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How to sell your used car in 8 steps

Woman looking at car for sale
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The demand for used cars is high due to a chip shortage prompted by COVID-19. Dealers have low levels of inventory on hand, and price points are steep on new vehicles. Consequently, buyers are shifting their focus to the used car market, which is good news if you want to sell your ride.  

But before you take a few photos and 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 

  1. Choose which way to sell your car.
  2. Gather the necessary documents.
  3. Prepare your car for sale.
  4. Set the right sales price.
  5. Get the word out.
  6. Come ready to negotiate.
  7. Be smart and safe about the sale.
  8. Make the sale official.

1. Choose which way to sell your car

There are three ways to sell your car: 

  • Trade it in: This option only works if you’re looking to purchase a car 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, simple and you’ll have a set period to decide if you want to redeem it.  

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 title to the vehicle. 
  • Any service records available. 

If you’re missing any of these documents, it’s best to wait until you have them on hand to sell your car. Otherwise, you could face complications when trying to finalize the transaction.  

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, plan to have the windshield fixed if it’s cracked, and hire someone to repair any scratches or dents.  

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.  

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 Edmund to get an idea of what your car is worth if you sell it to a private party or trade it in at a dealership. 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 put an ad 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 are looking to sell the vehicle. 

6. Come ready to negotiate

Selling your car to a dealership or trading it in leaves little room for negotiations. This isn’t the case when selling to a private party. 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 if you want to ask for more or move forward with the sale. But if the number is too low, counter with a slightly higher price point that is above the minimum you are willing to accept. Most importantly, be prepared to walk away if you are unable to 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, but suggest that they use a contactless payment processor, like PayPal, to remit payment 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, and the check does not include any identifying information.  

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 along 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 you can consider it a done deal, you will need to 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 

Next steps 

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 if you want 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. 

Written by
Allison Martin
Allison Martin's work began over 10 years ago as a digital content strategist, and she’s since been published in several leading financial outlets, including The Wall Street Journal, MSN Money, MoneyTalksNews, Investopedia, Experian and Credit.com.
Edited by
Auto loans editor