What could be easier than trading in your old car when you’re buying a new one? Just hand over the keys, use the money the dealer has offered as a down payment, and drive away in your new car. But although you can skip the search for a buyer and the cosmetic repairs, you’re probably leaving money on the table. You’ll typically get about 10% more if you sell to a private party.
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Before you decide between trading in your car and selling it yourself, find out how much it is worth. Car research sites such as Edmunds and Kelley Blue Book are good places to start; they base values on recent transactions in your area. Each site uses a different description for condition, so read carefully and be honest.
You’ll find separate prices for dealer and private-party purchases. Don’t expect to get the dealer retail price, which factors in the work dealers do to recondition the vehicle for resale, as well as their profit. Once you have an idea of the range, expand your research. Karl Brauer, of Kelley Blue Book, recommends looking for recently closed auctions on eBay Motors to gauge the actual market. You can also search classified ads on sites such as AutoTrader.com and Cars.com.
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Dealer or private party? If you don’t want the hassle of selling the vehicle yourself, at least shop it around to several dealers and to CarMax. Dealers usually can’t beat offers from CarMax, but even there you may get $500 to $1,500 less than in a private sale, says Philip Reed, of Edmunds.com. Ask for offers, as well as how long they’ll be good for, in writing.
A private sale may net you more, but you’ll have to work for it. You can post a free ad on Cars.com, but it’s worth it to pay for a longer run time and more photos. You’ll pay $20 to $125 on AutoTrader, Cars.com and eBay Motors, depending on how long the ad runs and the number of photos. You might get a better response if your ad tells a story about how the car has been good to you and why you’re selling. Take photos inside and out, both wide-angle and detail shots, and be sure to show any damage. Run a vehicle history report on AutoCheck.com or Carfax.com ($30 to $40), and post it with your ad. It’s okay to pad your price a little to anticipate haggling.
If you don’t want to put in the time to create and manage your listing, try one of AutoTrader’s VIP packages ($159 to $289, depending on the services provided). They include everything from taking pictures and creating your ad to providing expert pricing advice and even screening calls to be sure prospective buyers are serious.
To prepare the car for sale, it’s usually worth it to fix dents and dings. Detailing costs about $100, but a good wash and clean windows are often enough. Weigh the cost of larger repairs against the likely return when you sell your car. If your low-value vehicle needs a big-ticket fix, disclose the cost of the repair and that you’ve dropped your price to match.
Meet prospective buyers in a public place. Never meet at your home, and never let the car out of your sight until you have the money in hand. Go along on the test drives. If a buyer wants to take it to a mechanic, go along, or offer to make the car available for a third-party inspection, such as one from AiM Mobile Inspections.
Gather your service and emissions inspection records and the title, and bring the paperwork to transfer ownership with you to the test drives (you can download forms from the DMV). A bill of sale isn’t required in all states, but filling one out is proof of your transaction and that the car is being sold in “as is” condition. Cash is king, but a money order or cashier’s check works, too.
Ask Jessica a question at janderson@kiplinger.com.
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