Here are 10 simple steps that will help you turn your used car into cash. Everything from pricing to advertising and negotiating is covered in this short, easy-to-follow process.
Steps to Selling Your Car
Know the Market
Price Your Car Competitively
Give Your Car “Curb Appeal”
Where to Advertise Your Car
Create Ads That Sell
Showing Your Car
Negotiate for Your Best Price
Finalize the Sale
After the Sale
Step 1: Know the Market
Is your car going to be easy to sell? Is it a hot commodity? Or will you have to drop your price and search out additional avenues to sell it?
Here are a few general rules to answer these questions:
Family sedans, while unexciting to many, are in constant demand by people needing basic, inexpensive transportation.
The sale of convertibles and sports cars is seasonal. Sunny weather brings out the buyers. Fall and winter months will be slow.
Trucks and vans, used for work, are steady sellers and command competitive prices. Don’t underestimate their value.
Collector cars will take longer to sell and are often difficult to price. However, these cars can have unexpected value if you find the right buyer.
Your first step is to check online classified ads to see how much other sellers are asking for your type of car. Keep in mind that dealers will have different prices than private party listings. The eBay.com classifieds and other Internet sites allow you to search with specific criteria. For example, select the year and trim level of your car and see how many similar cars are currently on the market. Take note of their condition, mileage, geographic location and selling price so you can list your car at a price that will sell it quickly.
Step 2: Price Your Car Competitively
Once you have surveyed the online classified ads, use the Edmunds Appraisal tool to determine the fair value of your car. Edmunds.com adjusts its TMV prices for mileage, color, region, options, and condition.
There are always some exceptions to the rules of pricing, so you should follow your intuition. And be sure to leave a little wiggle room in your asking price. Ask for slightly more money than you are actually willing to accept. If you want to get $12,000 for the car, you should list the car at $13,500. People tend to negotiate in big chunks ($500-$1,000) rather than small increments ($100-$200). That way, when a person makes you a lower offer, it will be closer to your actual price, rather than below it.
You may have noticed how creative used-car dealers get in pricing cars. Their prices usually end in “995,” as in $12,995. Are we not supposed to notice that the car basically costs $13,000? There is a lot of psychology in setting prices. A product that doesn’t sell well at $20 might jump off the shelf at $19.95.
On the other hand, as a private party seller, you don’t want to look like a car dealer. Therefore, you might want to take a simple approach and set your price at around figure such as $14,000 or $13,500.
Step 3: Give Your Car “Curb Appeal”
When people come to look at your car, they will probably make up their minds to buy it or not within the first few seconds. This is based on their first look at the car. So you want this first look to be positive. You want your car to have “curb appeal.”
Before you advertise your car for sale, make sure it looks clean and attractive. This goes beyond just taking it to the car wash. Here is a to-do list to help you turn your heap into a cream puff:
Wash and vacuum the car and consider having it detailed.
Make sure your car is both mechanically sound and free from dents, dings, and scrapes.
Consider making low-cost repairs yourself rather than selling it “as is.”
Shovel out all the junk from the inside of the car. That way, when a prospective buyer goes for a test-drive, they can visualize the car as theirs.
Wipe the brake dust off the wheel covers and treat the tires with a tire gloss product.
Thoroughly clean the windows (inside and out) and all the mirrored surfaces.
Wipe down the dashboard and empty the ashtrays.
Have all your maintenance records ready to show prospective buyers.
If the car needs servicing or even a routine oil change, take care of that before putting it up for sale.
Have your mechanic check out the car and issue a report about its condition. You can use this to motivate a buyer who is on the fence.
Order a vehicle history report and show it to the buyer to prove the car’s title is clean and the odometer reading is accurate.
Step 4: Where to Advertise Your Car
Now that your car is looking great and running well, it’s time to advertise it for sale. In the past, people advertised inexpensive newspaper classified ads. But now, online classified ads are the preferred method, not only for convenience but also because they have a wider geographical reach.
Here are the main markets for advertising used cars:
Web sites: AutoTrader.com, Cars.com, Craigslist.com, and eBay Classifieds are the most popular. Craigslist and eBay classifieds are free. The others are not.
Social media: Use Facebook and Twitter to let your circle know you are selling your car. Ask your contacts to spread the word.
Peer-to-peer sites: Companies such as Carvana, Tred, and Zipflip connect buyer and sellers and are a growing presence in the used-car marketplace online. Each operates a little differently, so check the sites for details of their services. These can include car inspections, warranties and return policies for buyers.
Message boards: Many online car forums have classified sections in which you can list your car.
Word of mouth: Tell your friends, co-workers, and family.
The car itself: It’s old-fashioned, but putting a “For Sale” sign in the car window can be an effective way to sell it.
One last word of advice about advertising: if you run a classified ad, be sure you are available to take phone calls — and texts — from possible buyers. Many people won’t leave a message for a return call. So answer the phone or reply quickly to a text — and be polite. Creating a good first impression is the first step in getting buyers to see the car in person.
Step 5: Create Ads That Sell
Think about what you are telling people when you write your ad. Little words convey a lot. Besides the price, your ad should also include the year, make, model and trim level of the car you are selling along with the mileage, color, condition, and popular options.
When creating “For Sale” signs or putting an ad online, you have an opportunity to show how eager you are to sell the car. Do this with the following abbreviations and phrases:
Must Sell!: This often means the seller is leaving town and needs to dump the car at a fire sale price.
OBO: This stands for “or best offer” and it indicates that you are willing to entertain offers below the stated price. This usually means you are eager to sell the car.
Asking price: This also communicates the feeling that you will negotiate, but it is one notch below OBO on the eagerness scale.
Firm: This word is used to rebuff attempts to negotiate. It indicates that you aren’t in a hurry to sell the car — you are most interested in getting your price.
Step 6: Showing Your Car
There are many unexpected bumps in the road that can arise while selling a used car. These will be handled easily if you are dealing with a reasonable person. So, as you are contacted by prospective buyers, use your intuition to evaluate them. If they seem difficult, pushy or even shady, wait for another buyer. With the right person, selling a used car should be simple.
Some sellers feel uncomfortable about having buyers come to their house to see the car. However, you can generally screen buyers on the phone. If they sound suspicious, don’t do business with them. If you don’t want people knowing where you live, arrange to show the car at a park or shopping center near your home. However, keep in mind that people will eventually see your address when you sign the title over to them.
Keep in mind that when you sell your car, people will also be evaluating you. They will be thinking, “Here’s the person who’s owned this car for the past few years. Do I trust him or her?” Buyers will probably be uneasy about making a big decision and spending money. Put them at ease and answer their questions openly.
Potential buyers will want to test-drive the car. If in doubt, check to make sure they have a driver license. Ride along with them so you can answer any questions about the car’s history and performance. Also, they may not know the area so you might have to guide them.
Some buyers will want to take the car to a mechanic to have it inspected. If you have an inspection report from your mechanic, this might put their doubts to rest. However, if they still want to take the car to their mechanic, this is a reasonable request. By now, you should have a feeling for the person’s trustworthiness. If you feel uncomfortable or have reason to think they will steal the car, decline the offer or go along with them.
Be ready for trick questions such as, “So, what’s really wrong with the car?” If you get this, refer them to the mechanic’s report or invite them to look over the car more carefully.
Step 7: Negotiate for Your Best Price
If a person comes to look at the car and it passes their approval after a test-drive, you can expect them to make an offer. Most people are uncomfortable negotiating, so their opening offer might take several forms.
“I like the car, but…” This is the softest way to negotiate on the price. They may not even state that the price seems too high. If they say, “I like the car, but…” and then lapse into an uncomfortable silence, you might consider an appropriate response. If you really want to move the car, you could say, “How much would you be willing to pay?”
“What’s your best price?” This is a more direct way to probe the seller to find out how much he or she will come down. If you get this from a prospective buyer, don’t seem too eager to reduce your price.
“Would you accept…?” Now we’re getting somewhere. This buyer has thought it over and is making an offer. But the offer is being presented in a polite manner designed to allow for a counter offer.
“Take it or leave it.” This buyer is making an offer that supposedly leaves no room for a counter offer. In reality, this buyer might be bluffing. Still, they are sending a message that they are close to their final price. The only way to know for sure whether it really is a “take it or leave it” offer is to leave it — and let them leave. They may return tomorrow ready to pay your price.
The above are just a few of the openers you might encounter. Think of your responses ahead of time so you won’t be caught unprepared. In general, it’s a good idea to hold to your price when your car first goes up for sale. If you don’t get any buyers right away, you’ll know you have to be flexible about the price.
If you post an online ad you might get people trying to negotiate via e-mail. The problem with this is that they haven’t even seen the car yet. If you discount the price by e-mail, they may ask for another price reduction after they’ve inspected it. Instead, respond by saying, “Come see the car first and then we can discuss the price.”
Step 8: Handling Complications
In some cases, you might reach an agreement with a buyer that is contingent on performing repair work on the car. This can lead to misunderstandings down the line, so avoid this if you can. The best thing to do is have your car in good running order while being fully aware of any necessary repairs. If you state clearly in your ads that the car is being sold “as is,” you can refer to this statement when it’s time to close the deal.
Still, a trip to the prospective buyer’s mechanic might turn up a new question about the car’s condition. What to do?
This must be handled on a case-by-case basis. If the repair is needed and you trust the mechanic’s assessment, you could propose reducing the agreed-upon price by all, or part, of the amount for the repair. If the repair is questionable but the buyer is insistent, split the difference, or have the car taken to your mechanic for further evaluation.
Remember, the older the car, the more a mechanic is likely to find. At some point, you have to draw the line. You may have to say to the buyer, “True, this work could be done. But the car drives well as it is. And the proposed repair isn’t addressing a safety concern.” After all, a used car — particularly an old one — isn’t expected to be perfect.
Step 9: Finalize the Sale
Rules governing the sale of motor vehicles vary from state to state. Make sure you check with the department of motor vehicles (DMV) in your state and keep in mind that much of the information is now available on DMV Web sites.
When selling your car, it’s important to limit your liability. If someone drives away in the car you just sold and they get into an accident, can you be held responsible? There are two ways to deal with this concern.
Once you have the money from the sale (it’s customary to request either cash or a cashier’s check), record the odometer reading and sign the car’s title over to the buyer. In some states, the license plates go along with the car. A new title will be issued and mailed to the new owner. Additionally, in most states, a release-of-liability form can be downloaded from the DMV Web site or filled out online. This establishes the time the car left your possession.
But what if you still owe money on the car, and the bank is holding the title? One way to deal with this is to conclude the sale at the bank where the title is held. Call ahead and have the title ready. Then, once money has changed hands and the bank has been paid the balance of the loan, sign the title over to the buyer.
In some cases, however, an out-of-state bank might hold the title. In this instance, we recommend you go with the buyer to the DMV and get a temporary operating permit based on a bill of sale. Then, after you pay off the balance of the loan with the proceeds from the car sale, have the title mailed to the new owner. Sign it over to the new owner and the transaction is complete.
Finally, remember to contact your insurance agent to cancel your policy on the vehicle you have sold (or transfer the coverage to your new car).
Step 10: After the Sale
In most states, the condition of a used car for sale is considered “as is” and no warranty is provided or implied. Therefore, if the car breaks down after you have sold it, you are under no obligation to refund the buyer’s money or pay to have it repaired. If you have sold a car to someone who took it for inspection at a garage and the mechanic found nothing wrong with it, you have done all you can to protect yourself and the buyer.
Be open about the condition of the car before the sale as well as timely and complete in transferring DMV paperwork after the sale. Doing everything correctly when you sell your used car will give you peace of mind when you are done.
When done correctly, selling a used car can be a win-win situation. You have turned your used car into cash and provided reliable transportation for the next owner. Focus on the benefits to both parties and you are likely to have a smooth and profitable experience.