How to sell your used car in 8 steps
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The demand for used cars is high due to a chip shortage prompted by COVID-19. Though that shortage is easing and may even come to an end this year, many auto manufacturers continue to produce fewer vehicles than they normally do. That means dealers still have lower levels of inventory.
It’s good news, however, if you happen to be selling a used car, as you’re still likely to have more than a few potential buyers. But before you post an ad online, there are some steps you should follow to get top dollar for your ride.
8 steps to selling your used car
When selling an asset as valuable as a car, you want to secure the best price possible. Invest in cleaning your car before listing it for sale, take the time to research an appropriate sales price and know how to negotiate effectively.
1. Choose which way to sell your car
There are three ways to sell your car:
- Trade it in: Trading in your car only works if you’re looking to purchase a vehicle from the dealership. It’s convenient, as you won’t have to market the vehicle to potential buyers. The downside is you probably won’t get as much for it as you would from a private sale.
- Private sale: You’ll typically get more for your ride if you sell it on your own. However, you will have to do the legwork to find the right buyer and negotiate a concrete sale price.
- Dealership: Many dealerships will give you a free, no-obligation cash offer for your vehicle. It’s fast and simple, and you’ll have a set period to decide whether to redeem it.
- Car buying websites: Car buying websites like Shift and AutoNation promise to make an offer on your car within minutes. You’ll provide some required information about the vehicle’s make, model, color and mileage. You’ll also need to upload photos. These companies provide cash quickly for your vehicle, but they often charge service fees that eat into your profits.
2. Gather the necessary documents
You can’t sell your vehicle to a dealer or private party unless you have these documents on hand:
- Paperwork from the original sale of the vehicle.
- The vehicle’s title.
- Any service records available.
If you’re missing any of these documents, wait until you have them on hand to sell your car. Otherwise, you could face complications when trying to finalize the transaction.
It’s also a good idea to have emissions test documentation available if you live in a state where these tests are required. In addition, if there are warranties that still apply to the vehicle, having this paperwork on hand is also important. You may even fetch more for a vehicle that is still covered by warranties.
3. Prepare your car for sale
Once you’ve decided how to sell your car and gathered the necessary paperwork, it’s time to prepare it for the market. Ideally, you want to spruce up the exterior and interior of the vehicle to make it shine for potential buyers.
Get your car professionally detailed or spend some time vacuuming and shampooing the carpets, cleaning the mirrors, washing the exterior, applying wax if necessary and making the tires shine.
Also, take your vehicle in for an oil change. If your tires or brakes are nearing the end of their useful life, now is the time to have them replaced. You should have the mechanic swap out any burned-out lights and windshield wipers that don’t work correctly. And plan to fix cracked windshields, scratches or dents.
4. Set the right sales price
If you are planning to sell your used car to a private party, pricing is a big deal. A figure that’s too high could turn potential buyers off and selling for too low means you will get less than you should. So, you want to do your research to ensure you price the car right, while leaving a little wiggle room for negotiations.
You can use several tools to determine your car’s current value. Use the “My Car’s Value” feature from Kelley Blue Book or refer to Edmunds to get an idea of your car’s worth. Or you can use Autotrader or refer to classified ads to search for similar listings in your local area.
5. Get the word out
Tell everyone in your network that you are selling your car and ask them to spread the word. You can also post on social media or advertise on sites with a used car marketplace — such as Autotrader, Kelley Blue Book or Cars.com — or in the local newspaper.
When creating the ad, include photos that capture multiple angles of the car’s exterior, interior and what it looks like under the hood. The ad should also mention the year, make and model of the vehicle, its current condition, the asking price and acceptable forms of payment. Also, include features that make it stand out, like an extended warranty, fuel-efficiency rating or heated seats, and why you want to sell the vehicle.
6. Come ready to negotiate
To prepare for negotiations, whether you’re selling privately or to a dealership, take your car to a few dealers and obtain offers. Use this information and what you found researching your car’s value on sites like Kelley Blue Book or Edmunds to inform your negotiations with potential buyers.
You’ll want to come to the table with the lowest price you’ll accept in the back of your mind and be prepared to counteroffer.
Start the conversation off by letting the potential buyer throw out a number. If the figure works, it’s up to you to decide whether to ask for more or move forward with the sale. But if the number is too low, counter with a slightly higher price point above the minimum you are willing to accept. Most importantly, be prepared to walk away if you cannot reach a fair deal with the other party.
7. Be smart and safe about the sale
Safety is of the utmost importance when arranging the sale of your vehicle with a private party. The seller may want to pay cash. Suggest that they use a contactless payment processor, like PayPal, instead.
A cashier’s check is another viable option. The check is guaranteed to clear since the funds are immediately pulled from the buyer’s bank account when the check is issued.
If the potential buyer wants to test drive the vehicle before agreeing to purchase your car, call your car insurance company to ensure you will be covered in the event of an accident. Also, pick a populated area and agree to a route before it begins. You may also want to bring someone else with you for extra safety.
8. Make the sale official
At last, you found the perfect buyer and are eager to finalize the sale. But before it’s a done deal, you must visit the local DMV (Department of Motor Vehicles) with the buyer to transfer the vehicle’s title to the new owner.
Keep in mind that this process looks different in every state. Some may require you to provide proof of a passed inspection or that you contact the tax assessor’s office in your county. You can find the rules for your respective state at DMV.org.
Whether you’re looking to earn some extra cash or swap your car out for a new one, these tips will help you get top dollar for your ride. However, a private party sale is likely your best option to maximize your profit. Be sure to get a few valuations before listing your ride to ensure it is priced right and sells in record time.