When it comes time to get rid of your vehicle, you generally have two options: you can trade it in to a dealership or sell it privately yourself. The dealership route is usually less hassle and they do all the legwork. But, if you have a little patience, selling your vehicle yourself can result in a better return.
Selling your vehicle by yourself doesn’t have to be complicated, but there are a few things you should know before diving into the selling process. Here are some tips to guide you through the process.
Determine How Much Your Car is Worth
Cars depreciate quickly, so it’s important to understand that your car isn’t worth as much as it was when you first bought it – even if it was purchased brand new only a year or two ago. According to Edmunds, the minute you leave the car lot, your car depreciates by as much as 11 percent. And within your first year of ownership, the car continues to depreciate, losing up to 30 percent of its value!
Determining how much your car is worth is one of the first steps to take in the selling process. Kelley Blue Book, Edmunds, and NADA are all great resources that will help you determine a fair resale value for your vehicle. It’s also important to understand each value and what it’s used for.
The Kelly Blue Book Values determine your car’s monetary worth by assessing the following:
- Trade-In Value: how much you would typically get for a trade-in at a local dealership.
- Private Party Values: the value you would receive when selling your vehicle privately.
- Typical Listing Price: the dealer’s asking price.
- Typical Listing Price Certified Pre-Owned (CPO): the dealer’s asking price for a used vehicle that’s covered under the manufacturer’s warranty in the CPO program. CPO typically raises the market value by $1,000 to $2,000.
Comparing the trade-in value to the private party value is a great way to help you see the price difference. If your car isn’t worth as much as you thought it was, you may want to consider trading it in at the dealership.
Gather the Paperwork
Make sure to gather all the documents you’ll need to sell your car before meeting with potential buyers. Otherwise, you’ll likely find yourself scrambling to find them at the last minute.
Paperwork requirements vary state to state, but it’s likely you will need the following:
Your Title. The title is one of the most important documents. It shows who is the current owner of the vehicle and is required to transfer ownership to a new individual.
Maintenance Records. Vehicle upkeep is important to buyers and to protect yourself as the seller. A record of oil changes, tire rotations, fixing problems, or common repairs that were performed under your ownership shows the potential buyer you’ve taken good care of the vehicle. This alone can add value to your vehicle.
Bill of Sale. The bill of sale records the transaction between the buyer and the seller. This document contains important information such as the date of purchase, the purchase price, the current mileage on the odometer, the VIN number, and the buyer’s and seller’s contact information and signatures.
Release of Liability. This document will help protect you against any potential liability for damages after you’ve sold the vehicle and before it’s registered in the buyer’s name.
Warranty Documents. This paperwork is optional. If your vehicle is still registered under the warranty, you’ll want to provide that warranty information to the new owner.
As Is. This document, which can be included in the bill of sale, protects you against any potential liability if anything goes wrong with the vehicle. This document shows that the new owner assumes all responsibility for anything that goes wrong with the vehicle and is buying it “as is.”
Prepare the Car for Sale
Before you put your car up for sale, you’ll want to be sure your car looks its best to attract the attention of potential buyers.
The following are areas to pay attention to detail:
- Wash and wax the exterior
- Deep clean the interior
- Wash or replace old, dirty mats
- Look in compartments and make sure all trash is removed
- Wash the windows (inside and the outside)
Once your vehicle has been prepped, it’s time to take pictures. Believe it or not, there’s a strategy behind taking pictures. You want to have enough pictures that you can showcase every important aspect of the vehicle.
The following are some exterior areas to highlight with the camera:
- Front, head-on
- Under the hood, featuring the engine
- Inside the trunk
The following are some interior areas to highlight with the camera:
- Front seats
- Back seats
- Steering wheel
Create an Ad for the Car
After all the prep work is done, it’s time to put your car up for sale. This means you need to find a place to advertise your vehicle. It doesn’t hurt to put your car up on multiple websites, because more exposure increases your potential. Websites like Cars.com, Kelly Blue Book, and your regional Craigslist are all great ways to advertise your car. Some of these sites even simplify the process by enabling you to set a fixed price to avoid price haggling.
When creating your advertisement, be as detailed as possible. At a minimum, you should include:
- Upgrades, if any
- Accidents or repairs
- Number of owners
Your description should not only be detailed, but also accurate. A good, detailed description will leave a good first impression on potential buyers.
Screen Potential Buyers
Creating an online ad can help you sell your vehicle quickly, but there is also an increased risk for scammers. When you are responding to inquiries, be prepared to ask detailed questions to help you determine whether the people you are dealing with are legitimate or not.
Only offer a test drive to potential buyers who seem seriously interested. If things seem to still be going well after the test drive, that’s when you can begin the negotiation process. Always start with a number higher than what you’re willing to take and have an amount in mind that you won’t go any lower than. Don’t be afraid to counteroffer if you don’t like the buyer’s offers.
Finalize the Sale
Once a price is accepted, you can begin all the paperwork that you have ready to go. If the buyer is paying with a cashier’s check, visit the bank with them to claim your money. Be wary of any unusual financial requests from the buyer.
Once payment has been accepted, you’ll need to:
- Draw up the bill of sale
- Sign the title over to the new owner
- Complete the release of liability
- Give the warranty documents to the new owner
- Provide a copy of any maintenance records
Be sure to check with your local DMV to find out if there is any other paperwork required in your state. Now, you are ready to hand over the keys!
Selling a car isn’t as complicated as it sounds. It just takes a little know-how, a bit of effort, and some patience. The work usually pays off in the end when you end up with extra money in your pocket.