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As I noted a week ago, we recently bought a new car. That meant it was time to sell our old car. In general terms, I avoid trade-ins because: (1) they make the deal significantly more complex, making it harder to get a good deal, and (2) you can generally get considerably more selling your car to a private party.
Well, I’m pleased to report that we’ve now sold our old car. Today, I want to share some tips for doing this yourself. While there’s a bit of work involved, you’ll typically come out way ahead relative to a doing a trade-in.
Save the original paperwork
For starters, it’s a good idea to save all of your paperwork from the original purchase and make it available to the prospective buyer. This includes the window sticker, as well as the glossy showroom brochure describing your car. If you care enough to keep this stuff, you’ll give the buyer confidence that you cared enough to maintain your car over its lifetime. Yes, it might be too late for you now, but next time you buy a car, you’ll know better.
Take good care of it
For starters, if you want to maximize resale value, take good care of your car. Do the preventative maintenance on schedule, fix problems as they crop up, clean up spills and stains when they happen, and so forth. Nobody wants to pay top dollar for a hunk of junk, so do your best to keep your ride in primo condition. And save your maintenance records!
Clean it up
My next tip is, to the extent possible, restore that “new car” look. Spend a few bucks getting your car detailed. The closer to showroom quality, the closer you’ll get to your desired price. One thing to be aware of: A squeaky clean engine is impressive, but if you get it steam cleaned, potential buyers might worry that you’re trying to hide evidence of leaks.
Figure out the value
While you want to get top dollar for your ride, potential buyers may ignore your ad if you ask for too much. It’s thus important to figure out how much your car is really worth before deciding on a price.
Both Edmunds and Kelley Blue Book offer free online tools for estimating a reasonable private party resale price depending on mileage, condition, etc. While you should use those services, you should also skim through Craigslist and the classified ads for your area to get a feel for the local market.
When setting the price, keep in mind that most buyers will want to haggle, so you’ll need to pick a number somewhat higher than you’re willing to accept. But don’t go too high, or your phone will never ring.
Assemble your records
Before you list your car, get your paperwork in order. This should include not only your maintenance records (you’ve been saving them, right?) to re-assure the buyer that you took good care of the car but also you car title, which you’ll need before you can transfer ownership. This latter point gave us a bit of a scare, as we couldn’t find the title at first. We knew it was in one of three places, and it wound up being in the third (and least likely).
In order to drum up interest, you’ll need to do more than just stick a “For Sale” sign in the window and drive it around town. Yes, Craigslist can be a good source of buyers, but it’s also full of scammers, and not all that effective (in my experience). Thus, I highly recommend placing a newspaper ad. Be sure to hit the high points (mileage, non-smoker, garage kept, new tires, etc.) and be sure to list a phone number (Google Voice is great for this) to make it easier for buyers to get in touch.
Another tip: Take good pictures and use them. Craigslist lets you upload up to four photos, and many newspapers allow at least one picture to go along with your ad. People are far more likely to followup if they can see how awesome your car is.
Show it off
Once you start hearing from buyers, it’s time to show it off. It’s up to you where you meet them — either at home or at a public place. We’ve always done this at home, but I can certainly understand not wanting strangers at your house. Be prepared to let them take a test drive. You’ll need to get their license and insurance info before handing over the keys.
They should leave their car behind (get the keys) to help ensure they’ll come back. Hopefully it’s not a beater! You may or may not want to go along with them. I’ve done both. Most recently, the buyers (and older couple) asked me to come along, so I joined them and answered questions about the car as they drove. You’ll have to follow your gut on this one — don’t do anything stupid.
If the buyers ask to take the car to a mechanic… This is understandable, but can be problematic. You’re trying to sell your car, and you can’t be without it for long stretches. If it’s a buyers market and you feel like you need to do this to close the deal, offer to meet them at a local mechanic for a quick checkup – but the buyer should pay.
In our case, we took it to the dealer for an oil change and a “51 point maintenance check” before putting it on the market. We were thus able to show this report to the buyers (along with all of our other paperwork) and they were appeased.
Settle on a price
Okay, you’ve hooked a potential buyer. It’s now time to close the deal. In all likelihood, they’ll ask you for your bottom dollar price. Here’s the thing… You’ve already named a price. It’s their turn to go. Don’t fall into the trap of negotiating against yourself. Politely tell them that you’ve already set a price, and ask them to make an offer if they think it’s too high. If they repeat their question, point out some of the positives and let them know that you think it’s fairly priced, but that you’ll consider any reasonable offer.
Here again, use your judgment. You want to get them talking, so if you absolutely have to open the negotiations, shave a small amount off the asking price and go from there. Just keep your bottom line number in mind when negotiating and don’t be afraid to walk away if they insist on lowballing you.
Close the deal
At long last… It’s time to close the deal. As much as you want to avoid getting ripped off, your buyer feels the same way. Thus, I suggest that you arrange to meet them at their bank to seal the deal. You don’t want to take a bad check or a handful of counterfeit bills. They can either pay you with a cashier’s check or cash. You can then sign over the title. Either way, you’ll see the teller hand it over so you’ll know it’s legit.
I would also recommend writing up a bill of sale (your state’s website probably has a template) to be signed by both of you. Be sure to keep a copy for yourself.
If you have any tips of your own, please don’t hesitate to share them in the comments.