cash or a cashier’s check. How much are you willing to negotiate down on the vehicle? You should be absolutely clear about this in your own mind before the first buyer arrives.
Another question to ponder: Are you willing to let buyers test-drive your vehicle? Most people are going to want to take a test drive, so you need to be ready to ride with them. Some will even legitimately want to take the vehicle home for a night and test it out, so you need to be certain whether you are willing to allow them to do so (and make sure you check your vehicle insurance’s liability issues before giving the green light for someone to do this).
7. Show the vehicle to potential buyers.
Once you’ve made some decisions and done some critical preparation work, it’s time to show your vehicle to buyers. Here are some tips for what to do once they’ve actually arrived to check out the goods:
- Be ready to answer their questions about the vehicle honestly: These can include queries about recent repairs, how the vehicle drives, its repair history, any crashes it might have been involved in; whatever they ask, make sure you simply answer the questions honestly. Note that this does not include answering questions about yourself, whether you have a boyfriend/girlfriend, or anything else personal. Remember — if something seems strange about the buyer, stop the showing immediately.
- Have your VIN ready: Many savvy buyers will ask for the vehicle’s VIN (Vehicle Identification Number) so they can get a report on the vehicle, make sure that you legally own the vehicle, and make sure that its odometer reading is accurate. Be ready to give the VIN to them and do not be insulted if they tell you they will get back to you after they get the vehicle report. In fact, be happy — a careful buyer is also a buyer who is actually interested in the vehicle.
- Test drives: As mentioned before, most buyers will want to at least test the vehicle out. Be ready to take the drive with them (and navigate, if they aren’t familiar with the area).
- Answering questions about other buyers: In an effort to determine how much they can negotiate, some prospective buyers will try to find out whether there are other people looking at the vehicle. How you answer this question is up to you, but be ready for it.
Showing a vehicle to a buyer (who you have likely never met before) can be stressful. Just remember that it’s equally so for them and do your best to remain calm and professional. And smile — that actually makes a big difference, especially if you do so while talking about how much you have loved this vehicle.
8. Negotiate your best price.
- Be willing to negotiate: Unless there is an absolutely vital reason you must sell your vehicle for your asking price, expect there will be some negotiation. And letting your price drop a little will help the buyer feel that they got a good deal, so there’s actual benefit in letting it happen.
- Be willing to walk away: If your buyer states the price they are willing to pay and adds, “Take it or leave it,” and that price isn’t high enough for you, be willing to walk away. You might get the buyer back the next day offering you the price you really want — and even if they do not return, you want to sell your vehicle for the price it’s worth. Anything less and you are selling yourself short.
- Be polite and reasonable: If the price your buyer offers is too low, point out reasons why the vehicle is worth more. Make sure, however, that no matter how the negotiation goes, you remain calm and reasonable; you’re likely to get a higher price by doing so, and losing your cool over a vehicle is not an effective negotiating technique.
9. Actually sell the car.
When the buyer’s price and your price match, you can proceed with the sale. Now you need to make sure that you cover all the necessary requirements to make that sale happen, including the following:
- Transferring the title: You will need to transfer the vehicle title to the new owner. In most states, to do this you and the new owner simply need to sign the existing title and note on it the current odometer reading, but double-check your state’s specific requirements.
- Dealing with liability: The moment you have sold your vehicle, you should no longer be liable for anything the new owner does with it. However, there is a length of time before the state will know that you have transferred the title. So it is in your best interest to get from your state’s motor vehicle department a “release of liability” form, on which you and the new owner can note exactly when you transferred ownership of the vehicle. This protects you in the event the owner immediately crashes the vehicle. Most state motor vehicle department websites have this form available for download and printing online.
- Bill of Sale: Many states require a Bill of Sale for the new owner when they buy a vehicle; it’s in your best interest to have one for yourself, as well. A Bill of Sale simply lists exactly what the car was sold for, its make/model/VIN, whom it was sold to and what the date of the sale was. You may need this for tax purposes and to give to your insurance company, so make sure you get one. Some states have a specific form to download, but most simply accept a printed document written up on a computer.
- Informing your insurance company/state: Make sure you inform your insurance company immediately after you sell the vehicle. It will likely ask for a copy of the Bill of Sale, so be ready to send one to it. This also protects you from liability issues (as well as immediately cancels your insurance policy with the company so you can stop paying it; you might even end up getting a refund). Some states require you to inform them immediately as well, so check the specific requirements for the state in which you reside.
- Deposit the money: If you have taken cash or a cashier’s check for the vehicle, you can deposit the money whenever you would like. If you have taken a personal or business check, however, deposit it immediately — and make certain that you have all the accurate information from the buyer in case something is wrong with the check and it bounces. This potential bouncing-check problem is why cash or a cashier’s check is the common form of payment in a private sale; if you have chosen to go a different route, make sure you are certain the money is actually there as fast as possible.
10. Know your state’s specific requirements.
While the basics for selling vehicles have been covered here, there are some states with very specific rules — and some of them can be complicated. So please make certain that you know the requirements for your state before you sell your vehicle. Finding out after you have sold it that you have made a massive mistake can not only cause headaches and stress — it can actually land you in financial and legal trouble. Read up on your state’s specific requirements and double-check with your state’s motor vehicle department that the information you have read is accurate and current. Once you’ve done that, you can sell your vehicle with confidence.