Pros, cons of online, private party and more
How to increase your car’s resale value
Get the best resale value for your car with these tips.
Problem Solved
If you need to get rid of a used vehicle, you have several options — each of which carries its own list of pros and cons.
Ultimately, experts said, how you decide to unload your used car comes down to how much money you want to make versus how much effort you want to expend. If you choose to trade it in at the car dealership, that’s the easiest way to get rid of it, but it might not yield the most money.
Another choice is to sell it privately, which obviously requires more effort. Or you can sell it to a used vehicle site such as CarMax. You could even donate it to a charity.
“I don’t know if there’s one best way. It depends on your personality. Maybe you don’t want to deal with people coming to your house or going down the street to meet them, and negotiating makes some people uncomfortable,” said David Undercoffler, head of consumer insights at car-shopping website CarGurus. “If you have the time to post it online and deal with a lot of tire kickers, great. You might get more money that way than from a dealership.”
Step one: Know your value
The first step in selling your car is to make sure you know what the vehicle is worth so that, no matter how you choose to sell it, you sell it for the right value, Undercoffler said.
Many tools online can help with this, such as Kelley Blue Book’s trade-in and private-party values, which even offers the option to get a cash offer for your car on its website. Edmunds.com offers a used car value tool, Carvana has a value tracker, CarMax offers an appraisal tool and CarGurus’ Instant Market Value tool online, to list a few. Most offer a trade-in value and a private party value.
Undercoffler recommends a seller “triangulate it” and use a few sites to get the most accurate price in your mind.
“A lot of them will give you different values depending on if you’re trading it in, selling it yourself … but you have these sites backing you up,” Undercoffler said. “It gives sellers a lot of confidence.”
Edmunds.com’s Ivan Drury agrees, and suggested another step. He said even if you plan to sell the vehicle to a private party, take it to a few car dealers to see what they’d offer on top of running it through the online appraisal tools.
“At least that way you know the bottom dollar you can expect,” said Drury, director of insights at Edmunds.com. “Perhaps it will line up with or be more than what some are looking to spend in the private market.”
The key steps to sell your car to a private party
Both agree if you really want to maximize your money, sell it privately, so let’s look at that process first.
“Dealers are in the business to make money, so they need to know they can buy it and turn it around and sell it for a profit,” Undercoffler said. “But there is no free lunch. If you sell it yourself, it’s going to take time and effort.”
Undercoffler first recommends, before advertising that your car is for sale to a private party, which can be done on such websites as www.iseecars.com, spend $100 or so to get the car detailed inside and out. If you sell it to a dealer, they can clean it up and fix any dings and dents, so don’t spend the money on that because you won’t recoup that cost, he said.
Drury said it is also critical to make sure your paperwork is in order. Have as many records for maintenance and repairs as possible. Also be sure that your registration, release of liability, title (or the lien payoff amount), Department of Motor Vehicle forms, and any other forms are up-to-date because, “getting pulled over during a test drive is not when you want to explain away the situation about your tags.”
It is also important to make sure the potential buyer has paperwork in order and is legitimate.
“You want to know who you’re dealing with, make sure the person showing up for the test drive is the same person you’ve been in contact with, check their ID and, while you aren’t going to be running a background check on them, at least look at the expiration date,” Drury said.
The test drive and payment
Undercoffler said not to let someone take your car for a test drive without you in it and to make sure they have insurance, because if there’s an accident, you want to make sure the potential buyer is covered.
Let someone you trust know the specifics of when, where and who you are meeting, especially if meeting somebody somewhere other than at your house, Drury added.
If the buyer demands a prepurchase inspection, it is up to you whether you want to accommodate that request. Undercoffler said he’s bought and sold many classic cars, and a prepurchase inspection is common.
“You work out that, you drive it to the garage where the potential buyer pays for the inspection,” Undercoffler said. “But you have to be OK with it if they do turn up an issue. Do you want to spend another $500 to get it fixed? What’s the end game for you?”
Let’s say you found your buyer and they are good with the vehicle, and now it’s time to pay. This is when cash is always king.
“Be smart about it and where you’re doing a transaction, have someone with you,” Undercoffler said. “But cash or a cashier check are good. Anyone offering anything electronic I’d be leery of.”
Drury said that if you’re accepting cash, buy one of those counterfeit detection markers or “better yet, go straight to the bank together and get the teller involved. Payments by check pose a risk as well; don’t hand over the keys until the check has cleared.”
If you’re not getting any bites, well, Drury said, have a time limit in mind, because you don’t want the vehicle to keep depreciating in value in hopes that you’ll get more for selling it to a private party.
Reasons to not sell your car to a private party
Drury said that if you have any of the following traits, you probably should not sell your car privately. You’re better off taking that vehicle to a dealership, CarMax or sending it to an online retailer.
- Trust issues: Either you’re too trusting or don’t trust anyone. Drury said private party sales require a balance of trust and skepticism.
- Time management issues: Selling your car will require an open schedule and it can be difficult to accommodate a buyer’s schedule. Also, “expect to have people flake on you,” Drury said.
- Knowing too much: You might know every detail about your vehicle and place emphasis on a specific feature or fact that the buyer either doesn’t care about or might not see as a selling point.
- Knowing too little: If you don’t have service records or you’re the third owner and can’t answer buyer’s questions, then get a vehicle history report.
- A bad poker face: You will be negotiating. The buyer wants a good deal, you want top dollar, but neither of the extremes is favorable for both parties, so prepare accordingly.
- Patience or the lack thereof: It can be exasperating to obtain paperwork, get the title if you still have a lien on the vehicle, and wait in line at the bank and Department of Motor Vehicles.
- A backseat driver: Drury said, “If you cannot help yourself from giving advice while driving, or perhaps you get motion sickness when someone else drives, you might want to get someone else to sit with the buyer while they test drive it.”
A caution about donation
Perhaps you’ve heard ads on the radio, particularly on nonprofit public stations that rely on listener donations to stay on the air, to donate your used car to them.
Drury said donating makes sense for people who want absolutely no hassle in getting rid of their car and don’t mind missing out on getting any money for it.
“But then again, I’d recommend anyone debating on going this route to certainly speak with an accountant to see what the benefit would come to for each individual, as the declared value, actual value and overall effect on what you owe can vary wildly,” Drury said.
As for where your car would end up, Drury said in some cases the vehicle goes to a local high school or community college auto shop class, some are sold for parts and others in running shape are more likely to be resold into the market.
If you don’t want to do that, you can sell through websites to CarGurus, Carvana and more, but again, you likely won’t get as much money for it as you would selling it privately, the experts said.
Older cars are worth money too
The final option is take it to a car dealership where you can either leave it there and go home with your money or use the money for a trade-in on a newer vehicle.
“Having a trade-in is a great negotiation tool,” Undercoffler said. “And don’t think because your car has a lot of miles and age on it that it’s not of value.”
The high interest rates have put lower-value used cars in high demand, he said.
“It’s the low-cost cars that dealers can’t get enough of,” Undercoffler said. “So don’t underestimate what it could be worth to a dealer or a consumer.”
Contact Jamie L. LaReau: jlareau@freepress.com. Follow her on Twitter @jlareauan. Read more on General Motors and sign up for our autos newsletter. Become a subscriber.