Online Classified or eBay Auction?
How do you sell your used car for the most money and the least amount of hassle? The giant eBay Motors will move your used car in a little over a week without bombarding you with phone calls or strangers coming to your house. When you hold a seven- or 10-day auction, bidders are pitted against each other to drive the price up above a "reserve" amount that you can set.
A "VIP service" offered by AutoTrader is the new alternative to your typical online sale. The VIP staff photographs the car and posts the ad online. Callers are screened and only serious buyers are passed along to you.
Selling a Nissan GT-R
We sampled both these sales methods while selling a 2009 Nissan GT-R with 33,000 miles on it. While the car was eventually sold using the eBay auction, we had a chance to experience the advantages of the VIP sales service provided by Mota Motors through AutoTrader.
AutoTrader's VIP Service
For an up-front fee of $279, a photographer came and took pictures of all the key details of our GT-R. Some 27 photos were posted on AutoTrader. A spokesman commented that studies have shown that the more photographs displayed, the higher the selling price of the vehicle. Also included were a vehicle history report and a paragraph describing the car. (In some cases, an inspection of the car is included. However, since our car was still under the factory warranty, this step was omitted.)
A VIP consultant was assigned to our car and he suggested we list it for $62,000. We discussed this with him for a few minutes and eventually decided to start by asking for $66,000. A few days later we received an e-mail from our consultant saying he had someone very interested in buying the car. We called the number we were given and spoke with an auto broker who offered $54,000. We declined. Over the three-week period the ad ran, we received seven other queries about our car but no solid offers.
The eBay Motors Auction
It took us about an hour to create the eBay auction and we set the reserve at $52,000, just a bit above the $50,000 the used car superstore CarMax offered us for the car. The reserve is the lowest amount we would be willing to take for the GT-R.
We soon began receiving bids for our car and the amount rapidly approached the reserve amount. However, the bidding seemed to stall at about $50,000, just short of the reserve. An eBay spokesman suggested we drop the reserve by a small amount. The bidders would then be notified of the change and they might become curious and start bidding again. We followed his advice by dropping the price $100 and saw an uptick of activity.
The auction ended with a selling price of $52,600. The buyer, from the Atlanta area, wired us the money and flew out to get the car. We signed over the title and he drove away. When we received our bill from eBay, the charges for the ad and auction were $125.
eBay's Amazing Track Record
A car is sold every minute on eBay Motors, which has amounted to a total of 3.5 million passenger vehicle transactions over the span of its history. A company spokesman said that a classic car is sold every nine minutes and the Ford Mustang is its top-selling vehicle. Over the course of our eBay auction, more than 6,900 people viewed our page.
But what about price? "It's really on a case-by-case basis, where auctions work best for some types of cars and the fixed price listing format works better for others," said Danny Chang, senior manager at eBay Motors. "The value of eBay is that it's a marketplace offering both an auction and a fixed price model, so depending on the many factors that go into the online sale of a vehicle, the seller can choose which method best fits, and the market will ultimately bear out a fair price."
But what about doubts buyers might have about the car's condition? "Buyers are definitely more open to purchasing vehicles online," Chang said. "We even have buyers purchasing vehicles via their mobile phones through eBay's mobile application. Also, 75 percent of vehicles sold on eBay Motors [in the third quarter of 2009] were interstate transactions, indicating a high trust factor among buyers and sellers."
For more sales strategies, see "Buying and Selling Cars on eBay."
Bottom Line for Used Car Sellers
It's impossible to say which method is best since car owners have different expectations. Many sellers want to get the absolute highest amount for their used car. However, unless you know the market very well, or are lucky enough to find an uninformed buyer, this could be a long process and still end up short of the mark.
The VIP service sped up the listing process and completely blocked bogus calls that make the selling process so annoying. The photographs were top-notch and the price suggested by our consultant was realistic.
On the other hand, the deadline imposed by the eBay auction excites buyers and brings a rapid conclusion to the sale. Furthermore, questions about the car arrive via e-mail and can be addressed easily without requiring you to spend time on the phone.
A New Sales Strategy
If you have the time and want to get top dollar, use the VIP service. If you want to quickly move on with your life, set up an eBay auction. However, to see real action, be realistic about the reserve. Whichever route you take, you will enjoy the convenience of online car selling and the vast number of customers it can reach.