Step 1: Know the Market
Is your car going to be easy to sell? Is it a hot commodity? Or will you have to drop your price and search out additional avenues to sell it?
Here are a few general rules to answer these questions:
Family sedans, while unexciting to many, are in constant demand by people needing basic, inexpensive transportation.
SUVs are very popular right now and often move quickly, even older models.
The sale of convertibles and sports cars is seasonal. Sunny weather brings out the buyers. Fall and winter months will be slow.
Trucks and vans, used for work, are steady sellers and command competitive prices. Don't underestimate their value.
Collector cars will take longer to sell and are often difficult to price. However, these cars can have unexpected value if you find the right buyer.
Your first step is to check on-line classified ads to see how much others are asking for your type of car. Edmunds.com Used Vehicle Locator and other Internet sites allow you to search with specific criteria. For example, select the year and trim level of your car and see how many similar cars are currently on the market. Take note of their condition, mileage, geographic location and selling price so you can list your car at a price that will sell it quickly.
Step 2: Price Your Car Competitively
Once you have surveyed the on-line classified ads, use Edmunds.com True Market Value (TMV®) pricing to determine the fair value of your car. Edmunds.com TMV prices are adjusted for mileage, color, region, options and condition. Once you have followed the prompts and gotten a specific price, you can also generate a "For Sale" sign. An Edmunds.com "For Sale" sign will give your price an air of authority.
There are always some exceptions to the rules of pricing, so you should follow your intuition. And be sure to leave a little wiggle room in your asking price. Ask for slightly more money than you are actually willing to accept. If you want to get $12,000 for the car, you should list the car at $12,500. That way, if you get $12,500 — great! But if you have to go lower, it won't be a terrible loss.
You may have noticed how creative used car dealers get in pricing cars. Their prices usually end in "995," as in $12,995. Are we not supposed to notice that the car basically costs $13,000? There is a lot of psychology in setting prices. A product that doesn't sell well at $20 might jump off the shelf at $19.95.
On the other hand, as a private party seller, you don't want to look like a car dealer. Therefore, you might want to take a simple approach and set your price at a round figure such as $12,750 or $12,500.
Step 3: Give Your Car "Curb Appeal"
When people come to look at your car, they will probably make up their minds to buy it or not within the first few seconds. This is based on their first look at the car. So you want this first look to be positive. You want your car to have "curb appeal."
Before you advertise your car for sale, make sure it looks as clean and attractive as realistically possible. This goes beyond just taking it to the car wash. Here is a to-do list that could help turn your heap into a cream puff:
Make sure it is washed, waxed and detailed.
Make sure your car is both mechanically sound and free from dents, dings and scrapes.
Consider making low-cost repairs yourself rather than selling it "as is."
Shovel out all the junk from the inside of the car. When prospective buyers go for a test-drive, you don't want them to feel like they've walked into your messy bedroom. Let them visualize the car as theirs.
Wipe the brake dust off the wheel covers and clean the tires with a tire gloss product.
Thoroughly clean the windows (inside and out) and all the mirrored surfaces.
Wipe down the dashboard and empty the ashtrays.
Have all your maintenance records ready to show prospective buyers.
If the car needs servicing or even a routine oil change, take care of that before putting it up for sale.
Have your mechanic check out your car and issue a report about its condition. You can use this to motivate a buyer who is on the fence.
Order a Carfax report and show it to the buyer to prove the car's title is clean and the odometer reading is accurate.
Step 4: Where to Advertise Your Car
Now that your car is looking great and running well, it's time to advertise it for sale. Traditionally, people advertise in newspaper classified ads. These ads can be expensive, but they get results. On-line classified ads, such as the Edmunds.com Used Vehicle Locator, are becoming increasingly popular. On-line ads are particularly effective with hard-to-find or collector cars. In most cases, on-line classifieds reach a geographically wider area of buyers.
Here are the main markets for advertising used cars:
On-line classified ads such as those on Edmunds.com
Daily newspaper classified ads
Weekly "shoppers" and giveaway newspapers
Bulletin boards at your office, a local supermarket or a college campus
Word of mouth — tell your friends and family you have a car for sale
Put a "For Sale" sign in the car window
Creativity is required when it comes to advertising. Think of unusual places to put ads (skywriting is probably too expensive), and you will get results.
One last word of advice about advertising: if you run an expensive classified ad, be sure you are available to take phone calls from possible buyers. Many people won't leave a message for a return call. So answer the phone — and be polite. Creating a good first impression is the first step to getting buyers to come and see the car in person.
Step 5: Create Ads That Sell
When creating "For Sale" signs or putting a classified ad in the paper, you have an opportunity to show how eager you are to sell the car. This can be done by inserting the following abbreviations and phrases:
Must Sell!: This often means the seller is leaving town and needs to dump the car at a fire sale price.
OBO: This stands for "or best offer" and it indicates that you are willing to entertain offers below the stated price. This usually means you are eager to sell the car.
Asking price: This also communicates the feeling that you will negotiate, but it is one notch below OBO on the eagerness scale.
Firm: This word is used to rebuff attempts to negotiate. It indicates that you aren't in a hurry to sell the car — you are most interested in getting your price.
Think about what you are telling people when you phrase your ad. Little words convey a lot. Besides the price, your ad should also include the year, make, model and trim level of the car you are selling along with the mileage, color, condition and popular options.
Step 6: Finalize the Sale
Rules governing the sale of motor vehicles vary somewhat from state to state. Make sure you check with the department of motor vehicles (DMV) in your state, and keep in mind that much of the information is now available on DMV Web sites.
When selling your car, it's important to limit your liability. If someone drives away in the car you just sold, and they get into an accident, can you be held responsible? There are two ways to deal with this concern.
Once you have the money from the sale (it's customary to request either cash or a cashier's check), record the odometer reading and sign the car's title over to the buyer. In some states, the license plates go along with the car. A new title will be issued and mailed to the new owner. Additionally, in most states, a release of liability form can be downloaded from the DMV web site. Fill this out, along with the car's mileage, and mail it in as soon as the car is sold. This establishes the time at which the car left your possession.
But what if you still owe money on the car, and the bank is holding the title? One way to deal with this is to conclude the sale at the bank where the title is held. Call ahead and have the title ready. Then, once money has changed hands and the bank has been paid the balance of the loan, sign the title over to the buyer.
In some cases, however, an out-of-state bank might hold the title. In this instance, it is recommended that you go with the buyer to the DMV and get a temporary operating permit based on a bill of sale. Then, after you pay off the balance of the loan with the proceeds from the car sale, have the title mailed to the new owner. Sign it over to the new owner and the transaction is complete.
Finally, remember to contact your insurance agent to cancel your policy on the vehicle you have sold (or transfer the coverage to your new car).
Before your car drives away for the final time, take a last look through the glove compartment, the trunk and under the seats. You might find some long forgotten treasures you misplaced years ago.
Step 7: After the Sale
In most states, the condition of a used car for sale is considered "as is" and no warranty is provided or implied. Therefore, if the car breaks down after you have sold it, you are under no obligation to refund the buyer's money or pay to have it repaired. If you have sold a car to someone who took it for inspection at a garage and the mechanic found nothing wrong with it, you have done all you can to protect yourself and the buyer.
The best way to feel peace of mind after selling your used car is to make sure you did everything correctly. This means being open about the condition of the car before the sale and timely and complete in transferring DMV paperwork after the sale.
When done correctly, selling a used car can be a win-win situation. You have turned your used car into cash and provided reliable transportation for the next owner. Focus on the benefits to both parties and you are likely to have a smooth and profitable experience.