Selling your car today is a different experience than it was 10 or 15 years ago, thanks to the tools available on the Internet. Online appraisal tools and Internet classified ads have made the process faster and more convenient.
Edmunds.com has an in-depth 10-step guide to selling your car, but this article condenses the selling process into five simple steps that can help you turn your used car into cash in the shortest time possible. You can also print out this article and use it as a checklist to keep you on track.
1. Research and Price Your Car
Picking the right asking price can mean the difference between getting multiple calls right off the bat and having your phone not ring at all. In order to come up with an effective asking price, you'll first need to find out what the car is worth and how much other people are asking for similar cars. The Edmunds used car section has an appraisal tool that you can use to get a True Market Value (TMV®) private-party price. This figure is adjusted for a number of factors including mileage, condition, options and the region in which the car is being sold.
Next, search for vehicles similar to yours at online classified sites such as AutoTrader.com, Craigslist and eBay Classifieds. This will give you a better idea of the price range for your particular model and whether the number you had in your head is in the ballpark. Then, use the same technique you see at department stores to price your car competitively. In other words, if you're thinking of a $20,000 asking price, list the car at $19,900. Finally, be sure to leave a little wiggle room when setting the price. Ask for more than what you actually want to get for the car and keep in mind that people tend to negotiate in big chunks ($500-$1,000) rather than small increments ($100-$200). Set your price accordingly.
An alternate method would be to take your car to CarMax for an appraisal. CarMax's offer is good for seven days and you can use its estimate as a baseline for your asking price. Or if you're comfortable with the offer, you can accept it and save yourself the rest of the steps.
2. Advertise Your Car
AutoTrader.com is one of the more commonly used sites, but it charges a fee to list your car. You can save a few bucks by advertising for free on eBay Classifieds or Craigslist. Or you can cast the widest net by having both an AutoTrader.com ad and a free classified ad. If you deal with Craigslist, we suggest you take a look at its tips to avoid scams. It is also good advice for any online classifieds site.
You should consider other ways of advertising, such as posting a "For Sale" sign in the car's window. This tried-and-true technique can still yield results. It's also common these days to use Facebook or Twitter to let your friends know you are selling your car.
When you post your ad online, make sure you upload plenty of photos of the car from all angles. As you write the description, make sure to mention if the car has any scratches, dents or mechanical issues. Follow the steps in this article if you need help with the photos. You can also use a few key phrases to communicate how eager you are to sell the car. "OBO" ("or best offer") indicates that you are willing to entertain offers below the stated price. "Asking price" communicates the feeling that you will negotiate. "Firm" is less common, but it indicates that you aren't in a hurry to sell the car — you are most interested in getting your price.
You can also upload a video of the car to YouTube so potential buyers can do a virtual walk-around of the car. Include a link in your Craigslist or eBay listing (AutoTrader doesn't permit links, unfortunately).
3. Show Your Car
If you've done all the previous steps, you should receive a number of calls about the car. Now someone wants to see it in person. Bear in mind that when you sell your car, people will not only be evaluating the car, but also the person who owns it. Buyers will feel more comfortable if they know you took good care of the car and answer their questions openly. Make sure the car has been washed and that you've removed all your belongings from the inside. It is also a good idea to have your maintenance records ready to show interested parties.
Potential buyers will want to test-drive the car. Ride along with them so you can answer questions. Some buyers will want to take the car to a mechanic to have it inspected. If you have a report from your mechanic, this might put their doubts to rest. But if they still want to take the car to their mechanic, this is a reasonable request.
4. Negotiate Your Best Price
It's not uncommon for people to ask you for your "best price" or try to negotiate before they've seen the car in person. If you give out a number first, they may try to lower the price even further once they've seen the car. Try to avoid these situations by letting shoppers know you would rather negotiate after they've seen the car.
When a person test-drives your car and likes it, you can expect him to make an offer. If the offer is well below your asking price, you will want to either hold firm with your asking price or make a counteroffer. An easy counteroffer is to meet the would-be buyer halfway or slightly increase the offer made to you. Give the negotiation process some thought ahead of time so you won't be caught unprepared when the time comes.
In some cases, the buyer might want to have an agreement that is contingent on you performing repair work. This can lead to misunderstandings down the line, so avoid such deals if you can. The best thing to do is discount the car so the buyer can handle the repairs on his own.
5. Finalize the Deal
The laws governing the sale of motor vehicles vary from state to state. Check with the governing agency in your state. Most of this information is now available online. When selling your car, it's important to limit your liability. For example, if the buyer gets a parking ticket or is in an accident, you may be held responsible. Most states have a release of liability form that you can fill out to prevent situations like this. This article on closing a used car sale has more detailed information and a handy checklist.
Once you have the money from the sale — and it's customary to request a cashier's check or cash — sign the title over to the buyer or provide them with a bill of sale. Finally, remember to contact your insurance agent to cancel your policy on the vehicle you have sold.
6. Make It Easy on Yourself
Occasionally, unexpected bumps arise in the sale process. You can handle these easily if you are dealing with a reasonable person. As prospective buyers contact you, use your intuition to evaluate them. If they seem difficult, pushy or even shady, wait for another buyer. With the right person, selling a used car should be simple and easy.