For many car owners looking to sell their vehicle, a dealership is their first and last stop. But experts say those who are determined, patient and willing to take initiative can get a better offer by bypassing the dealership and selling their own automobile.
While selling a used car on your own can prove profitable, it can also be challenging. Here are tips from the pros on how to determine your car's retail value, highlight its best features and lock in a prospective buyer:
Pinpoint your asking price. Start with a website like KelleyBlueBook.com to get a rough estimate of how much your car is worth. Plug in as many details as possible, such as a built-in navigation system, CD player, premium sound and leather upholstery, since they may increase the value of your vehicle. The website will then estimate your car's private party value (a price KBB projects you can get in a sale from consumer to consumer). David Weliver, a former car salesman and publisher of the Money Under 30 blog, says although KBB puts a specific dollar value on a car's worth, it's best to use the calculation to figure out a range for the vehicle's retail value rather than making it your asking price.
To narrow down the range, compare your car to other vehicles of the same year and model with similar mileage. Check out websites such as AutoTrader.com, Craigslist.org and eBay.com/motors, which host thousands of advertisements for used cars from private parties. It can also help to get quotes from several local dealerships.
Adam Goldfein, host of the TV show "AutoScoop" on CW69 in Atlanta, says sellers should generally stay within 5 percent of what they think is a fair asking price. Setting the price too high can make buyers automatically disregard your advertisement, while pricing the car too low can raise a red flag. "If everyone is selling your Honda model for $20,000 and you're asking for $16,000, I'd be skeptical," Goldfein says.
Take the time for a tune-up. Simply giving the car a wash and hanging a new air freshener won't cut it. Fixing low-maintenance items like worn brake pads, weathered tires and rusted rotors requires little time and shows buyers you take good care of the car. "People want ready-to-drive cars," Weliver says, "not something they have to take to the shop."
Joe Wiesenfelder, executive editor of cars.com, recommends removing all personal items, including political bumper stickers. "Do you want to sell to someone who has the same political views as you, or do you just want to sell the car?" Wiesenfelder says. Some decals can be hard to remove without damaging the paint, so it may be worth paying for a professional detailing, which starts around $100 and includes cleaning, waxing and polishing of both the interior and exterior.
It's also crucial to take your vehicle to a mechanic to make sure there are no major problems. Many consumers will want to have the car inspected anyway, so taking the initiative can save time and establish trust with the buyer. Present the buyer a copy of the mechanic's summary and, if possible, your vehicle's history report.
[Read: Is Your Car Worth Repairing?]
If you choose to commission repairs, pay close attention to the driver-side door, window and handle, as people see those parts before they take a test drive, says Phil Reed, senior consumer advice editor at Edmunds.com. While at the shop, you can ask your mechanic for recommendations on buyers; he or she may know if any customers are in the market for a used car. Some mechanics may even decide to buy the car from you, Wiesenfelder says, since they can fix it and then try to "flip it" for a profit.
Promote effectively. Consider advertising on AutoTrader, CraigsList and eBayMotors (the sites useful for preliminary research). Goldfein offers these recommendations on how to take high-quality photographs for your listing:
-- Make sure nothing in the background matches the color of your car.
-- Take photos in the early morning or late afternoon to get the best natural light.
-- For transparency, snap photos of the odometer, engine and tires.
-- If you're photographing on an asphalt surface, hose the blacktop down; this washes away dirt and mud, and the reflection will make your car shine.
For added exposure, consider leaving your car in a well-lit, public place (with good traffic) and taping an advertisement to the windshield. Weliver says to use large type and include your asking price, contact information and perhaps a URL to the car's online advertisement, so interested passersby have somewhere to go for more information.
Keep the ad's car description short, since prospective buyers tend to cycle through listings quickly and a big block of text may make them glance past your car. Of course, you should highlight the car's best features, but it can also be beneficial to disclose any problems with the car that could be a potential deal-breaker. For instance, if the trunk has a large dent, Wiesenfelder suggests mentioning it in the description and showing a photo of it, so buyers will see that you're transparent. You should also be upfront if you smoke regularly in the car. And if your car is old or somewhat beaten up, "Call it 'reliable, affordable transportation,'" Goldfein says.
[See 50 Smart Money Moves.]
To make your advertisement stand out, you can go a step further and use a smartphone to tape a video guiding the prospective buyer around the car, then upload it to Youtube and include the link in the description.
Proceed with caution. Goldfein advises against showing the car to prospective buyers at your home. Instead, he says it's best to meet at a public, centralized area (like a mall parking lot) during business hours to ensure you're not alone and your home address remains private. If an interested buyer would like a test drive, ride along as a passenger and have a pre-determined route so you know where you're going at all times, Goldfein says.
Seal the bargain. When emphasizing the car's finest features, avoid over-sharing. "You may like that the car has a tight steering wheel, but someone else may have experienced that before and they don't like it," Weliver says. "It's OK to stay neutral sometimes."
When it comes time to negotiate, be flexible; sometimes you have to be willing to lower the purchase price to come to an agreement. Still, Weliver says it's important to determine ahead of time the lowest offer you will accept. "Know what your walk-away point is," he says.
Once you've settled on the terms--and have been paid in cash or with a cashier's check (Reed of Edmunds.com says other forms of payment pose risks)--the closing is simple. Fill out a bill of sale (you can find a template at DMV.org), sign over the title and say goodbye to your old set of wheels.
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