You’ve decided to sell your car, now what?
The easiest part of selling your car is deciding that you’re going to do it. After that, many questions arise, like how much is your vehicle worth, or what is the best way to sell your car? People typically go in one of two directions when selling their car: selling (or trading in) to a dealership before they buy another car, and selling it privately. Both options have their advantages and disadvantages, which we’ll outline a little bit here:
Selling your car to a dealership: This is a very common way to sell a car and the route that many people take. Selling a car to a dealership is very convenient, as all you have to do is have dealership personnel appraise the vehicle, give you a value, and you’re done. A dealership sale saves in time and hassle, and if you’re planning on buying another car, you can apply your trade-in value to your next car’s price for a better deal. However, the price you get for a trade-in is almost always going to be less than it would be if you sold privately, because the dealer will have to recondition your car and still make a profit when they sell it to someone else.
Selling your car privately: Some people may not be familiar with the specifics of selling their car. There are many resources at your disposal if you want to sell privately, and while the process is mostly straightforward, it’s more time-consuming and requires additional work. You’ll have to advertise the car and schedule meetings and test drives. Then, if someone decides to buy your car, you have to make a bill of sale, follow your state’s motor vehicle agency’s sales requirements and transfer the title over to the buyer, all without the ease of having another party handle it. But if you do go this route, you could make more money on your car than if you took it to a dealership. You won’t have to account for markups, hidden fees/costs, or a profit margin to meet, meaning that you’ll be receiving a price that's closer to what your car is actually worth, not what a dealer tells you it’s worth.
How to sell your car privately
Selling your car privately is a great way to get the amount of money out of your car that you think it’s worth, but you may have questions about the process. Here’s a general outline of how to sell your car privately:
- Research what your car is worth
- Get your car ready to be sold
- List your car
- Receive offers and arrange meetings/test drives
- Close the sale
Let’s break it down a little further:
Research what your car is worth: Unlike selling your car to a dealership, you won’t be told the value of your car. You’ll have to find that out yourself, and you want to make sure you’ve done your research not only so you know the accurate car value, but to also attract buyers. A price that’s too high might drive them away, too low and you won’t be getting what you want out of the car. Look at listings in your area online and compare with other online resources to make sure that you’re aware of how much your car is actually worth.
Get your car ready to be sold: Unless your car needs major repairs before you sell it, it’s relatively easy to make it a marketable vehicle. Simple things like cleaning the inside of the car (vacuuming the inside and cleaning the upholstery), running it through a car wash and buying touch up paint for minor wear can work wonders to refresh the look of your car and make it more appealing to buyers, allowing you to ask for more money (and be more likely to get it) when you list your car.
List your car: There are multiple resources available to sell your car, so getting familiar with them is important to gauging what kind of customers they attract and type of products that are listed. Many people shop around for cars online, so listing your car on the Internet is a great way to capture these customers, and public sites usually don’t take a cut of your sale. Make sure to take many photos of both the interior and exterior of the car and when writing the actual listing, be sure to describe the car (previous owners, condition, etc.), who it might be best suited for (a frequent traveler, a college student, etc.), and mention any flaws or defects. The last thing you want is for a prospective buyer to be disappointed in the car by an undisclosed defect, saving time and aggravation on both sides.
Receive offers and arrange meetings/test drives: Fielding offers from potential buyers can be a bit time consuming, but once you’re able to gauge a person’s interest, it will become easier to sort out serious offers from not-so-serious ones. If a prospective buyer is interested, he or she will probably ask questions about the car, so answer them honestly and to the best of your ability. Again, you don’t want to surprise a potential buyer with defects that he or she wasn’t prepared for. If the buyer has asked for a test drive, meet in a public place so the buyer can look over the car and test drive it, and hold a credit card while the buyer takes it out for a spin. If all goes well, expect a first offer under asking price and from there negotiate with the buyer until an agreement is made. After the sale is closed, make sure the buyer is aware that the burden of registration, transferring plates, obtaining tags and paying the sales tax falls upon them when completing the final part of the process.
Close the sale: After you have accepted the buyer’s offer and the buyer has been made aware that the responsibilities that fall on his or her shoulders, you’ll need to provide some documentation that will transfer ownership of the car to the buyer, while also releasing yourself of future responsibility related to the car. The first step is transferring the car title over to the buyer, which will have to be done with a notary present. To do this, you’ll need the buyer’s name and address, the selling price and an odometer reading.1 Requirements vary by state, so check with your local BMV/DMV to make sure you have everything you need. After this has been taken care of, and you’re no longer liable for the car, the last step is to make your insurance company aware that you have sold the car.
That’s it! You’re done. You’ve sold your car privately and made more than you would have selling to a dealer. The process may be new to you, and takes a little more effort than just dropping your car off at a dealership, but most likely the extra cash in your wallet is a welcome reward for a few extra hours of your time.