Shopping for a new car can be a lot of fun. Your car-buying excitement may come to a screeching halt, however, when faced with the prospect of selling your old car.
To get you motivated, we asked some car experts to explain how you can help simplify the process and get the most cash for your used vehicle.
1. Showcase the Ride
To make your vehicle more attractive to potential buyers, spiff it up.
Automotive expert Lauren Fix, known as The Car Coach®, compares the process to staging a home for the real estate market. People often clear countertops, clean closets and rearrange furniture to showcase their homes. “Stage your car as well,” Fix says. “Clean the floor mats, the stains on the cushions and the engine.”
Many car wash centers offer detailing services that can make gently used cars look practically new, inside and out.
2. Fix What Makes Financial Sense
As you evaluate the car’s condition, think about:
- Easy cosmetic changes, such as touching up paint, repairing dents and fixing windshield chips or cracks. For hail damage and other minor dings, so-called “painless dent repair” services can be far less expensive than replacing complete parts.
- Mechanical tuneups. Have a certified mechanic inspect the vehicle for must-do fixes. It may be worth replacing an aging brake system to attract a buyer, for example, but don’t sink so much into repairs that it eats into the profit you’re seeking.
If you do have significant repairs made, keep the records to show potential buyers that certain parts of the car are running like new.
3. Know What It’s Really Worth
To price your car correctly, find out its current value and be realistic about its condition. Sites such as Kelly Blue Book, Edmunds.com and the National Automobile Dealers Association help you calculate your car’s market value to dealers and individual buyers. The more quality sources you use, the better you can feel about how much you trade-in or sell your vehicle for, says Steven Thompson, vice president at USAA Bank
When using these sites, be sure to factor in the vehicle’s mileage, options, interior condition and any exterior damage. This will help you get a more accurate estimate of its worth.
4. Decide Whether to Trade or Sell It
“It’s generally known that you’re likely going to get more for a used car if you sell it to an individual buyer rather than to a dealer or trading it in,” Thompson says. That’s because dealers have to put money into a used car to refurbish it and bring it to market or auction in order to make a profit.
So, research trade-in value versus the private-sale value. Knowing the difference can help you weigh your options. Generally, you have three choices:
- Dealer trade-in. While dealers generally pay less for a trade-in than you would get selling the vehicle yourself, you might find that the convenience of a same-day transaction makes up for it. You can leave the old car on the lot and drive away in the new one.Fix notes that the sales tax credit for a trade-in, offered in most states, can sweeten the deal. Usually, you pay sales tax on the new car price minus the trade-in amount. For example, on a $20,000 new car with a $5,000 trade-in, you’d only owe sales tax on $15,000. In a state with 10% sales tax, that’s a savings of $500.
- Direct sale to a dealer. Selling to a dealer without buying another car is also an option. It’s easy and helps you separate the sale of your current vehicle from the purchase of the new one, which can simplify negotiations in both cases. As with a trade-in, however, you’ll probably get less for your car than you would by selling it to an individual.
- Dealer consignment. For a fee or commission, a dealership may handle the sale of your car for a price you determine.
- Direct sale to an individual. While this option may bring the highest price for your car, it often requires more time and effort. Traditional sales methods include taping a “For Sale” sign to the window, or buying an advertisement in the classified section of your local or community newspaper and its website. The Internet, however, can make advertising easier, thanks to auto-related websites that let you market your vehicle to a large audience.
You don’t necessarily have to immediately decide on one of these options, Thompson says. You may want to have conversations with a dealer about trading-in your vehicle, or selling it directly or posting it online. The more conversations you have about your options, the better you can feel about the deal on your vehicle you ultimately end up with, he adds.
However you sell your car, be prepared to negotiate with buyers who have done their research. And keep safety in mind: Meet strangers in a public place, and never give out your home address or other personal information.
5. Get Papers in Order
Like a soldier in a crisp dress uniform, your spiffed-up ride may be ready for inspection. Presenting the right paperwork can seal the deal.
Here’s what you need:
- Service records. “If I see records, I know you cared for your car,” Fix says. A car aficionado, she maintains detailed files on every vehicle she owns, with notes and receipts. She suggests keeping a simple notebook in which you jot down repairs and maintenance work, and the dates they were done. If you don’t have long-term records, keep recent receipts for such things as oil changes and tire purchases.
- CARFAX® Vehicle History Report.. This report, done through a car’s vehicle identification number or license tag number, can create good will with potential buyers and offer them peace of mind by assuring them the car hasn’t been flooded or totaled in a wreck, then repaired.
6. Be Smart About the Actual Transaction
If you sell your car to an individual, prepare a bill of sale that documents the transaction terms and serves as a legal receipt. Include the year, make, model and purchase price of the vehicle, the date, your name and the buyer’s name. Both you and the buyer should sign it; keep a copy for yourself. Make sure to include these two key phrases:
- Car sold in as-is condition.
- No warranties expressed or implied.
Otherwise, if something goes wrong with the car, an unhappy buyer could demand some money back, Fix explains. Check your state’s department of motor vehicles for more information on how to prepare a bill of sale.
Next, transfer the title. Since the title-transfer process varies by state, check with your department of motor vehicles or county clerk’s office to find out what you need to do. Then:
- Only turn over the keys and title once you have successfully received payment or the buyer’s check has cleared.
- When you transfer the title, cancel your car insurance on the vehicle.