How to Sell a Used Car
Published on - July 5th, 2006 (Modified on - March 13th, 2009) (by J.D. Roth) An AskMetafilter user recently asked for tips for selling a used car:
I’m selling my car. Help me not be stupid. What’s safe? How do I handle a test drive? Do I go with them? If they buy, do I insist on cash, or some sort of check? (What sort?) What are the safest ways to not be taken? Do I let people come to my home, or meet them somewhere? Any other hints?
Most buyers are honest people, and are happy to be working with a private party instead of a dealership. To get the best price from your car, follow these steps:
- Prep your vehicle. Check the vehicle to be certain that everything works. You may consider having a mechanic examine your car and issuing a report about its condition.
- Research the market. Spend a few weeks scouring your local used-car classifieds to learn what people are asking for similar vehicles. Use the Kelly Blue Book or NADA Guides to get additional information.
- Set a competitive price. Determine what you think your car is worth, and then add a little to the price for wiggle room. (You don’t want to start negotiations from the price you think the car is worth.) Decide on a rock bottom price below which you will not entertain offers.
- Gather records. Prepare a folder containing all maintenance records. If you had a mechanic inspect the car, include his report. Consider purchasing a vehicle report from CARFAX — it can help set potential buyers’ minds at ease. Also have a bill-of-sale ready to go. (What you need for a bill-of-sale will vary by location; here’s a list of state motor vehicle division web sites.)
- Clean your vehicle. Wash the car thoroughly. Don’t just run it through a car wash — scrub it down. Wax it. Clean the interior. Get all the junk out of it and vacuum it. Make it look its best.
- Create an advertisement that sells. Mention top options and improvements. List any recent upgrades, such as new tires or battery. Has your car lived all its life in a garage? Say so! Do you have all the maintenance records? Mention that, too.
- Spread the word. Get as much exposure for your ad as possible. The more demand you can generate, the more money you’ll make. Online, try craigslist, Autotrader, and Cars.com. (Quality photos are important for online ads.) Run your ad in a newspaper over the weekend, when it will reach the largest audience.
- Be prepared to answer questions. People will call or e-mail to ask for more specific information. Be ready to provide it. Keep a list of key facts by the phone.
- Show your car to interested buyers. If you’re nervous about your ability to deal with people, get somebody to help. You’re selling yourself as well as the car, so make a good impression. Allow the buyer to take a test drive, but be sure to ask for a valid driver’s license first! Permit buyers to take the car to their mechanic, even if you’ve already taken it to yours.
- Negotiate a fair price. A good price is fair to both parties. Having done your research, you’ll know what your car is worth. Be confident in this knowledge. When you’re sure of a vehicle’s value, it’s easy to stand strong when somebody tries to lowball you. Have a firm bottom price in mind, but if a reasonable offer is only a couple hundred dollars from this figure, consider accepting it.
- Make the sale. Complete a bill-of-sale transferring ownership. Again, what you need for a bill-of-sale will vary by location. (Here’s a list of state motor vehicle division web sites.) Ask for cash or a cashier’s check. (Here’s a page about avoiding fraud, including fraudulent cashier’s checks).
- Take care of details. After the sale is complete, cancel your insurance on the vehicle. Offer your phone number to the buyer so that you can answer questions, but be clear that the sale is final.
If anything about the transaction makes you nervous, call it off. If the buyer seems shady, he probably is. If the buyer wants to pay more than you’re asking and then be issues a refund, he’s probably trying to pull a scam. Don’t do it. Trust your gut.
If your car has trouble, if it’s a lemon, don’t sell it to a private party. Sell it to a dealer. You’ll get less money, but you won’t be screwing over somebody else. And the dealer will be better equipped to repair the trouble. Remember: your goal is to provide an excellent transaction for yourself and for the buyer. You’re not there to rip anybody off.
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Let me add the most important thing you can do to save you from legal liability and a ton of hassles. It is VERY important to write a bill of sale, have the buyer sign it (keep a copy for yourself) and include this language:
“This vehicle is sold as-is. Buyer assumes all liability and guarantees the vehicle will be registered in their name immediately.”
I know people who sold cars, then the buyer never registered it in their name, then they drove it for months, racked up parking tickets and crashed the car, leaving the previous owner with legal liability for damages from the crash and the tickets. It would really be best to go with the buyer to the DMV and watch them register the car in their name.
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That’s insane!
I’ve heard similar horror stories, but all of my bad experiences have actually been on the *buying* end of used car transactions. Those were when I was young, insecure, and foolish, and I like to think I’d do things differently now, but who knows. It’s because of these early bad car-buying experiences that I’ve bought my last two cars new…
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“If your car has trouble, if it’s a lemon, don’t sell it to a private party. Sell it to a dealer.”
Selling a car with problems to someone who doesn’t mind *buying* a car with problems is a great way to get rid of a problem car. There’s always someone out there that wants to buy a winter beater they can drive for four months and then junk, or a preassembled box of parts for a car they already have, or a platform for their latest project, or whatever. Be honest with buyers, but not too honest — and specifically, be honest about the stuff you don’t know. “It won’t turn over on odd-numbered days, I haven’t had it checked out” is fine; “… I think it’s the veeblefitzer, but I’m not sure” is asking for a buyer that comes back and says it wasn’t the veeblefitzer, it was something that cost 10x as much.
The dealer on the other hand wants nothing to do with your lemon unless you’re buying a car from them, in which case they’ll give you a price for it, increase their bargaining point on the car you’re buying to make up for that price, and trailer it to the junkyard at the end of the day. If the car’s not in condition to put back on the lot or to sell at a dealer auction it’s a liability to a dealer.
If your car is really in such rough shape that you wouldn’t even wish it on a guy ready to take it away on a trailer, then the way to get what you can on it is to take it to a junkyard. (Then again, the junkyard wants it because they can turn around and part it out — which means they think the guy looking for it is out there somewhere!).
One other option if you’re not desperate for the money even a junkyard would produce: donate it to charity. Charities that take cars don’t care if they run, most of the time; they’re happy to have someone donate their time to pick up your donated car and take it to the junkyard themselves, and put the proceeds back into the charity.
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Here in Washington, the state requires that sellers report the sale (via a conveinant online form, too). Once that is completed, all liability transfers from the seller to the buyer, which brings great peace of mind. Don’t forget to cancel your insurance, too.
I would take minor issue with not selling a car with defects. As long as you’re disclosing the defects–and if it’s something serious, repeatedly, so that you know the message is getting across–there’s no reason you shouldn’t sell the car. If it’s safety related, don’t allow a test drive and don’t allow the buyer to drive away, but otherwise, allow the buyer to decide whether they can live with it. Unless you truly know what the problem is, do not diagnose it yourself, either. Just present the issue (“the engine knocks when warm, you can hear it”) and if you’ve had the car professionally checked out, tell them what you learned (“Jim at Performance Motors thinks it is a con-rod bearing, but can’t know for certain until it’s taken apart. That was going to cost a minimum of $1,000″).
For some, a knocking engine would be a hopeless situation, but for a decent shade-tree mechanic, it could be a way of getting an otherwise nice car for much less money than she otherwise could find one. If you do have a car with a serious problem (either aesthetic or mechanical), remember that your price is going to have to reflect that…the cost of the repair plus a hassle factor, in all likelihood.
Some more “hints:”
Be honest about your car’s condition when setting the price. Have a friend or coworker take a look and tell you what they think of the paint and interior so you can see it with “fresh eyes.”
Decide what your time is worth. Selling a car is a hassle, and only you know whether it’s worth it to you to entertain 10 different shoppers in an effort to get an extra few hundred or whether to have the sharpest price and sell it to the first person who sees it.
Your buyer isn’t going to care at all how much you have remaining on your loan. Many buyers will not care at all that you spent lots of money on wheels, accessories or the like. They will in all likelihood view those as “throw ins” that won’t factor in to whether they buy your car. Factory stock is the easiest condition to sell a car in. If you have valuable wheels, take them off and sell separately, or accept that most people won’t care or may even view them negatively.
A clean, well-cared for car priced aggressively will sell immediately, in my experience. Most buyers have seen several cars, a lot of them junk, and will know right away that you’re offering a good deal.
Finally, don’t spam if you use an online ad. It doesn’t attract new buyers and irritates a lot of people. If you’re selling a Toyota the buyers of Lexus and Acuras aren’t going to magically decide your car is one when you put “not Acura, Lexus, etc.” in your ad. I mark all such ads as spam on craigslist and know many others who do the same.
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Sorry for spreading this over two comments, but:
“Permit buyers to take the car to their mechanic, even if you’ve already taken it to yours.”
really ought to read “Offer to take the car to the mechanic of your buyers’ choice”. Don’t permit potential buyers to do anything to the car that doesn’t involve you sitting in it, lest it not come back!
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from a financial perspective, selling your car yourself is definitely a great deal. people should be aware that i can create significant headaches, as some have already mentioned.
i sold my subaru last year at a good price to a motivated buyer. i repeatedly told him that, mechanically, the car had been sound but that we should take it to a mechanic of his choosing. he was satisfied with my service records and didn’t want to take the time to get the car checked out. i should have insisted because the head-gasket failed a month or so after he took the car. the ensuing verbal/written battle was unpleasant. a written bill of sale would have helped…
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[...] Sell a Used Car [...]
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Anyone needing help on selling a car can go to:
http://www.vehiclesinc.com
Or, call us at 610-799-6000 and ask Lou.
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[...] How to sell a used car [...]
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This is incredibly helpful. Bookmarked.
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This is probably one of the most complete guides I’ve seen on the internet for car sales. I would add one thing – if the car you’re selling is older and has some defects, make sure that you’re brutally honest about them upfront, and be prepared to make some amends on the price for those defects.
Great quality!
Dan
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[...] How to sell a used car [...]
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I purchased a Lemon/manufacturer buyback from a private party. I did a carfax and found it had an issue. So i did some investigating. I called the number where the car was sold at. They faxed me an internal report on the vehicle. Turns out the owner complained about the a/c only. I called and spoke directly the service manager who worked with the owner of the vehicle and who worked on the buyback. Apperantly the owner worked for a/c units that where installed in the car. They replaced it and he kept coming back with low freon. Basically, the guy was tampering with the unit and knew how to work the system. Also I was told but could not be documented that the guy wanted out of the payments, so he did what he knew would get Toyota to buy the car back. So if you are doing your homework, and find out its not a real serious problem go for it!!!! You will get a great deal. By the way my husband is a mechanic so we werent worry about it. But we used a thermostate and it blows VERY COLD AIR!!!!
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Thanks for all the tips. Selling a used car shouldn’t doesn’t seem all that troublesome now.
Twitter: @unocardealers
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