6 steps to selling your car
Whether you’re trying to unload a clunker or sell a car in pristine condition, the DIY method usually offers more potential cash than a trade-in. The key is to master the legwork and the logistics of making the sale.
Here’s a six-step process for selling your own car.
- Size up the car market.
- Get the car ready for a close-up.
- Pick your price and negotiating strategy.
- Get the word out.
- Protect yourself from the buyer.
- Make the sale official.
Size up the car market
Web sites like Kelley Blue Book, Edmunds.com, AutoTrader.com and Cars.com can estimate your car’s market value using search parameters that include make and model, mileage, condition and even ZIP code. For example, Kelley Blue Book makes adjustments for how different climates typically wear on a car, says Kelley Blue Book’s executive market analyst James Bell.
According to Bell, two big factors driving used car values are fuel efficiency and timing. “If you have a 3- or 4-year-old SUV, then the market’s going to be pretty tough on you,” he says. And he notes that even smaller cars “are not quite the rock stars that they once were” when gasoline prices were topping $4 a gallon.
Get the car ready for a close-up
Consider whether your car could use some cosmetic fix-ups or minor repairs before potential buyers see it.
“If I’m a buyer and I come and look at a car and see that the rear brake light doesn’t work and the headlight is out, I’m going to wonder what else is wrong with that car,” says Mark Scott, spokesman for AutoTrader.com.
Even if everything is in humming condition, you’re unlikely to attract a great offer if the car looks and smells as if it belongs on the scrap heap.
“Surprisingly, a lot of people selling their cars don’t bother to clean them,” says Patrick Olsen, editor in chief of Cars.com.
Pick your price and negotiating strategy
Phil Reed, senior consumer advice editor at Edmunds.com, offers this tip: “You’ve got to set an asking price that’s going to be low enough to entice people to call, but also leave you room to negotiate a little bit.”
Scott recommends starting at about 10 percent or 15 percent higher than what you think the car is worth. The more time you have to sell, the more ambitious you can be about pricing. If the car hasn’t sold in a few weeks, you can drop the price by a couple of hundred dollars, he says.
Get the word out
You have a load of options for advertising your car, including newspaper classifieds, local ad circulars, automotive tabloids, Craigslist.org and a host of car-selling Web sites.
These days, the Web is driving the automobile market, with the majority of new and used car purchases initiated online, Bell says. Your location may limit your ability to purchase ads on some sites.
And what about the old fashioned “for sale” sign in the windshield?
“I’ve bought cars that I found that way,” Reed says. “The idea, of course, is that if it catches somebody’s eye, they can at least do an outside inspection right there. And it costs nothing.”
But be aware that some local laws prohibit you from displaying your car by parking it on the side of the road. If it’s legal and you decide to give it a try, attach information about your price and the car’s features for interested passers-by.
Anytime you’re going to be meeting with strangers and handing them the keys to your car, some safety precautions are in order. Meet in a well-lit, public place. If possible, take a friend along on the test drive for extra security.
If a prospective buyer wants his own mechanic to look at the car, go with him, Olsen advises. Don’t just hold his driver’s license. “There are plenty of people who pull scams that way,” he says. “They hand you something that they say is their license, and it isn’t really, and you lose your car.”
While cash is the ideal form of payment, you should probably be prepared to deal with a cashier’s check or money order. To verify its legitimacy, have the buyer meet you at the bank on which it is drawn.
Make it official
When you’re ready to close the deal, you’ll have a number of legal and administrative details to tend to. If you still owe money on the car, you’ll need to contact the bank or other lien holder to find out how to proceed. In most cases, you’ll have to pay off the note before you can obtain the title and sign it over to the buyer. You might get a jump start on the process by consulting with your lender as soon as you are ready to put your car on the market.
Once you’ve sold the car, contact your insurance company to have it removed from the policy, but not before you’ve notified your department of motor vehicles of the sale. Canceling your coverage prematurely may result in suspension of your license for having an uninsured, registered vehicle.
“Sellers should know what documents their state requires them to provide the buyer and what documents the state requires for itself at the end of that transaction,” Olsen says. “You don’t want to get hit with some kind of tax penalty or other violation because you didn’t spend half an hour talking to someone at the DMV about what you need to do.”